Australia's top-paid public servant will receive a pay rise nearing $18,000 as the salaries of the federal bureaucracy's bosses lift for a third consecutive year.
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The public service's highest-ranking officials are set to pocket a 2 per cent pay increase next fiscal year, growth that will bring Prime Minister's Department secretary Martin Parkinson's salary to about $914,000.
Department bosses will receive pay rises in July, after the Reserve Bank pointed to sluggish wage growth in dropping official interest rates to record lows as it tries injecting stimulus into a slowing economy.
The latest pay rise, announced on Thursday by the tribunal which sets department secretaries' salaries, is broadly in line with the 2 per cent cap on annual wage growth imposed on rank-and-file public servants under the Coalition's workplace bargaining rules.
Treasury secretary Phil Gaetjens' salary will grow to about $892,000, the second-highest in the Australian Public Service, while public service commissioner Peter Woolcott's salary will reach about $720,000 following the pay rise.
Secretaries at the departments of Defence, Foreign Affairs, Home Affairs, Finance, Health, Industry and Services Australia will have salaries reaching about $865,000 if they've hit the highest point in their pay band.
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ANU public policy professor and former public service commissioner Andrew Podger said the tribunal's decision appeared sensible, setting salaries by accounting for the market and according to the appropriate rate.
"That is exactly the way we should be setting salaries, not only the executives but the rest of the public service," he said.
The Remuneration Tribunal noted greater scrutiny of private sector executive remuneration and said while shareholders challenged the bonuses of corporate bosses, the base salaries of executives were still growing modestly.
As new figures showed Australia's economy slowing further, the tribunal also noted indicators predicting wage rises increasing gradually but lagging economic growth.
"Wage growth has increased modestly over the past year, with reliable measures indicating private sector wage growth is now equalling or outpacing the public sector," it said.
Most Commonwealth agencies have reached workplace deals with rank-and-file staff awarding annual wage increases of 2 per cent over three to four years, while pay rises are slightly higher across the broader government sector.