APS wage growth slows, but bonuses unchanged for senior executives

New figures show the public service paid its most senior staff a similar number of bonuses in 2020 compared to the previous year, despite being told to exercise restraint.

The public service released the figures in a new report also showing that fewer bureaucrats are bargaining with their employers for pay rises under Coalition workplace rules for the bureaucracy.

Salaries for rank-and-file public servants increased 0.8 per cent in 2020 as a federal government pause on pay rises clamped down on wage growth, the Australian Public Service annual remuneration report said.

Senior executive salaries shrank 0.1 per cent, after the government asked agencies to suspend pay increases for the top-ranking public servants during the Covid economic downturn.

However agencies awarded 114 of their senior executives bonuses in 2020, a similar number compared to 2019, despite being advised to exercise restraint.

It coincides with a review of bonuses for senior executives in the public service, which recommended restraint in an interim report released in March.

The main public sector union blasted the government's freeze on public service wages, which lifted in April, saying it had forced real wages backwards for staff while they delivered services during Covid and natural disasters.

But the public service commission, which oversees the bureaucracy's workforce, said the decision to pause wage rises had been made at the onset of the COVID-19 pandemic due to the exceptional economic circumstances faced by Australians.

Community and Public Sector Union national secretary Melissa Donnelly said the government had effectively cut public sector wages at a time it should be helping workers spend in their local communities.

"The long-term implications of this decision will be felt for years to come," she said.

The number of bonuses paid to senior executive service staff exposed the government's wage freeze for rank-and-file staff as a political ploy, Ms Donnelly said.

"This outcome just goes to show the wage freeze and index cap was only ever a quick and dirty political play to appease the Coalition's base, and not a thoughtful or considered change to the bargaining policy," she said.

A public service commission spokesperson said many of the deferred non-SES wage increases would be paid during this year.

"The work of APS employees is highly valued by the government and the community. The commissioner continues to acknowledge the hard work and adaptability of APS employees in supporting Australians through the COVID-19 pandemic."

About 4 per cent of SES staff received a performance bonus in 2020 consistent with their contractual arrangements, the spokesperson said.

The latest APS remuneration report shows fewer public servants are bargaining with their employers for pay increases.

Workplace determinations - rather than enterprise bargaining agreements - have set the pay of nearly two-thirds of Australian Public Service staff.

Nearly 60 federal agencies including three major Commonwealth employers Services Australia, the Department of Defence and the Australian Taxation Office, used the determinations to give wage increases while retaining conditions in their expired enterprise agreements.

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Machinery of government changes reducing the number of departments from 18 to 14 in 2020 drove an increase in public servants covered by workplace determinations rather than enterprise agreements.

Ms Donnelly blamed the federal government's restrictive workplace bargaining rules, saying the Coalition's approach was "fundamentally broken" and it didn't offer a genuine process for bargaining.

"It is ideological, it's not productive, it's not working, and it's contributing to staff dissatisfaction and the hollowing out of service delivery and capacity for the community," she said.

"As a result of the bargaining policy, the public sector has also given up its role leading employment conditions and providing innovative arrangements.

"Rather than being a model employer and driving broader economic growth by improving public sector workers' wages, this government has chosen to lock APS employees into a race to the bottom on wages with the private sector."

Ms Donnelly said public service bargaining had the potential to deliver benefits for employees, agencies, and the APS.

"But in some cases agencies and employees will decide to opt for a determination instead to avoid having to go through a bargaining process that doesn't let employees and agencies negotiate freely," she said.

Under the government's workplace bargaining rules for public servants, pay rises cannot exceed the private sector wage price index.

The public service commission spokesperson said the policy supported agencies to reach workplace arrangements that best suited their needs.

"Any decision to implement a determination must first have been supported by employees," the spokesperson said.

The Coalition government last year imposed a six month-deferral on public service wage rises due in the 12 months from April 2020, saying bureaucrats must share the economic burden of COVID-19.

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