How the first APS pay bargaining offer translates into cash, cost to taxpayers: a few graphs (2024)

The so-called average federal public servant, ostensibly an APS Level 6 woman working in service delivery, would take home just over $6,800 after tax under the Australian Public Service Commission’s initial bargaining offer of a 10.5% pay rise, tables released by the agency reveal, with a headline cumulative increase before deductions of $10,421.

In a stark reminder of just how compressed public service wages have become before hitting the ranks of the hallowed Senior Executive Service (SES), an Executive Level 2 (EL2) salary would top out at $164,436, easily $100,000 less than a similarly senior corporate position in banking, property or transport albeit with far more generous superannuation and personal and family leave entitlements that provide taxpayer-funded financial stability that other sectors just can’t match.

The APSC on Tuesday released its ready reckoner for its round-one offer, with what the pay bump amounts to across the varying grades.

It looks like this.

Table 1: Impact on median base salaries as of 31 December 2021:

Source: Australian Public Service Commission.

According to the most recent APS State of the Service report, the APS6 grade accounts for 22.6% of the proportion of APSA employees by classification, followed by EL1s on 19.8%, APS4s on 17.3% and APS5s on 14%. Just under three-quarters (73%) of employees sit across those four pay bands, which start at $76,103 and top out at $119,6512. This chart tells that tale.

Obviously, the fatter the pay packet the fatter the rise, but there are also swings and roundabouts when it comes to marginal tax rates, the Medicare levy and how much a working parent needs to spend on childcare. The latter could potentially be partly addressed with measures such as flexible working to negate some costs like after-school care, although obviously, this wouldn’t work for all roles, especially security-designated ones.

Some of the largest APS agencies had their own childcare facilities located near workplaces. How much this has changed post-COVID is a little hard to tell, but what is known is that flexible working, where appropriate, has been offered as the default.

This will also be an interesting equation nationally because it could allow the APS to diversify its geographical base away from Canberra where rent and residential property prices remain elevated and increasing. Fewer cost-of-living pressure on APS employees could potentially translate to less-severe wage pressure if location is a factor, but wages in adjacent sectors would also provide competition, even if job security is lower.

In terms of what the APS pay rises could cost taxpayers, a simple way to derive an aggregate is to use the Australian Bureau of Statistics’ most recent ‘Public sector employees and cash wages and salaries’ figures, the most recent of which is for the 2021-2022 financial year. It puts the commonwealth government’s annual wage book at $24.489 billion, so if you use that as a base, the dollar cost of the APSC offer over what is paid presently is $979.56 million in year one, $857.115 million in year two and $734.67 million in year three.

All up the three-year bill at a cumulative 10.5% comes in at $2.571 billion. To put that in perspective, the cost of a Virginia Class submarine is US$2.8 billion, or A$4.1 billion.

At the other end of the scale, the Community and Public Sector Union’s claim for a 20% APS pay rise over three years (9% + 6% + 5%) works out to be $2.204 billion in year one, $1.469 billion in year two and $1.224 in year three, adding up to just a shave under $4.9 billion over the three years.

It looks like this on a graph.

Find a mark somewhere in between those two, apply the standard APS job security and super boost discount, and you’ll likely land near the figure.

*Note: information technology salaries do not apply.

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APS staff offered 10.5% in first round of pay bargaining