NSW Budget 2023: Public sector pay rises to be aided by $3.6 billion Essential Services Fund

The Minns government has laid out its plan to help fund pay rises for public sector workers - including teachers, nurses and other frontline workers ahead of the Budget. Find out more.

Treasurer of NSW Daniel Mookhey will hand down the Budget on Tuesday. Picture: Tim Hunter.

A $3.6 billion “fighting fund” will be established by the Minns government to cover the wage rises of nurses, teachers and other frontline workers after lifting the controversial wages cap.

The establishment of the Essential Services Fund (ESF) signals the total cost of wage increases will likely exceed $4 billion over four years.

The government has declared the Fund will support “long term-growth in pay” for the public sector to help retain staff while tackling critical shortages.

It will exclude the $1.4 billion the government has declared will be found from cutting “bureaucratic waste” to go towards the historic teacher wages.

NSW Premier Chris Minns and the Labor government will unveil their Budget on Tuesday. Picture: Monique Harmer

To be unveiled in Tuesday’s Budget, the Minns government will sell the Fund as delivering on a key Labor election commitment to reinvest in frontline workers.

It has already argued how the lifting of the “unfair” 2.5 per cent wages cap was necessary to stop critical workers from quitting while attracting more people to the frontline.

The government will declare the Fund to be part of a new approach to engaging with the public sector workforce while also reinforcing a commitment to a new bargaining framework and delivering wage growth for thousands of workers.

Treasurer Daniel Mookhey said the Fund would help give frontline services the certainty they needed while also allowing them to bolster their ranks.

“Hardworking public servants keep our hospitals, schools, parks and services running,” he said.

“The people that keep our state going deserve real wages growth.

“The Essential Services Fund will give them certainty and help bolster their ranks to ensure essential services workers are supported to deliver the best outcome for the people of New South Wales.”

Minister for industrial relations, Sophie Cotsis during NSW Parliament question time. Picture: Simon Bullard

More than 400,000 public sector employees have been offered a 4.5 per cent pay increase – including 0.5 per cent increase to superannuation – for this financial year.

Along with lifting what it has described as an “unfair” wages cap, the government has also imposed a two-year salary freeze for senior executives and Members of parliament which is believes will save about $250 million over four years.

The Industrial Relations Taskforce, led by former Deputy President of the Fair Work Commission, Anna Booth, and former President of the Industrial Relations Commission, Roger Boland, has also been established to fulfil the commitment to a new interest based bargaining framework.

Industrial Relations Minister Sophie Cotsis said:

“We have already ended the wages cap. Now, we’re setting aside the funds needed to deliver wages

growth for our hardworking teachers, nurses, police officers and other public servants.

“We’re committed to improving the public sector and ending the recruitment and retention crisis in NSW”.

The State opposition has been critical of the government for having declared wage increases would be paid for from productivity outcomes.

Originally published as NSW Budget 2023: Public sector pay rises to be aided by $3.6 billion Essential Services Fund