Politicians receive biggest pay rise in 10 years as cost of living pressures hit everyday Aussies

Federal politicians are set to receive the biggest pay rise in 10 years starting July 1, as interest rates and inflation continue to soar for everyday Australians.

The 2.75 per cent pay rise, decided by the Remuneration Tribunal, will see backbenchers receive $217,060 plus allowance.

Prime Minister Anthony Albanese will be taking home $564,364 and opposition leader Peter Dutton $401,561.

In a statement released by the independent Tribunal, the decision to increase federal MP wages included current and predicted economic factors.

“In determining remuneration for the broad spectrum of public offices within its jurisdiction, the Tribunal’s primary focus is to provide competitive and equitable remuneration that is appropriate to the responsibilities and experience required of the roles, and that is sufficient to attract and retain people of calibre,” the statement read.

“Many of these officeholders do not expect or require that monetary compensation for their roles in the public sector be set at private sector levels.

“Rather, officeholders serve for the public good and in setting remuneration, the Tribunal has traditionally set rates below those of the private sector.

“The Tribunal has had regard to a range of economic considerations, historical and projected.

“The Tribunal notes the resilience of the Australian economy and the stronger than expected recovery from the COVID-19 pandemic.”

The Tribunal said it was “mindful of its history of restrained increases”, with the last increase being a 2 per cent rise in 2019, seeing former PM Scott Morrison’s salary hit $549,250.

The increase comes as the cost of living soars for Australians, with the Reserve Bank of Australia (RBA) expected to continue raising interest rates to match inflation.

In an interview with ABC’s 7.30, RBA Governor Philip Lowe predicted inflation to hit 7 per cent by the end of the year.

“I think Australians need to prepare for higher interest rates,” Lowe said.

“We had emergency settings during the pandemic – that was the right thing to do – but the emergency is over and it’s time to remove the emergency settings and move to more normal settings for monetary policy.

“The other consideration was that inflation is high – it’s too high. At the moment it’s 5 per cent, and by the end of the year I expect inflation to get to 7 per cent.

“That’s a very high number and we need to be able to chart a course back to 2 to 3 per cent inflation.”

Tune into @abc730 tonight to watch Governor Philip Lowe’s interview with Leigh Sales https://t.co/0S6MOkNLAY

— RBA (@RBAInfo) June 14, 2022

The move comes as the Albanese government’s promise of raising the minimum wage comes to fruition, with the Fair Work Commission announcing its June 15 decision to increase the minimum wage by 5.2 per cent.