Queensland public sector pay rise is fiscally responsible

Tuesday 1 December, 2015 | By: Darrell Giles | Tags: public sector, wage increase, State Budget;

The Chamber of Commerce and Industry Queensland (CCIQ) says the State Government’s offer to increase public sector wages by 2.5 per cent is reasonable for public servants and fiscally responsible for taxpayers.

Treasurer Curtis Pitt confirmed public sector employees will receive annual increments of 2.5 per cent from 1 September 2015, 2.5 per cent from 1 September 2016 and 2.5 per cent from 1 September 2017.  The offer will also see workers receive a one-off $1300 payment in lieu of back pay.

CCIQ Director of Advocacy Nick Behrens said the proposed increase was in line with forecasts for Queensland’s wage price index and consumer price index, both measured by the Australian Bureau of Statistics.

“The Queensland business community should be comfortable with the offer as it is not out of step with what is occurring in the private sector,” he said.

public service graphic

“In recent years Queensland public sector wage outcomes have been largely in line with the private sector, which is a trend CCIQ is keen to continue.

“The proposed increases align with this parity concept and are fiscally responsible.”

Mr Behrens said the one-off $1300 payment – costing $62.4 million – was also reasonable, provided it offset back pay.

“However, any increase should also be coupled with efforts to deliver greater efficiency and flexibility within the public service,” he said.

“The Queensland business community has a strong interests in these wage negotiations as it contributes at least $8.1 billion to the State Government through payroll tax, land tax, business stamp duties and motor vehicle rego – or 65 per cent of total taxation revenue.”

Mr Behrens said about 44 per cent of the state’s operating expenses were apportioned as employee or superannuation expenses.

“The nexus between businesses taxes and the State Budget’s employee expenditure is strong. 

“What will be crucial is what happens to head count.”

The most recent Queensland Public Sector Workforce Quarterly Report confirmed there had been an increase of 1939 full-time equivalent employees in the Queensland Public Sector in the June quarter 2015.

This represented an increase of 0.96 per cent with the QPS workforce currently at 203,348.

The most recent State Budget forecast an operating surplus of $1.2 billion to be delivered in 2015-16. 

“It is important that this result not be compromised by wage outcomes or headcount increases,” Mr Behrens said.

“CCIQ is supportive of the relatively lean 2.8 per cent growth in expenditure for 2015-16, which confirms fiscal discipline on the Treasurer’s behalf. This will be the measure that the business community judges the Palaszczuk Government on.

“The proposed wage increase is consistent with the State Budget – but the proof will come later this month when we see if the government is on track with the release of the Treasurer’s Mid-Year Fiscal and Economic Review.”

In the following graph, CCIQ noted that the 2.2 per cent rise offered by the previous LNP government amounted to only $10.5 million more that Labor's 2.5 per cent offer.

The $1300 one-off payment will cost an extra $62.4 million. But it is the increasing head count in the public service that makes a significant difference: an additional 1939 staff amounts to an extra $155 million in wages.

public wages




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