But others are taking a more cautious approach, saying it's still not enough to help bureaucrats deal with rising bills.

Public Service Minister Katy Gallagher announced on Thursday those expecting a pay rise in the next year will be given a 3 per cent bump in a move that pips private sector wage growth by 0.3 per cent.

The interim arrangement will allow the government additional time as it consults with unions and agencies to establish a public service-wide bargaining agreement in order to make pay and working conditions across the workforce more consistent.

The minister described pay and working conditions across different agencies and departments as "very fragmented" and "uneven" on ABC radio on Thursday, blaming the former Coalition government for creating a "a Hunger Games approach to bargaining".

The former Coalition government made changes in late 2020 tying public sector wage increases to the private sector after years of it being capped at 2 per cent.

Private sector wage growth sits at 2.7 per cent, meaning public sector pay rises would be capped at that figure under the former rules.

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While the announcement was applauded by unions and their members, the main public sector union acknowledged the pay rise remained well below inflation.

Community and Public Sector Union national secretary Melissa Donnelly said she expected to be able to achieve a better deal for public servants with service-wide bargaining.

"For too long, the capability of the APS has been stymied by fragmented pay and conditions and APS workers have been locked out of genuine bargaining," Ms Donnelly said.

"The previous government's pay caps and restrictions on enhancements to working conditions left agencies and their employees little to no room to genuinely negotiate.

"For years, public sector workers have been raising the alarm over the impact of the previous government's outsourcing and budget cuts.

"The CPSU looks forward to service-wide, centralised bargaining to achieve real gains for employees right across the APS and rebuild public services."

But the Australia Services Union's tax branch was concerned its staff were falling even further behind.

While branch secretary Jeff Lapidos said it was good to see the former government's policy gone, he wasn't entirely pleased with the latest announcement.

"Unfortunately, the new interim arrangements create major problems for all tax officers," he said.

"We are to get a 3 per cent pay increase on August 4, 2023 if ASU members and tax officers generally accept these interim arrangements. We deserve far more than this.

"A 3 per cent pay increase next August will mean we continue to fall further behind against the consumer price index. We will fall even further behind because of the Reserve Bank inspired interest rate increases on our home and other loans."

Mr Lapidos said he would demand government increase his members' pay in line with the rate of inflation to stop wages going backwards.

He expected improvements to put in place as soon as possible, hoping for something by early next year.

"Remember, it was the Commonwealth government [that] got all the benefits from our pay going backwards since 2014," Mr Lapidos said.

"The ASU, our members, and tax officers generally will need to take considered steps so the government understands it is in its interests to support tax officers obtaining decent pay increases and improvements in our workplace rights and conditions of employment in a new ATO Enterprise Agreement."