Unions decry NSW government’s ‘insulting’ public sector wage cap increase

The New South Wales government’s attempt to head off industrial action by boosting the public sector wage cap by 0.5% appears unlikely to succeed, with multiple unions calling the measure insulting.

The pre-budget announcement was made on Monday alongside a $4.5bn health workforce investment including a goal to hire more than 7,500 healthcare workers over the next 12 months, prompting questions from the opposition over its feasibility.

Premier Dominic Perrottet announced the public sector wage cap would rise from 2.5% to 3% this financial year, and 3.5% the next, depending on productivity gains.

He said it was “fair and responsible” given the “competing challenges” facing the government.

NSW employee relations minister, Damien Tudehope, urged union bosses to halt planned industrial action.

“Pause, reflect and see that this represents a fair and responsible approach to wages policy,” he said.

He acknowledged it was not in line with inflation as they have been calling for but he said an increase at that level would have cost the state about $5bn over four years.

But unions lashed the government over the announcement and the Public Service Association on Monday night voted to proceed with a planned action on Wednesday.

PSA general secretary Stewart Little said the wage cap announcement was “bewildering and insulting to all frontline workers”.

“Overwhelmingly our members are angry … and unanimously supported that we continue with the action,” he said.

“The Perrottet government needs to have a rethink on this because our members are certainly not going to lay down and make this decision lightly.”

Secretary of Unions NSW, Mark Morey, said it was a “short-term fix to a long-term economic crisis” while Teachers Federation NSW president Angelo Gavrielatos said the move “adds insult to injury” and represented a pay cut in real terms amid high inflation.

NSW Nurses and Midwives’ Association (NSWNMA) assistant general secretary, Michael Whaites, said it was a “slap in the face”, while also pointing to issues in the government’s major workforce plan that the union said did not address nurse-to-patient ratios.

A report commissioned by Unions NSW that was released at the weekend found nurses, teachers, police and paramedics all faced being thousands of dollars worse off due to the 2.5% cap on wage increases introduced in 2011.

After the announcements on Monday, report author Griffith University’s emeritus professor of industrial relations David Peetz told the Guardian workers would still be worse off.

“The workers who are affected by the pay cap would still be worse off under this, but they’d be worse off by a lesser amount,” he said.

The government also announced that over the next four years it planned to hire more than 10,000 health workers to combat shortages, including in regional and remote areas, as well as provide relief to those who worked during the pandemic.

Opposition leader Chris Minns questioned how the government planned to attract more than 7,500 of those doctors, nurses and allied health professionals the government wants to hire in the next year.

“The devil is in the detail here and we need to understand more how that policy will be run out,” he said.

“We need to make sure that we’ve got long-term solutions for the workforce in our public hospital system.”

Other states and the federal government are also attempting to hire healthcare workers en masse, but Perrottet said he had received advice that the state would not have to rely on foreign workers to fill the roles.

“We are confident, but there is no doubt that’s something that we’ll be focusing on because yes, you can allocate the dollars but we need to fill the positions,” he said.

“I would expect that many people will be attracted to these roles that we provided today.”

He said dealing with skilled migration in health and other areas of the economy was still a key focus, and he and Victorian premier Daniel Andrews would present a united force at the first national cabinet with prime minister Anthony Albanese.

Alongside the wage cap increase, the government also announced one-off “thank you” payments to healthcare workers of $3,000.

Whaites, NSWNMA’s assistant general secretary, said the money would be welcome to eligible members but said it was not enough and would not provide them security.

“This isn’t going to help them with their cost-of-living pressures in two weeks’ time, or in two months’ time, or in two years’ time.”

Morey also said the decision to exclude other workers, such as teachers, from the payment would “create problems”.

“It’s dangerous when you start picking winners and losers,” he said.

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