Australia’s federal lawmakers and other public office holders will receive a whopping 4% pay boost, the biggest increase in 10 years awarded by the independent remuneration tribunal.
Federal parliament members and other public office holders in Australia are set to receive a notable 4% pay raise, marking the largest increase in a decade as decided by the independent remuneration tribunal.
This decision will elevate the basic salary of a backbench Member of Parliament (MP) from $217,060 to approximately $225,742. This new salary is about two-and-a-third times the average earnings of a full-time worker.
Real wage decrease despite increase
With the additional percentages granted to certain positions, the prime minister’s pay will rise to $586,929, while the opposition leader’s pay will increase to $417,623.
The remuneration tribunal, following Monday’s announcement, acknowledged that the pay raises it has stipulated in the last ten years have been relatively restrained, including a zero increase in 2020 and 2021, and a mere 2.75% rise in July 2022.
Despite these adjustments, when accounting for the peak inflation rate of 7.8% in December and the projected 6% rate for 2023-24, politicians and public office holders are still experiencing a real decrease in their wages, even with the nominal pay hike.
Public office holders will receive the pay increase retroactively from July 1, while MPs will witness the pay increment from September 1.
The remuneration tribunal noted that it has raised public office holders’ pay by 14.75% since 2014, which contrasts with an average total increase of 23% for wages in the public and private sectors.
Explaining its rationale, the tribunal emphasized the need to ensure competitive and equitable remuneration suitable for the responsibilities and experience demanded by these roles, aiming to attract and retain capable individuals.
It recognized that these holders do not accept appointments with the expectation of private sector-level compensation, as they are serving the public interest.
The Australian Bureau of Statistics’ data reveals that the June 2023 annual wage price index increased by 3.1% in the public sector and 3.8% in the private sector.
In June, the Fair Work Commission directed a 5.75% wage increase for minimum wage workers.
