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Fact Check: public sector pay

“Over recent weeks the Tasmanian Government has regularly accused Tasmanian unions of choosing a payrise over a pay freeze … But is this the case? Did unions choose a payrise over a pay freeze? What are the facts?”

– That’s ABC Hobart’s Louise Saunders, who compiled a fact check on the ongoing public sector pay situation. It’s a great wrap of the last few months’ events, and it is a useful resource to send to colleagues and even your friends and family, so they can understand the real story.


Click here to hear the interview, and here to read a written synopsis of the main parts of the interview.


Read the highlights from Louise Saunders’s Fact Check below.


LS (Louise Saunders): Public sector job cuts have been on the now-Premier Will Hodgman’s agenda before the election.


Will Hodgman: “We will reduce the size of the public sector by 500 positions. That’s 250 in the first year, 250 in the second year – we’ll do that through natural attrition, we’ll do that through voluntary redundancies. We will not sack people as some are claiming.”


LS: In April after the election, with the release of the analysis of budget risks the government revealed that it needed to find another 1000 FTE public sector positions that were identified savings that were not met under the previous government.

That meant there were now 1500 jobs to go but still with commitment for additional investment in targeted frontline services.

In July, a month out from the state budget, the prospect of a wage pause was raised by the Treasurer Peter Gutwein and approved by cabinet later that month.

The budget on August the 28 provided more detail. In the Treasurer’s speech he said the 12 month wage freeze and other savings would result in only an additional 200 positions to be cut across the forward estimates – a new total of 700 full time equivalent positions.

By estimates hearings in September the Treasurer was linking his $50 million pay freeze to the success of the budget.

The legislation for the pay pause is completely separate to the budget legislation although the Treasurer argued repeatedly that it was an integral part of the budget and the two cannot be separated. The legislation itself also outlined measures additional to the pay freeze including amending the Industrial Relations Act and allowing the Act to be overridden by regulation, on matters including future salary increases.

The legislation passed the House of Assembly and faced the Legislative Council, where some concerns were already being expressed ahead of debate.


Murchison MLC Ruth Forrest: “They did not go to the election with a mandate for a wage freeze”


LS: In the Upper House the government made concessions to its legislation but ultimately failed to get it through and moved forward with plans to cut jobs.

Except the legislation was not defeated, it was withdrawn by the government after the Legislative Council moved to suspend debate for negotiations between the government and unions for a period of a month.

Councilors, such as Hobart MLC Rob Valentine, expressed their concerns both in an out of parliament.


Hobart MLC Rob Valentine: “It’s not just a wage freeze – it’s actually dabbling in the industrial relations space and it’s fiddling with that. To think that the government through this Bill would be trying to insert itself into that space and asking the Legislative Council to be a part of that, I think that is fraught with danger.”


LS: Now 1200 were to be axed, 700 plus the 500 that would’ve been saved by the proposed pay freeze.

After having said in the wake of the axing of its Bill that it was too late for negotiations, in mid-October the Treasurer gave unions the opportunity to make a pay freeze proposal.


For the unions this meant having to seek permission from Members to open up their agreements. This applied to all Awards and Agreements, including the Education Union’s, which was in the first year of a three year deal for 2% wage increases in March 2014 through to 2016. The 2% public sector increase was a restraint negotiated by the previous government with the unions.

At the end of October the government rejected a union offer for a pay freeze, saying it didn’t add up.

In November the unions succeeded at taking the matter before the Industrial Commission, the Commission’s President Tim Abey recommended in the strongest possible terms that the unions accept a 12 month wage freeze from December and suggested that the government cap cuts at 361 roles in this financial year.

Unions welcomed the decision. Treasurer Peter Gutwein said the Industrial Commission’s recommendations did not deliver the structural savings required and would not be accepted.

821 jobs were not to be cut by July 2015, with department heads charged with the identification of those positions. In parliament the next day he calculated the cost of the TIC proposal at $70m.

On November 27 union members, including the Education Union, took part in a stopwork, with meetings around the state, in which they voted to endorse a 12 month wage freeze.

The Premier rejected this.

So did the unions choose a pay rise over a pay freeze? Most of the unions, including the Education union, have current legally valid wage agreements that provide for wage rises. In the case of teachers, it’s for 2% a year, over three years until 2016.

To open that up for modification the union must poll its members; the executive cannot act on its own.

In October the unions made an offer for a six month wage freeze that was rejected.

Education union members voted at a series of meetings in October to support negotiated wage savings on condition the government reverse its decision to sack an additional 500 public sector workers. In November the unions voted to endorse a 12 month pay freeze recommendation. The government rejected their offers and the offers of the TIC for the 12 month freeze.

On the facts it would appear unfounded to say the unions chose a pay rise over a wage freeze.

LS: Did the unions vote to reject a pay freeze?

The government’s efforts to legislate for a pay freeze failed when they withdrew it from before the Legislative Council.

The government, in a statement from the Treasurer on November the 12th, said the pay freeze proposal was officially off the table.

Two weeks later the unions remain in support of a pay freeze at their stop works. A failure by the government to secure union support for its proposals for a freeze does not equate to a rejection of the pay freeze – this would appear to be an unfounded statement.

The Education union, along with other unions, have made or have been party to a number of proposals put before the government and or the Industrial Commission. This too would therefore appear to be an unfounded statement, based on the facts.


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