Pay rises cut for public servants

 

NSW public servants will have their pay rises capped at 1.5 per cent in a State Budget move designed to save the taxpayer billions of dollars post-pandemic.

The Daily Telegraph can reveal the government agreed last night in Cabinet to abandon the long term commitment to giving public servants a yearly pay increase of up to 2.5 per cent, and will replace the regulation with a commitment they receive "up to 1.5 per cent".

It comes after the government this year asked public servants to accept a one-year pay freeze on their wages, and will spark a war with the unions. With the exception of this year, the government has routinely awarded 2.5 per cent.

NSW Treasurer Dominic Perrottet with Premier Gladys Berejiklian. Picture: NCA NewsWire/Joel Carrett
NSW Treasurer Dominic Perrottet with Premier Gladys Berejiklian. Picture: NCA NewsWire/Joel Carrett

The arrangement is a key savings measure in the November 17 Budget, where Treasurer Dominic Perrottet will prioritise jobs and the economy with record stimulus, but also map a path back to a strong budget position.

The one-year wage freeze, which the Industrial Relations Commission revised into a 0.3 per cent pay rise, already saved about $3 billion over the forward estimates. Limiting pay rises to just 1.5 per cent will save $1.8 billion over three years, it is understood.

The 1.5 per cent proposal is Treasury's average inflation estimate, but there is a chance any pay rise could be smaller.

Mr Perrottet told the Telegraph "at a time when private sector wages are flat, when many people are taking a pay cut and losing jobs, it is most appropriate we strike the right balance".

Dominic Perrottet said unpopular decisions had to be made during a pandemic. Picture: NCA NewsWire / James Gourley
Dominic Perrottet said unpopular decisions had to be made during a pandemic. Picture: NCA NewsWire / James Gourley

"Public servants are doing a fantastic job particularly during COVID but we can't forget public sector wages are paid by private sector wages and we need to have a fair system in place," he said.

He said politicians should also be tied to the same scheme and "they aren't special".

"In a pandemic you're going to make decisions that won't be popular. But I'm not here to be popular, I'm here to do what's right," he said.

It can also be revealed the government will invest in an army of hundreds of workers to install LED lights in public schools as the first in a series of small-scale infrastructure building projects to drive the economy.

The investment costs $157.8m and will be part of record stimulus in the Budget, also reducing energy bills by millions of dollars each year.

Mr Perrottet said his focus was on keeping as many people in jobs as possible.

He said discipline the state had displayed to maintain a Triple A credit rating was important to carry forward.

He said the rating was "not an end in itself" but "the discipline must be maintained".

"It can be easy for discipline to deteriorate, that won't happen here. We will invest for impact and reform for the future," he said.

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Originally published as Pay rises cut for public servants


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