Queensland budget: Wage bill hits $35bn with worse to come

Queensland’s unions have pushed the state government’s wage bill beyond $35bn for the first time.

Treasurer Cameron Dick at the budget media lock-up on Tuesday. Picture: Dan Peled

Queensland’s unions have pushed the state government’s wage bill beyond $35bn for the first time, ­securing higher than expected pay rises from an administration that has employed more than 56,000 additional public servants in less than a decade.

There will be further pressure on the budget as enterprise bargaining agreements for state-­employed nurses, police officers, teachers, and doctors expire before the end of the next financial year and unions negotiate fresh deals for their members.

The budget has only factored in public sector wage increases of 2.5 per cent annually from 2026, despite the most recent round of ­negotiations resulting in more generous three-year deals locking in pay rises of 4 per cent for each of the first two years and then 3 per cent for the final year. In the fine print of the budget papers, released on Tuesday, there is a warning that “a one percentage point increase in wage rates above expectation would increase employee expenses by around $352m per annum”.

Employee expenses are by far the biggest cost to the budget, equating to 38.8 per cent, or $35.2bn in 2024-25, not including public servants’ superannuation costs of about $5bn, up from the $32.8bn forecast last year.

The cost is also $1.9bn, or 6 per cent, higher than the estimated ­actual cost for the 2023-24 financial year, blamed in the budget ­papers on “the combination of public sector wages policy and growth of 3 per cent in full-time equivalent employees, largely in frontline service areas of health, education and community safety”.

By the end of this month, the Queensland government will employ 259,004 full-time equivalent public servants, and hire an extra 8000 by the middle of next year, mostly in the police, health and education departments.

Between March 2015 – just two months after Annastacia Palaszczuk was elected premier – and March this year, the Palaszczuk and Miles governments have increased the size of the public service by 56,603 FTEs, of which 50,239 were frontline workers.

It came after the one-term Campbell Newman-led LNP government slashed the size of the public service by 14,000 FTEs ­between 2012 and 2015.

An estimated 90.7 per cent of the entire public service is in frontline and “frontline support” roles, and more than 24,000 FTEs are in “corporate service” jobs.

In the year to March, the Labor government hired an extra 2048 FTEs in non-frontline jobs, and 9655 FTE frontline workers.

The government is determined to hire extra police and health workers, but it is struggling to find Queenslanders who are willing to fill the necessary roles.

New police officers will each receive $40,000 as a recruitment incentive, and there’s a continuing spend of up to $70,000 for each interstate and overseas doctor willing to work in regional and remote Queensland (worth $40m until 2027-28).

The government is also offering $40,000 to “attract and retain” GP trainees in the state.

Asked whether nurses, teachers and police officers would be satisfied with pay increases of 2.5 per cent in line with the government’s lower wage policy from 2026-27, Queensland Treasurer Cameron Dick said the government would negotiate with workers and their unions for a “fair dinkum fair deal”.

“But we will engage with those workers and their representative unions, obviously in good faith for negotiating the best outcome for them, as well as for the taxpayer,” he said. “You cannot say the same thing for (Opposition Leader) David Crisafulli and the LNP: 14,000 jobs axed when he was last in government.”