The New South Wales government is considering a one-off wage freeze for public servants in an attempt to mitigate a budget deficit, but the state’s public service union says the move will “cripple” the economy and put extra pressure on workers and families.
It comes following reports that the recent bushfire crisis and the coronavirus would detract between one third of a percentage point and two-thirds of a percentage point from state growth this financial year.
NSW Department of Communities and Justice boss Michael Coutts-Trotter was the first secretary of several to suggest a wage freeze could help limit a large deficit, according to The Sun-Herald. Sources told the paper the move could save an estimated $2 billion over the four-year forward estimates.
A spokesperson from the Department of Premier and Cabinet dismissed the claims.
“The NSW government caps annual public sector wage increases at 2.5%, with higher increases permitted if they are offset by productivity savings,” they told The Sun-Herald.
“There are no plans to change the wages policy.”
The Public Service Association has voiced its concerns over the news, arguing a wage freeze would “cripple the state’s economy, after a horror summer”.
PSA general secretary Stewart Little noted that the NSW government last year slashed departmental budgets on top of the 2.5% cap on yearly pay rises.
“In the 2019 budget, we saw devastating cuts to public services across the state — this mooted wage freeze would be like trying to get blood from a stone, there is simply nothing left to squeeze out,” he said.
According to the union, Service NSW was cut by 8.3%, or $44.5 million, the Office of the NSW Rural Fire Service was slashed by 4.8% ($26.7m), and the corruption watchdog ICAC was cut by 10.3% ($2.9m).
The NSW Education Standards Authority faced a $26.5m cut of 15.3%, while the Crown Finance Entity was slashed by 19.4% — a whopping $2.358b.
Fire and Rescue NSW, the Judicial Commission, Legal Aid, and the Environmental Trust were also subject to millions of dollars worth of cuts.
Little argued that a freeze in wages would place even more pressure on workers and their families after an already stressful summer.
“After a summer of catastrophic bushfires and floods, and now the looming impact of COVID-19, Premier Berejikilian has the power to breathe life into the state’s economy and help insulate families from further economic shocks,” he said.
“I believe we can find a way to work with the Premier and Treasurer to help bolster the economy, but suppressing wages is not the way.”
He noted the NSW government is the biggest employer in the country, accounting for one in 10 jobs across the state.
There are roughly 330,000 people working in the NSW public sector.