Coalition demands explanation on flatlining public service pay figures

The forward estimates for public service wage growth is near zero despite a hiring boom and baked-in wage increases.

Opposition public service spokeswoman Jane Hume has issued a ‘please explain’ to Finance Minister Katy Gallagher. Picture: Martin Ollman/NewsWire

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Opposition public service spokeswoman Jane Hume has demanded the Finance Department reveal why its forward estimate for public service wage growth is near zero, despite a hiring boom and baked-in wage increases.

The 2024-25 mid-year economic and fiscal outlook forward estimates show plateauing public service wages despite Public Service Minister Katy Gallagher refusing to back the Coalition’s calls for public service job cuts

Senator Hume questioned the figures as the Coalition prepares ­to make controlling the commonwealth workforce boom a key plank of its election agenda.

“It is unclear to me how the MYEFO’s assumptions of flat public sector wages growth can be reconciled with the decision taken by the government to increase the wages of the majority of the APS by more than 11 per cent over three years, and the clear public statements of the Minister for Finance that she will not reduce the number of public servants,” the letter to the department secretary read.

“As such, I am seeking further detail, including any relevant assumptions and formulae, relating to the projections in the 2024-25 MYEFO that estimate almost zero growth in public sector wages and salaries expenses.

“I further seek your assurance that the increase to public sector wages and the number of public servants will be accurately reflected in the pre-election economic and fiscal outlook report for which you and the secretary of the Treasury are responsible.”

Political fury was sparked last month when the MYEFO documents showed flatlining public service wages and salaries despite baked-in wage growth. At the time, Senator Gallagher said pay wage increases were factored into departmental budgets.

“We haven’t done anything differently in the MYEFO that previous governments haven’t done,” she told the ABC at the time.

“This is a matter that departments manage. They live within their budgets. Their budgets are indexed. And they have staffing costs as part of those.

“In those departmental expenses, there’d be a range of different factors in that. Not all staffing costs – not all programs – are ongoing, for example. And so, some of those costs will change over time. But in terms of EBA, we didn’t supplement the first pay increase over and above the indexation that departments get. And we think that indexation meets those staffing costs.”

Senator Hume told The Australian the budget figures “simply don’t add up”.

“This is a matter of credibility for the Labor government,” she said. “Labor must admit that they are propping up the bottom line by not factoring costs that they agreed to. There is never a good reason for putting forward dodgy numbers. What is the Labor government trying to hide?”

The Australian approached Senator Gallagher for comment.