Public servants’ $1250 bonus ‘morally wrong’

Jackie Trad’s one-off $1250 bonus for public servants attacked as ‘fiscally reckless, morally wrong’.

Queensland Treasurer and Deputy Premier, Jackie Trad at Partliament. Picture: Annette Dew

Queensland’s small business lobby has labelled Treasurer Jackie Trad’s decision to give public servants a one-off $1250 bonus, in an estimated $250m hit to the state budget bottom line, “fiscally reckless and morally wrong”.

Ms Trad made the major announcemen­t in a press release issued on Saturday, after a full parliamentary sitting week, drawing criticism from the Liberal National­ Party opposition that the Palaszczuk government lacked courage.

Ms Trad, also the Deputy Premier, confirmed that the government would retain its 2.5 per cent wage cap, but would offer the one-off $1250 payment for new public service industrial agreements, backdated from March 31 last year, to March 30, 2021.

“The governor of the Reserve Bank of Australia last month called for all levels of government to provide additional support above existing caps on wages growth to drive economic growth,” Ms Trad said in the statement.

“The offer of a one-off payment will provide this additional economic support while maintaining the budget balance.”

The government had already offered the one-off cash bonus to teachers and firefighters, to get those unions across the line to sign new deals.

But Chamber of Commerce and Industry Queensland spokesman Dan Petrie said the plan was “fiscally reckless and morally wrong” when many of the state’s small businesses, families and farmers were battling drought.

Mr Petrie said a better way for the state government to provide economic stimulus in line with the RBA governor’s recommenda­tion would be to fast-track spending on shovel-ready infrastruc­ture projects.

“There’s 10 other ways you can spend $250m in Queensland, and get a much better economic outcome­, than giving it to the public service workforce, who are among the highest-paid in the OECD,” Mr Petrie said.

Queensland public service costs are the state government’s biggest expense.

The latest budget papers confirm that, in 2019-20, public service­ employee expenses are expected to be $25.4bn, $1.3bn or 5.4 per cent higher than in 2018-19. Employee expenses, excluding­ superannuation, account for more than 42 per cent of all state government expenses.

Treasury warned that “a general 1 per cent increase in wage outcomes in one year would increas­e expenses by around $254m in that year”, and would compound after that.

University of Queensland economist John Mangan told AAP that the bonus was likely to be used to pay bills and reduce credit­ card debt.

“People will pay debt off; it’ll do nothing at all,” Professor Mangan said.

“That’s what always happens when you get these one-off incom­e jolts. If it were a permanent pay rise, that would be a completely different thing.”

Deputy Opposition Leader Tim Mander said the government was using a “taxpayer-funded handout” to secure the public service­ vote, and criticised the timing of the announcement.

“This is typical of the state governme­nt,” Mr Mander said. “They bring out announcements that they know may not be popular on a Saturday, and this time in the school holidays as well.

“They need to have the ­courage to come out and back their policies if they think they’re so effective.”

But a spokesman for Industrial Relations Minister Grace Grace said the announcement was made “once the policy was finalised”, and was in line with recommend­ations from the RBA governor.

He said the government had committed an extra $75m for drought assistance in this year’s budget, part of $670m Queensland had spent in drought-affect­ed communities since 2013.