Faced with an economic slowdown and worsening budget deficit, the new Western Australian government has taken another dramatic step in its cost-cutting efforts, announcing that all public service bosses, politicians, magistrates, judges and local council chief executives will have their pay frozen for the next four years.
The previous pay increase cap of 1.5% for other public servants will now be $1000 per year. This will be pro rata for part time and casual staff.
The changes will save around $518 million, says the government.
All new and replacement public sector industrial agreements will be subject to the new policy, but the terms of existing enterprise agreements will be honoured.
A tightening of the existing framework for employment reclassifications will also be implemented to stop anyone trying to bypass the new wages policy.
The wage freeze will apply to all positions determined by the Salaries and Allowances Tribunal for the next four years, and will be implemented through legislation. This prevents the embarrassing prospect of politicians being given pay rises while forcing savings on bureaucrats.
“We have inherited the worst set of books in history and difficult decisions need to be made,” said Treasurer Ben Wyatt.
“Salary expenses are at unsustainable levels. Efforts by the previous government to reign it in were too little, too late and that’s why we have had to make this decision.
“The state government is taking a considered approach acknowledging the reality of our economic situation, with inflation and wages growth at unprecedented lows.”
It’s been a busy few weeks for the new WA government. It announced a machinery of government shakeup a fortnight ago to cut through senior executive ranks and reduce the number of departments from 41 to 25. Darren Foster, deputy director general of the Department of Fisheries and former staffer of the premier, was named as the head of the Department of Premier and Cabinet.
The pay freeze will not make it easier to recruit top public servants from other parts of Australia, a problem WA has confronted for a long time, though a slowing economy — a big part of the reason for the state’s budget austerity — may at least ease competition with the local private sector for top talent.