Victoria's public service workers will be offered pay increases above inflation as counterparts in other states battle for a boost equal to the climbing cost of living.
Earlier this year Treasurer Tim Pallas warned of a two per cent pay rise because of a drop in revenue due to the slight downturn in the housing market.
But on Tuesday, alongside shadow treasurer Chris Bowen on the hustings for the federal election, Mr Pallas' tough stance softened.
"We will ensure that public servants get a better-than-CPI increase," he told reporters.
Australia's Consumer Price Index was last recorded in December at 1.8 per cent, with projections it could rise above two per cent in 2019.
He reiterated that the state budget on May 27 will include a revenue drop, with house prices down 10 per cent and a 30 per cent reduction in sales volume.
"We would obviously trim our expectations and hoping our workforce recognises that when we can we do the right thing to ensure that they get a real and increasing wages," he said.
"And when the times and circumstances dictate that we need to wind that back a bit our number one priority will be to ensure that they keep their head above water and that they are not seeing a real erosion in their wages."
In other states public servants have been railing against pay rises on offer.
Teachers walked off the job in Tasmania earlier this month, calling for a three per cent a year pay increase in counter to the Liberal government's offer of seven per cent over three years.
The Northern Territory's budget revealed it would freeze the pay of politicians and public sector executives for three years to save $25 million.
Australian Associated Press
