Wage freeze proposed in Tasmania to 'save jobs'

By David Donaldson

July 23, 2014

Moves to put a freeze on public sector wages for 12 months would “save jobs”, claims the Tasmanian Treasurer Peter Gutwein, who is preparing legislation to enact the changes by October.

In a statement, Gutwein said:

“The wage pause, and then moving to 2% increases after that, would save $50 million a year and around 500 jobs.”

Citing budget concerns, in April the Tasmanian government suggested it would need to cut 1500 jobs.

But to implement the wage freeze, the government will need to pass legislation to break the three-year enterprise agreement already signed earlier this year by former premier Lara Giddings. Passing the changes will require the support of members of the Tasmanian upper house, who will face pressure from public sector unions.

Community and Public Sector Union acting general secretary Mat Johnston believes “the government has broken faith with its workforce in the most blatant way possible and is breaching employment contracts struck under the employment laws of the state to deprive workers of the meagre increases they agreed to last year”.

“This approach will demolish morale inside a public service already doing more with less since serious cuts over recent years,” said Johnston. “The wage increases agreed through Awards and Agreements are already below costs and have seen real wage cuts for tens of thousands.”

But the Treasurer insists the changes are necessary. “The concept of a wage pause isn’t new, in fact the exact same measure was proposed by former premier David Bartlett in 2009,” he said, adding that Labor and the Greens had been “unable to keep their promise to reduce the public sector by 1700 FTEs”.

In the past, says Gutwein, wage freezing “has been used successfully by the private sector, ­including Tasmanian-based companies Norske Skog and Pacific Aluminium, to contain costs and retain workforce levels”.

The union also remains concerned that the government is presenting the freeze as inevitable, while refusing to promise not to cut jobs. “There’s no indication this announcement means job cuts won’t go ahead,” said Johnston.

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