Public servants’ pay freeze blocked

The Berejiklian government will now take its case to save $3bn for spending on job creation to a tribunal for legal arbitration.

NSW Premier Gladys Berejiklian in state parliament, Sydney. Picture: Dylan Robinson

A controversial attempt to freeze the salaries of more than 400,000 public sector workers was struck down in NSW parliament on Tuesday night, with the Berejiklian government now set to take its case to a tribunal for legal arbitration.

Designed to save $3bn for spending on job creation, the wage freeze was rejected by the opposition and crossbench parties in the NSW upper house with a 22-15 vote against the motion.

The government released a statement confirming it would take its policy to the Industrial Relations Commission for conciliation, which would begin Thursday.

Should these efforts be successful, the measure will halt a 2.5 per cent pay increase for frontline nurses, midwives, police officers, teachers and firefighters.

A deeply unpopular measure, the government said the savings would create up to 20,000 new jobs and work to offset an alarming rise in unemployment due to the COVID-19 pandemic. Some 221,400 people were put out of work between March 14 and May 2, according to the Australian Bureau of Statistics, lifting the state’s unemployment rate to 6 per cent in April.

The government did not provide data or modelling to support its claim, but economic modelling from The Australian Institute — a progressive think tank — claimed the opposite: that freezing wages would in fact rob the economy of 1100 jobs through the slower rate of spending.

After a week of failed deal-making and pleas for co-operation, the government faced a disallowance motion in the NSW Legislative Council where members of the opposition and crossbench parties lined up to tear down the proposed wage freeze.

It is the sixth time in nine years that a disallowance motion has succeeded in the NSW upper house.

“It is an act of economic vandalism,” said Labor’s Adam Searle, the leader of opposition business, of the government’s proposal. “It will sabotage consumer confidence, consumer spending. It’s unsupported by any modelling or evidence.”

Greens MP David Shoebridge described the measure as hypocritical, not least because pay rises had been awarded to senior public servants. Shooters, Fishers and Farmers Party leader Robert Borsak said the $3bn sought could be found in wasteful spending on “vanity projects”, such as the relocation of the Powerhouse Museum, rather than the wages of frontline workers.

NSW One Nation leader Mark Latham said the people who would wear the cost of the wage freeze had been hailed as “heroes” mere weeks ago thought the pandemic, and during the Black Summer bushfires.

In defending its proposal, the government mounted an argument based not on matters of economic efficacy but on solidarity with the private sector. Finance Minister Damien Tudehope said raising the salaries of people who remained employed — while those in the private sector were laid off — was not effective policy.

“All it (the policy) does is give more money to those with the security of a steady job,” said Mr Tudehope. “We must show solidarity with the workers who have lost a job. This is just the right thing to do.”