By Natalie Jones
CPSU Assistant Secretary
Treasurer Eric Abetz’s recent comments about the cost of public sector wage increases are misleading and fail to acknowledge broader economic and social realities.
While the Treasurer frames wage rises as an unsustainable burden, this narrative ignores the long-term benefits of fair pay and the real cost of underinvestment in essential services.
The claim that increasing wages would blow out the budget assumes public sector wages are a drain rather than an investment.
In reality, fair wages attract and retain skilled professionals, reduce turnover costs, and ensure continuity in public services. These services go far beyond health and education — they include child safety, justice, environmental protection, biosecurity, and industry regulation. Cutting corners and stagnating wages is a false economy that neglects the needs of our community.
Tasmanian public sector workers are among the lowest paid in the country. On average, they earn $5,000 to $6,000 less per year than mainland counterparts doing the same work. Wage growth here continues to lag behind national trends — just around 3% last year compared to over 4% elsewhere.
Long gone are the days when living in Tasmania was considered cheaper than the mainland. In recent times, the cost of living has exceeded that of some other states. Meanwhile, inflation has eroded real incomes by more than 14% since 2022, leaving workers worse off and struggling to keep pace with rising costs.
This isn’t fiscal prudence — it’s wage stagnation that undermines living standards and service quality.
The Treasurer talks about affordability, but the real crisis is in recruitment. Hundreds of positions remain vacant across the public sector, and these aren’t only in so-called “backline” roles.
In one recent alarming example, critical frontline work in child safety was outsourced to mainland contractors at significant cost, where local knowledge is crucial for supporting vulnerable children and families. Vacancy rates have skyrocketed over the past decade. Why? Because our wages and conditions aren’t competitive. Skilled professionals are leaving for better pay interstate, and we can’t attract replacements.
This means more than longer hospital wait times or poorer educational support for kids — it means critical shortages across every aspect of our public service. Investing in wages would help fill these gaps and restore service capacity.
While claiming they can’t afford wage rises, the government is burning through hundreds of millions on consultants, contractors, and labour hire. In Health alone, Tasmania spent over $180 million last year on agency nurses and locum doctors — up from around $57 million just three years ago. These roles cost two to three times more than employing permanent staff. That’s not fiscal responsibility — it’s waste on a grand scale.
Competitive pay isn’t a cost, it’s an investment. Fair wages reduce turnover, slash recruitment costs, and cut reliance on overpriced agency staff. They also boost local economies — every dollar paid to a public sector worker circulates through Tasmanian businesses. Over a few years, investing in wages could save millions and strengthen essential services.
We acknowledge Tasmania faces a serious fiscal challenge, but as economist Saul Eslake has warned, cutting public sector jobs or suppressing wages is not the answer. Doing so would damage service delivery and weaken the economy.
Instead, the government should focus on maintaining a capable workforce with fair salaries and reviewing how it manages the public service. If funds can be found to outsource services at huge expense and provide investment incentives to private industry, surely we can invest in local people who provide essential support to our communities and spend their wages in our state.
And let’s not ignore the human cost of neglect. A growing number of public sector workers are receiving workers’ compensation for psychosocial injuries caused by crushing workloads — a direct result of short-staffing — and a complaints system that is failing. Many of these workers are crying out for support to return to the workplace that never comes. The cost of this inaction should not be borne by our public sector workforce or our community.
While these systemic issues go unaddressed, the government obsesses over short-term savings. Underpaying staff and overloading them doesn’t just break budgets, it breaks people.
Governments are elected to safeguard and improve our public sector. Fair pay for those who deliver services to our community is a critical foundation of a functioning state.
It’s time for Mr Abetz and his colleagues to stop the spin and start investing in the people who keep Tasmania running.