NSW nurses want a better pay deal. They have a strong case

Nurses in NSW deserve our support as they prepare to strike on Wednesday. When it comes to underpayment, they’ve been given a raw deal.

From 2012 to 2023, their wages were suppressed by the Coalition’s 2.5 per cent cap on public sector pay. After the COVID inflation spike, their real pay is now more than 10 per cent lower than two decades ago based on Consumer Price Index (CPI). It’s more like 15 per cent lower if you use the Living Cost Index, which takes proper account of housing costs.

Nurses demonstrate outside Premier Chris Minns electorate office in September.Credit: Janie Barrett

NSW teachers have seen their wages rise by 10 to 14 per cent over the last year. As part of their latest settlement, their pay will rise by 19 to 23 per cent from 2023 to 2027. Paramedics will receive a pay bump of up to 28 per cent between now and 2026. NSW Police have just been offered a deal worth 22.3 to 39.4 per cent over four years.

Nurses deserve equal treatment.

The NSW government, economic policy officials like those at the Reserve Bank and their acolytes in the economic commentariat will run the same old tired lines: “This is unaffordable” and “such pay rises will only drive up inflation”.

But let’s be realistic: for some people there is never the right time for essential workers to get a decent pay rise. They always caution about risks of increases, rarely the need to raise them.

As he planned for post-war construction in 1944, economist John Maynard Keynes observed: “Anything we can actually do, we can afford.”

He was referring to a massive housing program needed after years of restricted home building. As he noted, the country had the material and human labour power. What it needed was the imagination and organisation to put labour and material together to come up with a solution. The problem could not be solved overnight. With considered thought, priorities and effective planning, a solution could be – and was – found.

We have the resources for the health system of today and yet we have trained nurses not working in the profession and empty hospital wards. As a society, we are not prioritising financial resources to lift the quality and scale of our health system. The needed resources are there; they are just in the wrong place.

Last week, the Australian Financial Review reported the CEOs of the two stockmarket-listed private health insurers were on salaries of more than $3.8 million per annum each. That is around $75,000 a week – the equivalent of the annual base pay for an entry-level nurse.

Private health insurers are sitting of reserves of over $1 billion. As the Medical Technology Association of Australia has noted: “Corporate health insurers also saw their ‘management expenses’ – executive bonuses, salaries, marketing spend – grow from $2.82 billion to $3.45 billion in the year to March 2024, an increase of 19 per cent.”

The performance of private health insurance is not an artefact of entrepreneurial genius. Tax incentives, which began with the Howard government, ensure private health insurance is supported by many of us who are effectively taxed to pay for their survival.

Instead of trotting out the same old mantras about why nurses can’t get better pay and conditions, why don’t we debate Keynes’ insight?

Our nurses and our health system face deep problems. But they are not insoluble. We may not be able to solve them overnight, but with serious thought, planning and shifting of priorities, solutions can be found.

Debating how to do that and breaking with the policy rigidities that got us into this situation is what is needed. The nurses of NSW deserve our strongest support. They are challenging us all to find a better path forward.

John Buchanan is a professor at the University of Sydney Business School. He has undertaken research for the NSW Nurses and Midwives Association on wages policy.