Rating agencies warn on public sector pay rises

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Earlier this week, Victoria’s public sector union reached agreement with the Andrews State Government regarding a pay rise for public servants. A 2% pay rise was awarded, along with a mobility clause and 16 weeks’ parental leave for primary and secondary carers, which effectively increased the pay rise to more than 3%:

Treasurer Tim Pallas on Tuesday afternoon said the agreement reached with the Community and Public Sector Union for a new four-year deal for about 51,000 workers in 51 government departments and agencies was in line with his policy of 2 per cent public sector wage rises.

But a new “mobility payment” – ranging from $757 a year for junior public servants to more than $2800 for high earners – pushed the dollar value of the deal well past 3 per cent…

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.