Remuneration – Government’s wages policy explained
Last updated: 30 Nov 2016
This page is: current
What is the maximum remuneration increase available under the Bargaining Policy?
The Bargaining Policy allows for remuneration increases to be negotiated up to an average of 2% per annum. Two percent represents a fair pay offer which is competitive with economic indicators such as CPI and state and territory public sector wages policies.
Remuneration includes all salary related payments made to employees. Examples include: base salary, salary-related allowances such as first aid allowance, and casual loading.
Remuneration increases can be averaged across the life of the workplace agreement and/or the workforce. For example, if the increase was averaged across the life of the agreement, pay increases could be:
- 2.5% on commencement of the agreement;
- 2.0% 12 months from commencement; and
- 1.5% 24 months from commencement.
In the case where the increase is averaged across the workforce, an agency may potentially offer higher pay increases to one group of staff but less to another. For example, this may occur following a machinery of government change where there is pay parity variations across classifications.
Are agencies given additional funding to cover remuneration increases?
Agencies are not given additional funding to cover remuneration increases. Agencies can only offer remuneration increases which are affordable and funded from within their existing budget.
How much can remuneration increases be front-loaded?
The Bargaining Policy requires there be a reasonable spread of increases over the life of a workplace agreement. Under these policy parameters, the maximum frontloading available in the first 13 months of an agreement includes:
- 3.0% on commencement and 2.0% 12 months from commencement; or
- 2.5% on commencement and 2.5% 12 months from commencement.
Spreading out wage increases over time assists in affordability and ensures employees have pay increases to look forward to.
Is back-pay available?
The Bargaining Policy requires remuneration increases to apply prospectively, meaning back-pay is not available. This is a long-standing principle adopted by successive governments.
This policy recognises productivity improvements can be achieved by new workplace agreements that do not restrict an agency's ability to operate efficiently. This means that as the productivity gains are prospective, so too are pay increases.