Lower pay rises for public servants as SA returns to surplus

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South Australian public servants will offered lower pay rises in coming years, according to South Australian Budget papers released Thursday.

Although the 2016 SA Budget contains the state’s first projected surplus ($248 million) since the global financial crisis, Treasurer Tom Koutsantonis emphasised that previous wage growth rates were much higher than current inflation and “unsustainable” in the current climate.

The state government has revised its public sector wage rise cap down to 1.5% per annum for the next three years (4.5% in total over the three year period) of each enterprise agreement. 

The previous wage policy of 2.5% per annum is well above consumer price index figures and “is not sustainable in the current economic climate”, the government argues. CPI is expected to be 4% over three years.

As was previously the case, any increases above this level will need to be offset by productivity improvements or other cost reduction measures.

“The 1.5% increase still provides a real wage increase over the previous and next enterprise agreements,” said Koutsantonis in his budget speech. “We believe that in the current economic climate, where many private sector workers are being asked to take pay cuts, this target is more appropriate.”

The government hopes this measure will save $357 million across the forward estimates.

Back in Black! #SABUDGET2016 pic.twitter.com/1aPK00kzot

— Tom Koutsantonis (@TKoutsantonisMP) July 7, 2016

Funding for child protection royal commission response

Three offices of the troubled Families SA will also be consolidated into one for Adelaide’s northern suburbs. Offices at Elizabeth, Gawler and Salisbury will be consolidated into one location at the former Smithfield Plains High School. A $15 million refurbishment of the site will be partially funded from the sale of surplus sites owned by the Department for Education and Child Development.

As announced last month, Families SA is being removed from the Department of Education and Child Development to be reconstituted as the standalone Department of Child Protection after a series of high profile child protection failures leading to a royal commission. There is no specific budget provision for the machinery of government change, but the government has committed $1 million to establishing a unit within the Department of the Attorney General and hiring six full-time staff to respond to the child protection royal commission.

The budget papers retains additional funding in contingency to respond to the commission’s final recommendations, though it is not known how much. The government will make its plans public once the final report has been contemplated, says the Treasurer.