Whether they are overpaid, and whether their salaries should now be restrained, is a harder question to answer.

But, first, we need to clarify some confusion in this debate, which has played out in The Canberra Times over the past month or so. Back in December, Abetz responded to union anger that public servants were expected to accept below-inflation pay rises (i.e. real pay cuts) to help address the nation's "dire fiscal challenge". The minister told Parliament that the Community and Public Sector Union should "remind its members that, over the last decade, median public service pay rises outstripped CPI by 14 per cent".

For whatever reason, Abetz underplayed wage growth in the Australian Public Service. He added annual salary rises together, but did not compound them. What's that mean in plain-speak? Well, it's an unusual method to describe an increase over time because it doesn't actually reflect the full extent of the increase.

So, when the minister wrote last month that "APS median wage rises have totalled 42 per cent over the last decade, compared to CPI increases of 28 per cent", he was, in a way, correct. But if we're measuring how the median wage in December 2013 (the latest data available) differed from 10 years earlier, it actually rose by 50.7 per cent (not 42), and prices rose by 31.8 per cent (not 28). In other words, public service pay growth outstripped inflation by almost 19 percentage points, not 14 points as Abetz suggested. In short, counting the numbers a little differently can make a big difference.

Now that the methodology behind Abetz's numbers is apparent, we can accurately compare federal bureaucrats' pay growth against other industries (see the graph above). It was wrong to say, as a Canberra Times column did in December, that APS wage growth of 42 per cent (to use Abetz's methodology) was "about the same" as the 42.3 per cent wage growth across the private sector (to use the Bureau of Statistics' methodology). When we compare like with like, it's clear APS staff have been in a good pay paddock. Perhaps not quite so green a field as miners, builders or utility workers, but pretty lush nonetheless.

How relevant is all this to the wage negotiations now under way across the 160,000-strong bureaucracy? It shouldn't affect the bargaining at all. Unfortunately, it appears it will.

In a recent radio interview, Abetz highlighted public servants' rapid pay rises over the past decade, saying that "when times are good, of course, the good times should be shared, including with the public service". He added: "I think we can all be agreed times are now tougher ... and that is why we're calling for wage restraint."

Let's be clear: public servants' salaries are not the cause of the deficit. The difference between the entire bureaucracy receiving an annual pay increase (including superannuation) of, say, 1.5 per cent versus 3 per cent would be about $270 million a year. To put that in perspective, the larger of the two increases (3 per cent) would cost taxpayers an extra $1 for every $1600 or so the government spends. Wage restraint will not cure the government's budget blues. Any resulting savings would be dwarfed by the regular ebbs and flows of tax revenue, which are measured in tens of billions of dollars.

Nor, despite what Abetz said, should the "good times" be shared with public servants for the sake of it. That's the sort of profligacy that caused the rapid wage growth of the past decade, and which allowed unjustified classification creep and poor personnel practices to flourish in government agencies.

Only one factor should determine wages for public servants: the value of their work. As former public service commissioner Professor Andrew Podger wrote in the December Informant: "Fundamentally, it is the labour market, not budget restraint, that should determine the price of the skills required. Of course, the price must be affordable – but that is primarily a function of the activities governments want to perform being affordable."

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So to the harder question: are public servants worth a pay rise? It depends whom you ask.

For several years, government-commissioned analyses suggested most APS staff were paid relatively poorly. Yet Canberra businesses argue the opposite, saying the bureaucracy's wages dramatically inflate the price of labour in the ACT.

The last independent remuneration analysis, carried out for the Public Service Commission by consulting firm Mercer, was published 3½ years ago. Its findings reflected its previous work. Most APS staff were paid better than their state, territory and local government counterparts. However, Mercer also found that those employed at APS level 3 and higher tended to be underpaid compared to private sector workers with similar qualifications and experience.

Try telling that to an ACT business owner.

Former Canberra Business Chamber chief executive Chris Faulks says "almost all of the private sector" in the ACT complains that the bureaucracy pays relatively unskilled staff far higher wages than elsewhere in Australia. "I hear on a regular basis that, if [government agencies] shifted their operations to places like south-east Queensland, they would pay, on average, about $10,000 less a year per employee."

She cites a recent experience at the chamber, where she had employed a receptionist. "She was straight out of school, with no extra qualifications and average year 12 marks. And I was paying her well above the award rate. She got a job in the public service that paid $20,000 a year more than I was paying."

Faulks says the APS skews Canberra's labour market for skilled staff, too – such as managers and specialists – through its generous conditions, particularly maternity leave. "Businesses here, especially smaller businesses, just can't compete with the public service to attract women of child-bearing age, where those conditions are much better."

However, she acknowledges the problem eased in recent years when government recruitment slowed. Nor is it "all bad news". "The flipside of this is that, although wage expectations are high, Canberra has a very highly skilled and well-educated workforce. You don't get that in other parts of Australia."

Kathy Kostyrko, the public sector director at recruitment firm Hays, agrees Canberra's labour market has been somewhat lop-sided in past years, paying low and mid-level staff more than they would likely receive outside the ACT. She says salary growth in the business sector collapsed after the global financial crisis. The broader labour market, she argues, has now placed public servants in a weak bargaining position.

"In general, across the private sector, wages were completely stagnant last year. Most organisations are looking to minimise their spending; they're trying shorter working weeks and other ways to save money. Businesses are simply not paying CPI wage increases at the moment. Some people have had no pay rises at all for years. You then compare that to the federal government, where all staff are on enterprise agreements and have been receiving annual pay rises."

Kostyrko says there is an argument that the bureaucracy should "restore a level playing field", at least in the ACT, by restraining staff wages until they are in sync with private sector pay. However, she warns this may create as many problems as it solves.

"Many people fear for their job at the moment. The government is cutting staff but it's not cutting programs, so people are working much harder, too," she says. "And now, on top of that, their enterprise agreements are being negotiated and salaries are being cut back in real terms. You're going to have a very unhappy government workforce."

There is a potential solution – though, unfortunately, the government has already rejected it. Last year, the Public Service Commission began the difficult task of trying to restore consistency to APS job classifications (APS6, EL1, etc). These job levels are the basis on which public servants are paid. But over the years they have come to hold vastly different meanings in different workplaces. Nor do workers at the same level receive the same wage; pay gaps between different agencies sometimes reach tens of thousands of dollars a year.

The commission's new work-level standards for each classification became mandatory in December last year. As a result, agency heads must now ensure that every new job complies with these standards.

This begs an obvious question: if the government has gone to such lengths to restore consistency to the meaning of job titles, why not restore consistency to pay, too? Unscrambling the decentralised mess that public service pay has become would take time, but it is possible. And, as Informant columnist Paddy Gourley has noted regularly, it could save hundreds of millions of dollars a year.

A few years ago, parliamentarians agreed to an independent review of their own remuneration. This led to an overhaul of their allowances and a significant increase in their salary – and with good reason. It's well past time for a systematic review of public servants' pay, too; a genuine attempt to determine the value of their labour. The result might please some public servants and displease others. But it would almost certainly provide a better basis for paying them than arbitrary budget decisions and the shifting politics of the day.

Want to contribute to The Public Sector Informant? Send your ideas to psi.editor@canberratimes.com.au.