Reserve Bank of Australia employees will receive average pay rises of just 2 per cent a year over the next three years - below the current rate of inflation and Treasury forecasts of inflation - despite the Reserve Bank governor encouraging workers to rise up and demand higher pay.
Workers who are meeting all the expectations of their role could still see their pay go backwards in real terms under the new RBA workplace agreement.
The three-year deal, which entered force today, provides for "a salary increase distributed from a pool of 2 per cent ... based on their individual performance".
RBA staff who "meet expectations" in their job will only receive annual pay rises of between 1-2 per cent, meaning they could suffer considerable real wage cuts after inflation.
High performers can get annual pay rises of between 2-5 per cent and there is also capacity to give lump sum payments to workers who exceed expectations under the performance management process.
RBA defies its own call for higher wage growth
Implementation of the RBA Workplace Agreement comes just a fortnight after the central bank boss Phil Lowe declared that Australia was beset by a "crisis" of low pay and encouraged workers to demand higher pay rises.
It appears that the need to adhere to Federal Government's Australian Public Sector bargaining framework constrained the ability of the RBA to grant higher pay rises, despite the views of its boss.
The APS bargaining framework caps pay rises at 2 per cent per annum, and then only in return for "productivity improvements" achieved by removing clauses from enterprise agreements.
The irony of RBA staff getting sub-inflation pay rises despite the central bank's concerns about a crisis of low pay highlights concerns voiced by labour market experts about how policy and legislation are undermining workers' scope to achieve pay gains.
"You've got government doing everything it can to prevent its own workers from getting a decent pay rise in the name of fiscal rectitude," Professor Andrew Stewart of Adelaide University, one of the nation's foremost employment law academics, told the ABC.
"We've seen competitive tendering of services which focus on costs rather than quality or local jobs.
"It's not only direct government employment - large numbers of workers in the community sector and other areas effectively rely on the Federal Government to fund their pay rises and its policies are limiting the ability of workers to achieve decent pay outcomes."
Many thousands of federal public servants have been denied wage increases for several years under the policy because they have been unwilling to accept the loss of conditions or enforceable rights that public sector agencies have demanded in return for relatively low pay rises.
A large majority of eligible staff voted in favour of the RBA's new pay deal.
