NSW lifts public sector wage cap to 3%, one-off $3000 payment to health staff

NSW will give all public sector workers a pay rise after the state government agreed to lift the cap on wages to 3 per cent this year, increasing to a possible 3.5 per cent next year. The government will also give thousands of health workers a one-off $3000 thank-you payment in recognition for their work during the pandemic.

The new two-year wages policy will give public sector workers a 3 per cent increase per annum in 2022-23 and 2023-24, with a possible further 0.5 per cent in 2023-24 for “employees that make a substantial contribution to productivity enhancing reforms”.

Premier Dominic Perrottet announces an increase to the public sector wages cap.Credit: Dean Sewell

The government has been under intense pressure from unions representing nurses, paramedics and teachers to lift the wage cap from 2.5 per cent amid rising inflation.

Premier Dominic Perrottet on Monday said the wage reform would acknowledge frontline workers in a “fair and responsible” way as the cost of living continued to rise.

“I appreciate and understand that the union bosses will have a view and they need to stand up for their members, I appreciate that. But I need to stand up for the 8 million people across our state,” he said.

“My job as Premier is to look at the competing interests of the budget to continue to make the investments today in frontline services and stand up for every single one of our people.”

Executive pay rises will remain limited to 2 per cent in the next year under the changes.

The Coalition introduced a cap on wages when it came to power in 2011.

As well as the wage increase, a $3000 “thank you” payment will be paid to all permanent NSW Health staff, including paramedics, midwives and cleaners.

The premier said the bonus would pay special tribute to health workers who have kept the community safe over the course of the pandemic.

“For their sacrifices and efforts they have made over the last two years particularly and continue to make ... as we head into the flu season”.

The state’s peak body representing public sector unions has promised more frequent industrial action unless workers secured a pay increase in line with inflation, which is currently 5.1 per cent.

The government will also recruit more than 10,000 nurses, doctors and other staff to the state’s hospitals and health services.

The Public Service Association is the latest to threaten action, with a plan to strike for 24 hours on Wednesday.

Employee Relations Minister Damien Tudehope called on union leaders to pause and reflect on Monday’s announcement, arguing it was a fair approach to wages policy.

“To link the wage cap to the inflation rate has significant impacts on the manner in which the budget will be handed down. And I’m sure there is an expectation that we deliver outcomes for the whole of NSW,” he said.

A wage increase in line with inflation would cost the state about $5 billion over four years, he said.

Secretary of Unions NSW Mark Morey said Monday’s announcement was a “short-term fix to a long-term economic crisis”, which would stall momentum for wage growth in the private sector.

“Public sector workers are already thousands of dollars out of pocket and this policy bakes in further losses,” he said.

The government will also recruit more than 10,000 nurses, doctors and other staff to the state’s hospitals and health services as part of a $4.5 billion boost to the struggling sector.

About 40 per cent of the recruits are expected to be based in regional NSW.

Midwives, paramedics, pathologists, pharmacists and allied health professionals will also make up 10,148 full-time recruits under the four-year plan, with more than 7600 to sign on in the first year, according to the state government.

Perrottet said he was confident the government would be able to source all first year recruits from NSW. However, he said his priority at a meeting of National Cabinet led by Prime Minister Anthony Albanese this week would be addressing visa delays hampering access to overseas skilled workers.

“State premiers and first ministers should be able to provide a list of those areas where we need specialist training and skills and have targeted immigration to allow us to fill these positions,” he said.

Health Minister Brad Hazzard said he planned to meet with state and territory counterparts to call on the federal government to ease the process of formerly accredited nursing staff return to the sector.

“What we have found is that people who have been out for more than 10 years have to go through quite an expensive training program and that’s regulated at a federal level,” he said.

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