Union ire as wage bill surge reined in through public sector cutbacks

    by: Annabel Hepworth, National business correspondent
    From: The Australian
    December 31, 2012


UNIONS have vowed to launch an aggressive election-year campaign over plans by governments to rein in the costs of employing public servants as they try to repair their deteriorating budgets.    

Federal, state and territory governments expect the combined bill for employing their workers will grow by 10 per cent over the four years to 2015-16, in stark contrast to the runaway growth of the previous four years of 31.2 per cent.

The figures, revealed in analysis by The Australian, set up another flashpoint in industrial relations, which is expected to be a key battleground for the federal election due in the second half of next year.

The analysis shows that the cost of employing federal, state and territory frontline workers and bureaucrats is expected to grow by $10.7 billion to $118.4bn over the four years from 2011-12 to 2015-16. In the previous four years, the wages bill ballooned by $25.6bn to $107.6bn.


The federal government's employee costs surged from $18.69bn in 2007-08 - the year Howard government treasurer Peter Costello delivered his last budget - to $24.71bn in 2011-12, a rise of 32.23 per cent.

But the mid-year update shows the Gillard government plans on reining this in, with the bill to grow much more modestly to $25.78bn in 2015-16, a 4.33 per cent rise over four years.

On top of union campaigns for guaranteed penalty rates and for casual workers to have access to portable, employer-funded paid leave, the Community and Public Sector Union plans to escalate a "cuts hurt" campaign over existing public service cutbacks and plans by Tony Abbott to take the axe to the federal bureaucracy if elected next year.    

The move sets up a clash with business groups, which have slammed the growth in public sector spending as unsustainable and insist that it must be curbed.

The CPSU is demanding there not be any cuts to federal public sector staffing and that the efficiency dividend - yearly cuts to the funding of certain federal agencies - be abolished or at least slashed to 1.25 per cent.

The dividend is 4 per cent this financial year because an additional 2.5 per cent impost applies.

Finance Minister Penny Wong's office said last night that, since coming to power, Labor had achieved more than $13bn in public sector savings, including in travel, hospitality and IT.

"We have very clearly prioritised non-staffing savings, unlike what we've seen in Coalition states and what Australians can expect from an Abbott government," a spokeswoman said.    

She said the 2.5 per cent top-up remained a one-off, despite Wayne Swan's concession that the government would not be able to deliver its promised surplus this year and funding commitments including the Gonski education reforms and the National Disability Insurance Scheme.

In a new submission to the 2013-14 commonwealth budget process, the CPSU insists no more jobs should be shed and that, beyond the current budget cycle, the government should have a "proper and serious consideration of the tax base".

The union has vowed that as its campaign ramps up next year, its delegates will be taking these concerns directly to communities, politicians and the media.

ACTU secretary Dave Oliver backed the CPSU campaign, saying the peak body's concerns extended beyond the federal cuts.

"It is a significant issue that the movement collectively will be looking at," Mr Oliver said. "We are particularly concerned in an election year that, if there is a change of government, what the Coalition will do. They've already been on the record saying that they will cut fairly deeply.

"We are also concerned in South Australia . . . the opposition over there have been making noises that if they are successful in winning the state election, there will be some significant cuts there. The movement is collectively concerned about this push."   

Conservative state governments are all shedding jobs as part of austerity measures.    

Queensland's government is purging up to 14,000 public servants and unions fear another round of cuts when the final report from Mr Costello's commission of audit is released next year; Victoria is axing more than 3500; Western Australia has imposed a freeze on public service staff levels; and NSW wants to cut employee costs equivalent to 10,000 public sector positions, plus it has 5000 redundancies on top of this.   

South Australia's Labor government has promised to cut about 5000 positions by June 2016 to return the budget to surplus, while the Liberal opposition has said it would cut about 20,000 public sector jobs if elected in 2014.

Queensland's public sector union secretary Alex Scott has said he will use a Senate inquiry into the sackings of state public servants to push the concerns of his members.

"We think we want to try to maximise the pressure on federal politicians in the lead-up to 2013 because we find that politicians are most likely to be interested in listening to the community just before an election rather than just after it," he said.    

CPSU acting national secretary Louise Persse said the demands on the public sector were increasing as the population was ageing and growing. "

The liberals are a very strange lot, they whinge about people being unemployed on one hand.  Yet on the other hand create unemployment.  Has anyone ever thought just where these public servants are going to go.    

Where might that be?, Centrelink.    

progressiveslol wrote on Dec 31^st, 2012 at 7:07am:



You don't want to pay more taxes but you are prepare to pay much more for services and infrastructure the was free before the government sold or got private companies to built it.

Howard era taxation and personal debt levels will fix everyone's problem..Im sure the neo cons dont mind getting back to record levels of taxation and personal debt again.
Cmon..you know you love it when a conservative govt screws you for every penny and buries you under a mountain of household debt