Australia's top public servant will get a $42,000 wage rise in July as industrial strife looms over pay rises for the Commonwealth's 160,000 rank-and-file bureaucrats.

Ian Watt, Secretary of the Prime Minister and Cabinet department, will be on $844,000 - plus perks - as he and the Commonwealth's 17 other top departmental bosses get pay rises of more than 5 per cent.

Salary will now be on $844,000: Secretary of the PM and Cabinet, Ian Watt. Credit:Andrew Meares

Reprieved Treasury Secretary Martin Parkinson, who was due to be sacked in July, will instead enjoy a pay rise of just under $40,000 taking his salary to $824,000, after the government changed its mind about the sacking.

Unions are predicting conflict this year over the government's hardline bargaining position on the wages of ordinary public servants which will see them offered no pay rises that are not tied to "genuine productivity gains" such as longer working hours.