Federal public servants are not living in the "real world" of Australian workplace relations, according to public service minister Michaelia Cash.
Senator Cash says the idea of a worker getting a pay rise without offering a productivity offset is "frankly unacceptable" in the "real world" where "Australians live".
The comments, in Senate question time on Thursday, indicate the government is digging in, with most of its 150,000 public servants well into the second year of a wages stalemate.
Tens of thousands of public servants at key departments have rejected pay offers containing "productivity offsets", but Senator Cash told the Senate that was not how things were done "out there in voter-land".
Answering a question from ACT Labor Senator Katy Gallagher, the newly minted minister said wage negotiations "in the real world" were conducted differently to the Australian Public Service.
A combative Senator Cash said the government had been upfront about what it wanted in the wage negotiations.
"It has required some wage moderation in this bargaining round," she said
"The government's offer has been on the table: it is a 1.5 per cent pay increase over three years.
"But what we have asked in return for the 1.5 per cent pay rise is productivity gains.
"In the real world, where Australians live, where people open businesses and risk their own money, in the real world, you don't actually get a pay rise if you don't give a productivity gain.
"I think out in voter-land, out when you're having a coffee in a cafe, when you're having a beer at a pub, when you're having a sandwich at a local sandwich shop, the idea that you would get a pay rise and not have to offset that pay rise with a productivity gain, quite frankly, is unacceptable."
In comments posted on her Facebook page, Senator Gallagher expressed her unhappiness with the minister's answer.
"Instead of an answer, I got a lecture about 'wage moderation', a nicer way of saying no pay rise for two years, followed up by a lecture about how 'the real world where real Australians live' works," the former ACT chief minister wrote.
"Funny, I always thought public servants were real Australians who lived in the real world? Are you a 'real Australian'?"
The Community and Public Sector Union reacted on Friday to Senator Cash's comments by challenging the minister to find "real world solutions" to the wages deadlock.
"We understand that minister Michaelia Cash feels the need to defend current government policy, but we hope that she understands the real mess that public sector bargaining is in, and realises that a new approach will be needed to resolve this impasse" union leader Nadine Flood said.
"We're up for talking with Minister Cash about productivity in the real world, because no other Australian company would cut 17,700 jobs, expect the workers left to pick up much of the work, go through massive restructuring and then tell them that doesn't count and they have delivered no productivities.
"We're up for discussing bargaining in the real world of Australian businesses and their workers, because no other major employer is settling agreements with cuts of up to 50 per cent to workers' rights and conditions in return for an 18-month pay freeze and then 1.5 per cent."