The latest CPI data underlines the need for Tasmanian public sector workers to get a significant pay rise. Nationally CPI had risen to 6.1% and in Tasmania it was measured at 6.5%. This is what your costs are rising by so your wages need to rise by at least this amount.
In some states governments are seeking to deal with the cost-of-living crisis by offering employees one-off cost of living payments claiming they are the same as pay rises, but we know they aren’t.
In Western Australia the McGowan government has put an offer of 3% per annum to its public sector for a 2-year agreement with a one-off cost of living payment of $2,500. In their media release the government presented this as being ‘the equivalent of a 7.5% increase’ for worker on $55,322. But that’s not true.
If you received a 7.5% wage rise, then your wages would permanently rise by 7.5% and any future increases would be on that higher salary. With McGowan’s offer your wages are only rising by 3%, that’s the increase that will carry forward to future years and, with WA CPI rising by 7%, your salary will have fallen in real terms by 4%.
And if CPI is above 3% in 2023, as every economist is forecasting, then your salary will fall in real terms in the second year too.
Based on the example used by the McGowen government $55,322 starting salary) here is how a one-off payment compares to a wage rise:
|Year||3% per annum plus one-off $2,500 payment||7.5% in 2022 and 3% in 2023|
|2022||Gross earnings – $59,481||Gross earnings – $59,471|
|2023||Gross earnings – $58,691||Gross earnings – $61,255|
The one-off payment is a wage increase you have forgone, forever. Increases in the prices you pay are not one-off so increases in your wages shouldn’t be one-off either.
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