NSW lifts growth freeze on public sector salaries

By Melissa Coade

Monday June 21, 2021

The resignations of Berejiklian and Constance highlight a passing of the baton to the next generation of NSW.
The resignations of Berejiklian and Constance highlight a passing of the baton to the next generation of NSW. (AAP Image/Dan Himbrechts)

NSW Premier Gladys Berejiklian and treasurer Dominic Perrottet have announced that the state government will be lifting the freeze on public sector wages from July 1.

Public sector employees, including paramedics and police, will receive a wage increase of up to 2.5% from the start of the 2021-22 financial year after the government froze salary growth in May 2020. The government said last year that freezing the public sector pay increase for 12 months would help to ‘protect public service jobs’ amid rising unemployment.

Addressing the media on Monday, Perrottet said that the government was in a position to bring back salary growth since the NSW economy had rebounded – even though the impact of COVID-19 was still being felt in the wider economy. With a CPI at 1.7 he said now was a good time to reward the public sector. 

“Last year’s reduction in pay rises was a tough decision,” the treasurer said. 

“But everyone remembers the very confronting scenes from last year of people lined up outside Centrelink, by making that decision we were able to protect and boost jobs when needed to.”

The decision to reinstate the public sector wage policy is expected to cost the government approximately $2.7 billion over the next four years.

“This is by far the most significant investment in this year’s budget as a one off announcement,” Perrottet added.

Ms Berejiklian noted that the pay increase was ‘significantly above current private sector wage growth’ for a sector that employed the highest number of workers in the state. The NSW government employs approximately 400,000 workers.

“We put all of our financial strength into protecting people, providing economic stimulus and boosting job-creating programs. The economy is back growing and we are now able to give a wage increase to government workers and their families,” the premier said.

“I would like to thank all of our public servants for the work they have done in protecting the people of NSW over the past 18 months.”

The policy to annually increase public sector salaries by up to 2.5% was introduced by the government in 2011. The treasurer confirmed that while that figure would remain government policy, if there were productivity savings in certain areas of the public service those areas may be eligible for pay rises above 2.5%.

In October last year, and after the state government’s call to freeze public sector wage growth, the NSW Industrial Relations Commission awarded NSW public servants a 0.3% wage increase from the first full pay period after 1 July 2020.

Compared with pay increase settings across the country, Perrottet also noted that NSW and Queensland were the only two states that had set an annual increase up to 2.5%.

On the state’s economy gaining strength, the treasurer cited 270,000 jobs that had been lost during the pandemic as having been regained. The NSW unemployment rate now sits at 5%, slightly better than the national unemployment rate of 5.1%.

“We know there is still a lot more to do and we will continue to support people and businesses with a strong focus on productivity growth and reform,” Perrottet said.

“We weathered the storm and after a pandemic induced pause we can return to a fiscally responsible policy.”

Meanwhile in Western Australia, the local branch of the Community and Public Sector Union (CPSU) have issued a statement saying the measures of the NSW government make the WA government’s $1000 wages policy ‘one of the lowest in the country’. WA branch secretary Rikki Hendon said Monday’s announcement from NSW sent an important message to premier Mark McGowan.

“McGowan’s Wages Policy is not only eroding the fundamentals of Union bargaining, it is unjustifiable and unsustainable in a state that is set for a multibillion-dollar surplus,” Hendon said.

“We hope Mr McGowan follows suit of Premier Berejiklian and finally recognises the worth of his workers and the important services they provide for the WA community,” she added.


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