Latest data reveals strong public sector wage growth

Are you considering a public service career? There’s good news, with wages on the rise.

Last week, the Australian Bureau of Statistics released its latest data on wage growth. It revealed the Wage Price Index rose by 0.9 per cent in the March quarter of 2025. Annually, it increased by 3.4 per cent. This is the first time wage growth has risen since the June quarter of 2024.

The data reveals that these wage increases have been driven mainly by public sector wage rises.

In the March quarter, public sector wages increased by 1 per cent. Annually, they increased by 3.6 per cent.

Meanwhile, private sector wages increased by just 0.9 per cent in the last quarter and 3.3 per cent annually.

So what’s behind this trend, and what are the implications?

What is behind the trend?

In the public sector, new state-based enterprise agreements contributed to the trend.

Jobs covered by enterprise agreements made up more than half of all quarterly growth for the first time since 2020.

Those with careers in education and healthcare saw the biggest pay increases in the quarter. Increased pay to aged care workers also contributed to the trend.

What are the implications?

In the March quarter real wage growth (adjusted for inflation) was 1 per cent. According to ANZ, this is the fastest real wages have grown since 2020. This is the sixth consecutive quarter it has been positive. This is expected to support a recovery in household consumption.

Some are concerned that the wage growth will impact the Reserve Bank’s decision to cut interest rates going forward. However, economists say this is unlikely to be the case.

However, experts warn that rising wages could have implications for productivity in Australia. They caution that while wages are rising, hours worked aren’t keeping pace. This has raised concerns about productivity. In addition, some are concerned that wage growth may be being driven by competition for labour rather than improvements in efficiency.

Competition for labour is not all bad. In fact, it is mainly positive for employees. It particularly benefits those who are looking to switch roles or careers. Employers are offering more to attract and retain talent. This makes now a good time for those seeking to enter the labour market.

However, if workers are being paid more but output is not increasing, this could have significant consequences for the workforce in the future.

What does the future hold for public sector wage growth?

In the short term, more wage rises can be expected. The Fair Work Commission recently addressed the undervaluation of gender-based work. This included sectors such as aged care and childcare. Commonwealth Bank Senior Economist Stephen Wu believes these could lead to more wage rises in various awards and enterprise agreements.

However, he warned that this was more a sign of industries ‘playing catch up’ rather than a trigger for ongoing high pay rises.
Economists have warned that wage increases driven by policy changes will, in most cases, be temporary.

Nevertheless, recent wage rises in the public sector make it an attractive career proposition for those looking to switch careers.

If you ever thought about a career in the public service, now could be the time to make a move with endless opportunities available.

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