The state is heading into a fresh round of wage negotiations just as its public service bill hits new highs. Over the 12 months to June 2025 both staff numbers and average pay pushed higher, building on years of expansion in health, education and other essential services. This growth has helped the state cope with a larger and older population and with increasing demand, but it has also made labour the single biggest item in the operating budget at a time when borrowing and infrastructure spending are already elevated.
A recent review of the state’s finances shows total employee expenses across the broader public sector climbed to about $39.2 billion in 2024‑25, roughly $3.2 billion more than the year before. The full time equivalent workforce expanded by around 5% to just over 305,800 roles, while the average cost per worker lifted to about $128,000, an increase of roughly $5000 each. Health services accounted for the largest share of the jump, adding around $1.4 billion in extra wages and staffing to cope with rising hospital demand, while departmental wage costs alone grew by more than 8%. Treasury expects this growth to cool from 2026‑27, with new staffing caps for non‑frontline executives and a target of holding annual employee expense growth closer to 3.5%.
The broader implications look significant. The state’s operating deficit is projected to widen to about $8.5 billion in 2024‑25 from $1.4 billion a year earlier, and credit rating agencies are watching closely to see if wage growth can be contained without undermining service delivery or preparations for the 2032 Olympics. Recent enterprise agreements have already delivered pay rises of around 8% for some frontline groups and 11% over three years for many core public servants, and a major whole of government agreement is due to be renegotiated before mid 2026. If annual employee expenses continue to grow closer to the nationwide trend of 7–8% rather than the 2–3% assumed in some state plans, Queensland looks likely to face tougher budget trade offs between paying its workforce, funding infrastructure and protecting its AA+ credit rating.
