Coronavirus: Gladys Berejiklian freezes pay of 400,000 NSW public servants to share pain

More than 400,000 NSW public servants have salaries frozen with savings diverted towards jobs.

NSW Premier Gladys Berejiklian in Sydney on Wednesday. Picture: AAP

The salaries of more than 400,000 NSW public servants will be frozen so the NSW Berejiklian government can divert the savings towards job creation and a guarantee that there will be no forced redundancies below the senior executive level.

NSW Treasurer Dominic Perrottet said the decision — expected to save $3bn over four years — was based on the premise that creating and guaranteeing jobs would stimulate the economy more than giving workers a pay rise.

The government’s announcement was met with immediate criticism from political opponents, namely NSW Labor and crossbench MPs, some of whom vowed to support a disallowance motion in the state upper house to stop the wage freeze.

Mr Perrottet said private sector workers had undergone similar hardships, and it was their taxes that funded public sector salaries.

“You will stimulate the economy by giving people a job, more so than giving people a pay rise,” he said.

“We have 200,000 people across our state who lost their jobs just last month. There are hundreds of thousands of people in a JobKeeper program … and that program runs out in September.”

The announcement comes in the wake of significant salary increases granted to many senior public servants in recent months, including NSW Police Commissioner Mick Fuller, whose salary was reviewed at the direction of the Premier and before rising by 15.4 per cent.

Mr Perrottet said the government would rely on regulation rather than legislation to enforce the policy, which was forecast to save $3bn over four years.

This would occur as more than 100 wage agreements were gradually renegotiated; the bulk of these agreements will take effect from July 1, but others will be renegotiated next year and beyond, a government official said. Regardless of when they begin, wages will be frozen for the first 12 months, although the Premier was unable to guarantee whether the measure would not be extended.

Similar wage freezes have occurred elsewhere, including in Queensland, where the Palas­zczuk Labor government is facing legal action for retrospectively pausing the wages for salary agreements that had taken effect.

Victoria’s public servants appear likely to escape a wage freeze after Premier Daniel Andrews ­accepted an 11.8 per cent pay rise for himself and his ministers.

According to data released by the Australian Bureau of Statistics, some 221,400 people have been put out of work by the COVID-19 pandemic between March 14 and May 2, lifting the NSW’s unemployment rate to 6 per cent in April, a figure expected to rise further in coming months.

It stands to affect about 410,000 public service employees, among them police officers, teachers, nurses and midwives.

While multiple models were presented to the government for consideration, the decision was said to be unanimously supported within the Berejiklian cabinet, said two ministers who were privy to those discussions.

NSW Premier Gladys Berejiklian said had the pay increase been granted, the government would not have been able to guarantee jobs across the public sector.

She implored the community to be sympathetic with the decision. “Today is not about saving the budget. It’s not about managing the economy,” she said.

“It’s all about saving livelihoods, saving jobs, saving lives. Any government in our shoes would do the same thing.”

Critics pointed to the billion-dollar relocation of the Powerhouse Museum and spending on a revamped sports stadium as two measures that could have been put on hold to preserve the wage increases, or to stimulate jobs growth.

To proceed, the government will need four supporting votes from the One Nation Party and members of the Shooters, Fishers and Farmers Party.

Both said they remained unpersuaded by the government’s ­arguments.

“This government should be quitting projects like the Powerhouse Museum, abandoning the ANZ stadium development, and other such vanity projects, and use the money where it’s needed to pay frontline services,” said Shooters leader Robert Borsak.

NSW Labor leader Jodi McKay described the wage freeze as a “kick in the guts” for frontline workers exposed to heightened risk during the pandemic.

“If Gladys Berejiklian is desperate for savings, she should cancel the $1.5bn relocation of the Powerhouse Museum.

“The government has spent $38m on consultants for that project and failed to create a single job,” Ms McKay said.