Cormann slams ‘irresponsible’ Labor for public service wage-rise call

Labor calls for a bigger boost to public sector wages to stimulate the economy are reckless, says Mathias Cormann.

Senator Mathias Cormann. Picture: Kym Smith

Finance Minister Mathias Cormann has labelled Labor calls for a bigger boost to public sector wages to stimulate the economy as reckless and irresponsible after the ­opposition pounced on new survey data that found living standards had stagnated since the global financial crisis.

The findings from the Melbourne Institute’s survey released yesterday sparked calls from ­opposition financial services spokesman Stephen Jones for the government to increase public ­sector pay to stimulate the economy and overall wages growth in Australia.

Senator Cormann slapped down the move, arguing that federal employees were getting “reasonable and affordable” pay increases through workplace bargaining and that the public sector unions’ calls for more had prevented public servants from getting wage rises at all.

“It is actually the unions that have pressured public servants into forgoing thousands of dollars in pay rises, which were on the table for them, by urging them to vote ‘no’ to above-inflation pay rises,” he said. “The anti-pay rise campaigns by the public sector ­unions — recklessly and irresponsibly supported by the Labor Party for partisan political reasons — have held back some public servants from getting pay rises which the government made available for several years.”

Senator Cormann also said that at about 167,000 people, the average staffing level of federal public servants (excluding military and ­reserves) accounted for just 1.3 per cent of the total workforce in Australia.

The Household, Income and Labour Dynamics in Australia Survey has been tracking 17,500 people in 9500 households since 2001. It revealed that a decade of stagnant wages and longer commutes to work had caused Aus­tralians to become increasingly unhappy with their work-life ­balance.

It also found the typical household’s ­income, after tax, dropped $500 to just more than $80,000 in 2017 compared with a year earlier.

Mr Jones said Australians needed a pay rise and the government should “lead by example” by boosting the wages of federal workers. “The government has got a role to play in this. The government is a big employer,’’ he said.

Before losing the election, Labor promised above-inflation pay rises for federal public servants and reversal of Coalition ­“efficiency” cuts next year.

The Coalition has cut public-service numbers from a peak of 251,200 under the ­Gillard government in 2010-11 to 239,800 in the last financial year, the lowest level since 2006-07. The government has also capped its wage bill, which has risen only 2.7 per cent in the past four years.

The government yesterday pointed to its $100 billion, 10-year infrastructure plan aimed at tackling congestion as well as income tax cuts designed to get more money into people’s pockets.

Josh Frydenberg insisted there was good news in the HILDA survey, particularly for women in the workforce, with a record 71 per cent in employment. The Treasurer said the unemployment rate was down since the survey was completed and while poverty figures had increased since 2016, they were down overall since 2007.

ACTU president Michele O’Neil said income growth had been “shocking” for eight years.

“This is in a country where we’ve seen unparalleled economic growth over a much longer period of time — 28 years,” she said.