Dominic Perrottet warns Labor’s pay rise plan will plunge NSW budget into deficit

NSW Treasurer Dominic Perrottet says Labor’s plan to allow the Industrial Relations Commission to set pay rises for public service workers would will strip billions from the budget and plunge it into deficit.

• Labor wants to stop major projects
• Daley vows to hire thousands of more teachers

NSW Treasurer Dominic Perrottet says NSW Labor’s plan to allow the Industrial Relations Commission to set pay rises for public service workers would strip billions from the budget and plunge it into deficit.

There are 396,000 public servants in NSW who currently receive capped payrises of 2.5 per cent each year — which is higher than the NSW average of 2.4 per cent.

NSW Treasurer Dominic Perrottet says Labor’s plan to award every public servant in NSW with a payrise will plunge the budget into deficit.

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Labor leader Michael Daley told The National Press Club today they had yet to cost their proposed increase to the public service wage cap.

“No-one should be afraid of the consequences of this. It’s all about fairness and being properly rewarded for your day’s work. If there’s one thing the Labor Party has always been about, it’s been about that. That will never change,” he told the National Press Club today.

“We’ll have a sensible wages policy.”

NSW Labor shadow treasurer Ryan Park told The Daily Telegraph he wants an independent umpire to set payrises instead of politicians, which he argues is a fairer policy.

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“Labor will have a fair and balanced wages policy that restores the link between wages and productivity. The independent umpire will set wages in NSW not politicians,” he said.

“Workers will be able to go to the Industrial Relations Commission and argue their case for a pay rise if they can demonstrate productivity gains.”

“The Treasurer has revealed his plan to further suppress the wages of firefighters, nurses, paramedics, police and other public sector workers. Having burned through more than $14 billion in cost blow outs and mismanagement, Dominic Perrottet now wants public sector workers to pay for his mismanagement,” Mr Park said.

“What that does is not only improve the lives of working men and women but it also helps the economy because people have got a little bit more to spend on discretionary items,” Mr Park said.

Mr Perrottet said a payrise of 3.5 per cent would rip $5 billion from the economy over the next four years, whereas a rise of 4 per cent would rip $7 billion.

“Here we have a Labor opposition before they have even got into government having a policy that will scrap the cap and plunge the NSW budget into deficit,” he said.

NSW Leader of the Opposition Michael Daley. Picture: AAP

“The people of NSW should be alert and alarmed with what the Labor Party will do to our state’s budget.”

Mr Perrottet said public sector wages comprise about 40 per cent of the annual budget’s expenditure.

“It is the height of recklessness at a time when we have a softening property market, to be scrapping a (wages cap) policy that has maintained budget surpluses here in our state,” he said.

Last month Reserve Bank of Australia governor Philip Lowe said wages growth of 3.5 per cent and inflation at 2.5 per cent each year would be best for the Australian economy.