'An employee's market': Chief Minister Andrew Barr flags pay increases for ACT public servants

Andrew Barr said bargaining rounds across the public sector and in major private sector employers would drive pressure to increase wages.

"That's pretty clear in a very competitive labour market where there are more job vacancies than there are unemployed people. It's an employee's market," Mr Barr said.

"It's not just wages. It's also working conditions and flexibility that will help employers to attract and retain their employees."

Mr Barr said the government would need to offer a competitive package in its upcoming bargaining processes with ACT employees, in which they would seek to include workplace flexibility clauses.

"I've been very clear on the workplace flexibility side where the government stands in that regard, and we will meet our commitment that wage increases will at least match [the consumer price index] over the forward estimates period," he said.

"In recent times, our wage increases have been well in advance of CPI. So as an employer, the ACT government has delivered real wage increases, but it's a package. It's not just about the headline salary increase, it's about working conditions and flexibility."

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Eighteen enterprise bargaining agreements between the ACT government and its employees - which cover bus drivers, administrative staff, doctors and other professions - are due to expire this year.

Administrative staff received a 1.35 per cent pay rise in December, and will receive the same again in June. Public school teachers received a 3 per cent pay rise each year from 2019 to 2021, and will receive a further 1.5 per cent pay rise in July.

The ACT mid-year budget review increased the expected wage price index in the ACT from the forecasts in the October budget.

The index is expected to grow by 2.75 per cent in 2021-22, which is a 1 per cent upward revision compared to the estimates in the 2021-22 budget.

"This upward revision reflects stronger than expected wage growth in the December quarter 2021 and wage pressures due to labour shortages from international border closures and growing demand for skilled workers," the mid-year budget review said.

The index is expected to be 3 per cent a year from 2022-23 onwards on a baseline scenario, but could vary between 2.75 and 3.75 per cent. It was expected to be about 2 per cent a year over the forward estimates in the October budget forecasts.

Federal public servants accepted a wage freeze during the COVID-19 pandemic, while the federal government in November replaced a wage-rise cap with a floating limit tied to private sector pay increases.

Meanwhile, the ACT public service has sought to permanently allow its flexible working arrangements with Mr Barr previously declaring the old era of 9-to-5 office work was over.

Canberra's work-life balance would also be prioritised by the ACT government in an economic development plan released last week.

"It is time to look to the future. A future that will firmly place Canberra as an even more attractive city to live, work, study, do business and invest in. A future where employment, aggregate demand and wellbeing are maximised," Mr Barr's foreword to the economic priorities statement said.

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