The government of Western Australia has unveiled a new wage policy that will see the income of more than 150,000 public sector employees increasing in the next two years. 

The pay increase follows the state's reportedly stronger-than-expected economic and financial rebound from the COVID-19 crisis.

"Our public sector workers, including nurses, teachers, police and public servants have worked hard to make Western Australia the safest place to live – with one of the strongest economies in the world – throughout the COVID-19 pandemic," said WA Premier Mark McGowan.

"Our strong financial and economic performance throughout COVID-19 means that we are now in a position to deliver a new wages policy, which is sustainable and deliverable, and rewards the efforts of our public sector workers."

The wage hike – set above the consumer price index – gives public sector staff a yearly increase of 2.5% as well as the option (by industrial agreement) to receive either a one-time $1,000 payout or another 0.25% increase per year for negotiated reforms.

Following the one-time payment, an employee earning less than $65,000 per year could see a 4%+ pay raise in the first year of an agreement. This new policy supercedes the earlier payout given under the previous Liberal National Government, where more than 95% of public sector workers had been placed in the past four years or longer.