Public Service Minister Eric Abetz has warned pay talks for the service will be tough, with the government having ''minimal'' capacity to fund pay rises.
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He told the Senate on Thursday that the Coalition would not borrow money overseas to fund higher wages for 160,000 federal bureaucrats and took aim at their main union, the CPSU, for its ''unsustainable and out-of-touch'' wage claim.
The government will unveil its bargaining policy on Friday, allowing talks to begin between 117 departments and agencies and 160,000 of their employees.
On Wednesday the CPSU circulated petitions in several departments aimed at forcing the government to the negotiating table, with the union saying it had lost patience after months of delays.
But Senator Abetz hit back on Thursday, telling Senate question time there was little money for pay rises for federal public servants and that the situation was Labor's fault.
''As a result of the $123 billion worth of prospective Labor deficits and $667 billion worth of gross Labor debt, there will be minimal capacity for wage increases,'' Senator Abetz told the chamber. "Public service wages need to be affordable and sustainable and within community expectations.''He said he had met the union's ruling council late last year and asked them not to pursue ''unsustainable'' wage rises.
''The very day that the devastating state of the nation's finances left by Labor were revealed, the very next day, the CPSU advised they were lodging a 12 per cent claim, clearly unsustainable, out of touch with community expectations.''
Foreshadowing a tough round of negotiations, he said the government was determined not to put wage rises for public servants on ''the national credit card''.
''We simply cannot keep on borrowing from overseas to pay for public sector wage rises without any appreciable productivity offsets,'' Senator Abetz said.
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He went on to blame the previous government for the redundancy turmoil gripping the public service and shattering morale in the bureaucracy.
''The Coalition recognises that public servants have families, they have mortgages they have bills,'' he said. ''The government is already having to manage a reduction of 14,500 public service jobs as a result of the former Labor government's largely secret cuts, and each one of those 14,500 is a human being, probably a family breadwinner.
''Labor's administrative and financial mismanagement shattered the APS morale and imposed ever-increasing efficiency dividends now resulting in minimal capacity for wage increases.''
