NSW government goes ahead with public service pay freeze

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The NSW government has gone ahead with the public service pay freeze.

The union representing public servants in New South Wales has slammed the state government’s decision to pause public sector pay rises for the first time in nine years.

Premier Gladys Berejiklian and Treasurer Dominic Perrottet on Wednesday said the public service pay freeze increases for the next 12 months would “protect public service jobs” amid rising unemployment across the state.

Over the past nine years, the NSW public sector wage has had an average annual increase of 2.6%. Current pay levels will be retained under the freeze, and the government has guaranteed no forced redundancies for a year for all workers who are not senior executives.

This pause will save around $3 billion. The government says this will allow it to “focus on preserving existing public sector jobs while also stimulating job-creation”.

Berejiklian argued the decision was tough but necessary.

“Whilst we are recovering from the health consequences of the pandemic we have yet to come to terms with the economic shock. Job security is essential on our path to recovery,” she said.

“The only way NSW will come out of this crisis in a strong position is if we all make sacrifices, and that’s what we’re asking our own workforce to do because we are all in this together.”

There were 407,999 NSW public service workers as of June 2019, according to recent Public Service Commission data. The freeze will be applied to all positions across the government, including those within state-owned corporations, departmental secretaries and executives.

The new wages policy will be implemented by regulation and will apply prospectively, the government said. For workers with agreements already struck, the pay rise pause will apply for the first 12 months of their next agreement.

The union representing NSW public service employees has condemned the decision. Public Service Association general secretary Stewart Little called on the government to guarantee no jobs will be lost during this period.

“Today’s decision is extraordinarily disappointing for our members,” he said.

“More than 60% of our members are women, many of them are on medium to low incomes and the sole earners for their families, and many live in regional NSW. This will hurt them.

“They are prison officers, teachers’ aides, park rangers, social workers and the public health heroes who have contained coronavirus. They haven’t stopped working to keep our state safe, and they do deserve a pay rise.”

He argued the most powerful economic stimulus for NSW is its own workforce.

“[The government] must offer certainty to its workforce, and the wider economy by guaranteeing existing jobs and adding new ones. You can’t cut your way to growth. NSW needs to guarantee existing public sector jobs and then employ more people,” he said.

Back in March, a spokesperson from the Department of Premier and Cabinet dismissed talk of a potential wage freeze, after NSW Department of Communities and Justice boss Michael Coutts-Trotter suggested it could help mitigate a budget deficit.

“The NSW government caps annual public sector wage increases at 2.5%, with higher increases permitted if they are offset by productivity savings,” they said.

“There are no plans to change the wages policy.”

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READ MORE: Union warns against wage freeze for NSW public servants

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The latest data from the Australian Bureau of Statistics shows the NSW unemployment rate rose 1.1 percentage points to 6.0% in April this year, with 221,400 fewer people employed in the state from March to April.

Perrottet noted nearly 90% of NSW workers are in the private sector, and many of their jobs have been negatively impacted by recent events.

“We have to do whatever it takes to make sure we do not end up with a group of long-term unemployed workers who were forced out of the workforce or young workers who never get a go,” he said.

“Pausing pay rises to save and create jobs is the right thing to do, and I think most people would agree on that — especially the people whose pay has actually gone backwards, or whose jobs are gone.”