The NSW government will lift its public sector wages cap for the first time since its introduction in 2011 – but the move is unlikely to stop further industrial action, with unions warning the new policy will deliver a cut to real wages.
The 2.5 per cent cap on public sector workers’ pay will lift to 3 per cent this year, increasing to a possible 3.5 per cent next year contingent on productivity gains.
The NSW government will increase its wages cap to 3 per cent.Credit:Oscar Colman
As well as increasing the cap, the state government has promised a one-off $3000 payment to permanent NSW Health workers as a thank-you for their work during the pandemic.
However, unions representing other frontline workers have criticised this, saying while they do not begrudge health workers being rewarded, it’s wrong to pit workers against each other.
The new wages policy, to be included in this month’s state budget, will cost $1.3 billion over four years, while the thank-you payment will cost $435 million.
Premier Dominic Perrottet on Monday said the change would acknowledge frontline workers in a “fair and responsible” way as the cost of living continued to rise.
“I appreciate and understand the union bosses will have a view and they need to stand up for their members, I appreciate that. But I need to stand up for the 8 million people across our state,” he said.
Employee Relations Minister Damien Tudehope said a wage increase in line with inflation – a key demand of the unions – would cost the state about $5 billion over four years.
A statewide 24-hour strike of 30,000 workers on Wednesday would continue unless the government revised its pay offer, Public Service Association general secretary Stewart Little said.
“This offer is pure politics – moving half a per cent and playing silly games with one-off bonuses for certain workers. It’s a shameless attempt at dividing workers against each other,” Little said.
“Inflation is running at over 5 per cent. If frontline workers take 3 per cent – the best they could hope for under Mr Perrottet’s offer – they would still be going backward by thousands of dollars a year.”
Little said health workers deserved a pay rise but so did prison officers, child protection staff and State Emergency Service and Rural Fire Service employees.
NSW Teachers Federation President Angelo Gavrielatos said the reform added “insult to injury”.
“The government is seeking to impose a real wage cut upon teachers, and what has been announced will do nothing to address the teacher shortage that is impacting teachers and students,” he said.
He said teachers did not begrudge health workers the $3000 thank you payment, but said the gesture had “not been missed by any teacher”.
Secretary of Unions NSW Mark Morey said Monday’s announcement was a “short-term fix to a long-term economic crisis”, which would stall momentum for wage growth in the private sector.
“Dominic Perrottet is the first premier in living memory to consciously and deliberately shrink the pay of public sector workers. When you bake in a pay cut like this it’s not just for one year,” he said.
NSW Labor leader Chris Minns described the wage cap increase as “better than nothing” but said workers deserved better. He has promised to lift the cap if elected in March 2023.
“We still believe that the current system of bargaining between public sector workers and the NSW government is fundamentally broken,” he said.
Modelling by industrial relations economist Emeritus Professor David Peetz showed the shift in the wage cap from 2.5 to 3 per cent for 2022-23 is worth about $380 per year for a fourth-year registered nurse or midwife.
For a median public sector employee it amounts to about $450, Peetz’s analysis shows.
“The higher 3 per cent cap would mean that, instead of the nurse losing about $1375 in 2022-23, they’d only lose $995. For the median public sector employee, it looks like the loss drops from about $1627 to $1175,” Peetz said.
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