A Wage Freeze !

The public service is the pace setter of wages in the general community and for the past nine years it has been granted a 2.5 percent increase annually, which has not been reflected in any upward movement in private industry.  Our leading economists agree that increases in company profits have not trickled downward to the average wage earner.

The New South Wales government flick passed this wage issue on to the Industrial Relations Commission and that resulted in public service wages being increased by just 0.3 % for the next twelve months. The government has been seeking this virtual wage freeze because it contends that the money would be better spent getting the unemployed into jobs. The coronavirus lockdown seems certain to swell the unemployment roll once relief plans end and that 2.5% increase would cost the state treasurer about 3 billion dollars.

There is a promise that this cut in wage increases for the public service will be for just this one year and that 2.5% increases will apply from next year onward, but we tread dangerous ground when we interfere with the cost of living.  The boards of profitable companies will take notice of that public service decision and are unlikely to reward their workers with pay increases - and Australia has seen weekly pay fairly static for the past several years.

Australian industry was overdue for a pay increase because we had an abnormally low unemployment rate.  To many this looks like a conflict between the Federal and the state government.   Canberra is  spending billions to prop up industries and stop the collapses that would inflate the unemployment roll  while the state is forcing a pay cut on essential workers to stabilize the state economy.

The two biggest sections of the state work force are teachers and nurses.  We have vastly overcrowded schools with many classes being held in uncomfortable temporary classrooms dumped on recreation areas as a semi permanent measure.  Many still lack air conditioning despite constant summer heat records being broken because of global warming.

The teachers are under pressure to prepare their students for the skills challenges that lay ahead as the workplace consists of more robotics and AI.  That challenge will involve preparing students for higher learning when they pass on to university to try and end the abyssmal dropout rate that leaves so many with no degree, but an enormous debt.

That pay freezer on nurses comes as our hospitals are emerging from the second world pandemic of modern times.  It was a time of great personal danger and many of our medical people became infected by the nature of their work of caring for the seriously ill.  It is scant reward to ask them to accept a pay cut that will last for a further year.

All tiers of government must accept the need for deficit spending to overcome this unexpected health calamity.  The cost can not be avoided by placing it on the shoulders of the average wage earner.  In particular, this freeze will have immediate effect by halting upward pay increases in all sections of industry at the very time we are urged to spend to cement the recovery !