Budget relies on unrealistic wage provision

Michael Ferguson’s 2022/23 budget is built on the fallacy that Tasmania’s 30,000 public sector workers will accept a real cut in wages across the four years of the budget. 

Despite inflation forecast to exceed 6% by the end of 2023, the Treasurer has only made provision in his budget for wages to rise by 2.5% – in effect a 3.5% cut in real wages in the first year.  In the out years he has also only made provision for 2.5% rises and while he expects inflation to quickly head back down to 2.5%, there are plenty of economists who believe it will be much higher than that for much longer. 

On the positive side the Treasurer did indicate that the provisions in the budget were neither a wages policy nor a wages cap, and that if negotiated outcomes are higher than they will have to be funded.  It’s also worth noting the Treasurer’s Reserve is funded at $300 million over the 4 years of the budget and there is $180 million in the Finance General miscellaneous fund. 

Thanks Isn’t Enough

While I’m sure you were all very pleased to receive the admiration of the outgoing Premier Peter Gutwein and thanks from the new Premier Jeremy Rockliff, thanks and admiration won’t pay the bills.   

Public Sector workers expect and deserve that their salary will, as a minimum, keep up with the rising cost of living.  In fact, according to the Reserve Bank Governor, wages should be rising by an amount equivalent to CPI plus productivity.  This would ensure an equitable share of profits between workers and capital. 

We Face a Recruitment Crisis 

The worst effect of real wages falling is that we will be unable to recruit and retain the workers we need to deliver services to Tasmanians.  We already have a recruitment crisis in many parts of the service and with unemployment at record lows and other states actively recruiting, this crisis will only worsen.   

The Treasurer seems to think this won’t be a problem because Tasmania is such a nice place to live, but if you speak to people involved in recruitment they’ll tell you that many people offered jobs in Tasmania subsequently turn down the role when they discover how expensive our rent and house prices are. 

The budget was totally silent when it comes to ways to make Tasmania’s public sector a more attractive recruitment destination or clever ideas to reward those already in the service, so they stay – apart from the real pay cut. 

CPSU members have put forward a range of ideas to address these issues and these will form part of the bargaining claim that will be finalised this month ahead of bargaining commencing in July.