SA State Budget 2016: Treasurer Tom Koutsantonis freezes public sector pay increases to 1.5 per cent

THE State Government has potentially picked a fight with public service unions after decreeing wage rises will be limited to an annual rate of 1.5 per cent for the next three years.

The State Treasurer Tom Koutsantonis has frozen pay increases for public servants for three years.

THE State Government has potentially picked a fight with public service unions after decreeing wage rises will be limited to an annual rate of 1.5 per cent for the next three years.

Treasurer Tom Koutsantonis said the cap on wage rises would save $357 million over the next four years.

Mr Koutsantonis said public servants should be grateful to receive 1.5 per cent, as many other SA workers would be lucky to receive any pay rise at all.

“We are not asking them to take a pay cut,’’ he said.

“There are many South Australians working in the private sector in retail, in mining, in manufacturing who are being asked to do it a lot tougher.

“They are not being asked to take real wage decreases, they are being asked to take wage freezes.’’

Mr Koutsantonis said over three years, public service wage rises would total 4.5 per cent, while predicting inflation would rise by only 4 per cent over the same time frame.

The government’s previous policy was to limit wage rises to an annual rate of 2.5 per cent.

Mr Koutsantonis denied he was attempting to drive workers out of the public service.

“I think it is only appropriate in the public sector we cut our cloth to suit the times,’’ he said.

“We have unacceptably high unemployment, it’s not my aspiration to get rid of thousands of public servants, it is my aspiration to keep our wages bill under control so I can maintain a level of employment.’’