The decision to cut pay raises supposedly 'strikes a fair balance' amid economic turmoil
The budget for public sector wage increases in New South Wales will be slashed in a bid to save the state $1.8bn in the next three years, NSW Treasurer Dominic Perrottet announced.
Pay increases will be cut from a rate of 2.5%, as seen in the past nine years, to just 1.5% in keeping with inflation forecasts and as NSW struggles with a 7.2% jobless rate amid the economic crisis.
“We want to keep as many people in work during this period of time and we think this decision strikes a fair balance,” said Perrottet, who is expected to unveil the state budget on 17 November.
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Despite capping the increases, the treasurer believes NSW is following a “generous policy” considering how wages in the private sector have generally been stagnant.
“I think if you look at our wages policy here in NSW, compared to anywhere else in the country, it’s completely fair and reasonable and very generous in the circumstances,” Perrottet said. “We don’t want to have a two-tiered society here; we’re all in this together.”
Unions advocating for public sector employees are pushing back. They believe the cuts will only hamper economic recovery in NSW.
“Forty per cent of public sector workers live and work in regional communities,” said Stewart Little of the NSW Public Service Association. “There is nothing more stimulatory than fair and reasonable pay rises for those workers.”
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While the Federal Government is rolling out tax cuts, “you’ve got the most prosperous State Government in the country turning around and saying ‘we can’t afford anything’ – it just seems counterintuitive,” he said in a report from ABC News.
Last month, the NSW Industrial Relations Commission (IRC) ruled wage increases for the public sector be capped at just 0.3% for 12 months.
The decision was handed down after NSW Premier Gladys Berejiklian and her Liberal-National government failed to implement a 12-month pay freeze for public sector workers.
The NSW government said the halt in wage increases was necessary since the state is redirecting funding towards job creation.