Australia’s federal MPs will pocket a 3.5 per cent pay rise from July 1, increasing Prime Minister Anthony Albanese’s base salary by more than $20,000 to $607,500.

The Independent Remuneration Tribunal (IRT) decision bumps Opposition Leader Peter Dutton’s base pay by $14,617 up to $432,250, while the base level salary for MPs is now $233,650.

WATCH THE VIDEO ABOVE: Top public servants and MPs pocket pay rise.

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Before the increase, Albanese’s base salary was $586,930 per year.

However, the bump is less than the Fair Work Commission’s minimum wage lift of 3.75 per cent, announced earlier this month, and lower than the inflation rate of 3.6 per cent.

The IRT decision also covers Canberra’s top public servants, including Department of Prime Minister and Cabinet secretary Glyn Davis, who is now earning more than $1 million a year.

On Tuesday, journalists Justin Smith and Suzanne Mostyn joined Monique Wright for Hot Topics, to discuss the pay bump — and they were unimpressed.

“I would think (it’s not a good look) — do we get a $1 million value out of that public service? Well, that’s for sharper minds than I to figure out,” Smith said.

“But I tell you what, a couple of weeks ago, I was talking to a woman who lives in her car or on the couches of friends in her late 50s.

“So, she can’t access super and because she has too much super, she’s not entitled to get any housing help. So I imagine if we asked her, I think the answer would be pretty clear.”

Mostyn agreed with Smith’s assessment.

“I agree. Where are the performance reviews that most of us have to follow? I don’t think many people get beyond three out of five stars,” Mostyn said.

“Talk about the pub test. This is the cocktail bar test. I just wonder, like you Justin, how do you determine whether you’re getting value for money?

“The remuneration tribunal does say that they didn’t get an increase in 2021 during COVID, and that it is part of saying we need to recruit the best people, because in the private sector they would all earn a motza.”

The IRT decision noted it was a “modest” increase.

“The tribunal is aware the remuneration increases it has awarded to offices in its jurisdiction over the past decade have been modest,” the Tribunal said in a statement.

“Including the current decision, the cumulative total of remuneration increases awarded by the Tribunal since 2015 amounts to 18.25 per cent.

“In contrast, remuneration increases more generally in the public and private sectors (based on overall March WPI data from 2015 to 2024) have equated to 24.4 per cent.”