15 August 2022

Inflation wipes out APS staff's 2021 catch-up, double pay rises

| Ian Bushnell
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Government building with Coat of Arms and Australian flag

A new report has listed changes in Australian Public Service salaries. Photo: Michelle Kroll.

Most Commonwealth public servants may have received two pay rises in 2021, but surging inflation this year has wiped out a weighted median 3 per cent base salary gain across the APS.

The latest figures from the Australian Public Service Commission show that SES staff enjoyed a slightly higher weighted median increase in 2021 of 4.2 per cent.

According to the APS Remuneration Report 2021, total reward, which includes bonuses but not allowances, rose 2.7 per cent for non-SES employees and 2.1 per cent for SES staff.

But inflation this year has hit 6 per cent and is expected to reach a peak of nearly 8 per cent by the December quarter, putting more pressure on public sector wages.

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It was the Morrison Government’s decision in 2020 to defer non-SES pay increases for six months due to the pandemic that meant most staff received two rises last year, and up to 61 per cent of non-SES staff receiving total wage increases of between 3.7 per cent and 4 per cent in 2021.

The main public servants union had said the public sector pay system was broken under the Morrison Government and welcomed the new government’s commitment to negotiate in good faith.

In June 2021, due to government curbs on pay, public sector wages had grown at the lowest annual rate since the Australian Bureau of Statistics began measuring the data in 1997.

The report lists the median APS6 salary at $95,783, EL1 at $119,651 and EL2 at $148,315. The SES 1, 2, and 3 medians are $227,039, $275,000 and $376,578.

The highest median increase was 4.3 per cent for the SES 2 classification, followed by 4.2 per cent for both SES 1 and SES 3.

The highest non-SES median increase was 3.6 per cent at the APS 4 classification. In comparison, the lowest was 1.6 per cent at APS 2, which the report said could be explained by a high proportion of newly engaged or promoted employees commencing in the classification at the bottom of a salary scale.

Salary table

APS base salaries by classification 2020 and 2021. Image: APSC.

The pay gender gap continued to shrink, decreasing from 6.6 per cent in 2020 to 6 per cent in 2021, due to a continuing rise in female representation at most senior classifications.

Between 2017 and 2021, pay for all classification levels increased, but the report said the pace of change continued to vary, ranging from 3.3 per cent at APS 2 to 12.1 per cent at SES 2.

The report said that over this period, movement in base salary for SES classifications has remained higher than for non-SES, reflecting the repackaging of allowances into SES Base Salaries over time.

It said that the total remuneration package (base salary plus benefits such as superannuation and parking) and total reward were more reliable long-term comparisons.

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The highest median total reward increase for 2021 was 4 per cent in both the APS 1 and APS 4 classifications, while the SES 1, SES 2 and SES 3 medians increased by 2.2 per cent, 2 per cent and 1.6 per cent, respectively.

The lowest increase was 1 per cent at APS 2.

The median total remuneration package increased across all classifications, with the highest of 4 per cent for the APS 4 classification and the lowest was 1 per cent at the APS 2 classification.

SES total remuneration package increases were consistently lower than SES Base Salary increases, with median total remuneration package for the SES 1 classification increasing by 2.2 per cent and 1.9 per cent for both the SES 2 and SES 3 classifications.

The government’s lifting in June 2021 of the suspension of SES remuneration increases allowed agencies to resume annual wage increases of 1.7 per cent or 1.9 per cent and performance-based salary progression for SES employees.

Changes to reporting dramatically reduced the number of non-SES performance bonuses reported, with 1,100 employees, or 0.8% of employees, paid a performance bonus.

The number of SES performance bonuses reported hardly changed at 115, or 4 per cent of SES employees, compared to 4.2 per cent in 2020.

The report said that more than 100,000 employees, or 71 per cent, had their salary set in a determination made under the Public Service Act 1999 while continuing to receive other terms and conditions through an enterprise agreement or other employment instrument that had passed its nominal expiry date.

Sixty-five agencies provided pay increases through a determination rather than bargaining new enterprise agreements.

The report said a continued trend to repackage motor vehicle-related allowances into SES Base Salaries in some agencies resulted in the proportion of SES employees paid that allowance falling by more than 10 per cent.

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Oh boo hoo. I get that things are more expensive now, but APS are not being underpaid. What should however be looked at is the costs involved for APS staff. Instead of paying them more reduce their daily costs by allowing increased WFH, parking structures within office buildings (instead of lining the pockets of private paid parking), de-centralising offices to reduce travel times/costs, better public transport etc.

Worth noting that the Executives are widening the pay gap between themselves and those actually doing the work. I’m not saying they don’t work hard, but it’s disheartening to see your bosses who are already paid considerably more than you are now getting a larger increase. Would definitely also note that 3% of an SES pay increase is triple a 3% pay increase for an APS4.

It’s also worth pointing out that while APS are getting increases, these are not typically reflected in Contractor rates. Again it feels bad to see APS not only getting 3-4% increases in pay but also leave entitlements, higher super etc.

Someonesmother4:37 pm 18 Aug 22

Not too sure what dept they have based that wage raise on because I certainly don’t make that sort of money and I certainly didn’t get two pay rises in 2021. Please legt me know I’d like to apply if that is what they get. In fact we only managed 1.7% increase in wages which in this day and age has been eaten up by inflation and increased cost of living. I am going backwards at a rate of knots. I think this really misrepresents the average APS.

HiddenDragon7:33 pm 17 Aug 22

Australia now has some of the most expensive public servants in the world, particularly at senior grades.

Difficult to see a compelling reason for this other than that federal and state/territory governments have had a couple of decades of windfall revenues thanks to a mining boom rivaled only by the 19th century gold rushes and the taxes reaped through the explosion in property prices and (until very recently) years of over-spending and under-saving by Australian households.

None of this is sustainable, and with so many other pressures on government budgets (even before the pandemic), the days of inflation-matching, let alone inflation plus, pay outcomes are very likely in the rear view mirror.

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