Unions demand Chris Minns make public sector wages and conditions a priority

  • Published March 27, 2023

The Australian, 27 March 2023

Unions in NSW are using the ­election of Chris Minns to demand that lifting public sector wages and conditions be a first-order priority for the incoming Labor government, calling for negotiations to start as soon as the cabinet is sworn into office.

After leading his party back into government after 12 years in the wilderness, Mr Minns declared his team would not waste an hour in government, saying he would convene a leadership meeting with senior ministers on Sunday afternoon to ensure the party was ready to govern.

Labor is on track to form a majority government in NSW after ­recording a 6.3 percentage point two-party-preferred swing. Requiring 47 seats to govern in its own right, Labor has won 45 seats and leads in four out of eight other seats too close to call.

As the dust settles on Labor’s rout of the Liberal Party, union attention has turned to incoming premier Mr Minns’ election promise to abolish the Coalition’s public sector wage cap of 3 per cent, after successive years of soaring inflation ate into real wages.

With all mainland states and territories governments now under Labor control, Mr Albanese and Workplace Relations Minister Tony Burke are expected to continue broadening and harmonising their IR reforms in partnership with ALP governments.

In a move that upset the nation’s biggest employers, who helped keep the economy afloat during and beyond the pandemic, the Albanese government struck a deal with the Greens and crossbenchers in December last year to legislate its Secure Jobs, Better Pay multi-employer bargaining rules.

In a boost to unions, the federal government has this year pledged to implement the second phase of its IR shake-up ­focused on its labour hire reforms and revival of Labor’s controversial road safety remuneration tribunal under a new crackdown enabling the Fair Work Commission to “set minimum standards” for road transport workers.

Mr Minns said a wages cap would be an “urgent priority” for the new NSW government, saying he would seek to sit down with essential workers and their union representatives to map out the “next stage forward”.

While he declined to say how big an increase he was expecting, NSW Teachers Federation president Angelo Gavrielatos said he expected Labor to begin negoti­ations with union officials immediately, addressing the “deliberate neglect” of the state’s education system.

“The federation is ready to work with the Minns government to urgently address the unsustainable workloads and uncompetitive salaries of teachers that are responsible for the teacher shortage crisis and begin implementation of NSW Labor’s commitments of greater support and funding for public schools and TAFE,” he said.

Mr Gavrielatos said he would enter the negotiations in “good faith” but expected the same in kind from Labor.

Labor did not include the costings for the abolishment in their election policy promises, but the Parliamentary Budget Office said an increase of 1 per cent would cost the budget $2.6bn.

Mr Minns has previously ­declined to clarify whether workers would get a pay rise above the 3 per cent limit.

Labor has previously said any wage increases would be carved out of budgetary savings and productivity gains.

Former ACTU secretary Bill Kelty noted the six-point difference between the rate of inflation over the preceding three years and wages growth, saying if he was still in his previous role, he would have demanded a “substantial increase”.

“I would be prepared to accept the phasing in over time. I would sit down and look at the economic capacity, and what is the need. We will phase it in over time. Otherwise it all comes from taxes and inflation,” he said.

Health Services Union secretary Gerard Hayes agreed that negotiations should be a first-order priority for the incoming Labor government, but said wages were only part of the ­solution and the HSU was ultimately seeking to reform the hospital system. “We need to reinvent the health system from being about acute care to being preventive,” he said. “Our job is to ensure the commitments we got prior to taking government are held. They will see the books soon to get a sense of how good or bad things are.”

Unions NSW secretary Mark Morey agreed that wages would comprise only part of the problem, noting frontline working conditions were exacerbating the stress and burnout of staff, leading to higher numbers of workers leaving the sector.

Centre for Independent Studies chief economist Peter Tulip called on Labor to show restraint in handing out wage increases, saying any rises should be targeted towards sectors suffering skills shortages, like nursing and teachers, to avoid the risk of entering a wage-price spiral.

“If wage increases can be focused on areas where there are shortages and quarantine these areas, that should be the approach,” he said.

“It’s a difficult position. There’s clearly a lot of public support for wage increases so the political pressures are strong and the economic pressures are strong for particular areas of shortage and that will require talent on the part of the new government.”

AMP chief economist Shane Oliver said the risk of a blowout in wages growth was predicated on the Labor government being sensible, as budgetary savings to allow for the increases would be “tough to find in this economic environment”.

“If they pursue a Whitlam-era surge in wages, beyond what’s justified by productivity and inflation, it could have an even worse impact,” he said.