Public service pay freeze is the way to repair the NT economy and level out the playing field for the private sector, writes Matt Cunningham

As EBA negotiations continue for the NT’s public servants, it’s worth remembering the reasons for the pay freeze that is proving a major sticking point … writes MATT CUNNINGHAM.

AS negotiations continue over the next enterprise bargaining agreement for the Territory’s public servants, it’s worth remembering the reasons for the pay freeze that is proving a major sticking point.

Former Western Australian under treasurer John Langoulant outlines these reasons in detail in his 2019 report into budget repair.

Of course, that budget repair is the first reason.

Public sector wages are the biggest drain on the Territory’s budget, which has been going backwards at a rapid rate for the past six years.

But perhaps as important is the impact of the public service’s generous wages and conditions on the private sector.

“A gap between public and private sector wages has emerged in the Territory,” Langoulant’s report notes.

“Private businesses and non-government organisations are finding it difficult to compete with the more generous wages and entitlements offered in the NTPS, particularly in the current economic climate.

“Many of these entitlements date back to self-government in 1978 and would not exist under a contemporary remuneration structure.”

Those arguing for public service pay rises point to high inflation and the need for wages to keep pace.

This ignores the fact those wages have increased at rates well above inflation for the past six years.

Over the same time, private sector wages have been flat.

The report goes on to note there are more than 970 different allowances being paid to NTPS employees.

Aside from being hopelessly unmanageable, these entitlements make it impossible for private businesses to compete.

Yet negotiations for the new EBA are adding to these entitlements, rather than streamlining them.

Public servants are now being offered Christmas close-down leave, gender transitioning leave and NAIDOC March leave.

This is at odds with Langoulant’s advice, which noted: “The new wages policy should be supported by a review of NTPS entitlements, with the aim of harmonisation and simplification to drive operational and processing efficiencies.”

It’s also worth noting that a public sector pay freeze is very different to a private sector pay freeze.

If your pay is frozen in the private sector (as many people’s has been for years) there’s no way for your wage to increase.

In the public sector you can simply improve your classification (or your band within your classification) and your take-home pay goes up, even if your wage is effectively frozen. Langoulant notes this “classification creep” has been adding to the NT government’s budget woes.

“In 2007, the average public servant in the administrative stream was an AO4, but by 2018 the average public servant was an AO5,” the report says. “This classification creep has added around $24m per annum to the whole of government wages bill in the administrative stream alone.”

While there are many good reasons for the pay freeze, there should be some exceptions to the rule.

The Territory is experiencing a severe shortage of frontline workers, particularly nurses, teachers and police. These people often work under incredibly demanding conditions, yet in many cases are paid far less than those sitting in comfortable airconditioned offices.

It doesn’t seem right that a policy officer (total remuneration package of up to $119,865, according to the NT jobs website) can be paid almost double a police officer (starting wage for a constable just over $65,000).

In these frontline roles our wages need to be competitive to attract people to work in conditions far tougher than they might experience in other parts of the country.

But frontline workers aside, the pay freeze is reasonable and necessary. Not just to repair the budget situation, but to ensure a level playing field for the private sector, which simply can’t compete with the generous pay and conditions on offer in the public service.