Tuesday, 21 February 2023

Wages policy

Sam HIBBINS (Prahran) (14:15): My question is to the Treasurer. Treasurer, over the past year inflation has risen to 7.8 per cent, the cost of food has increased by over 9 per cent and the cost of housing has increased by over 10 per cent, yet the government’s public sector wages policy is stuck at just 1.5 per cent, capping wage increases to below inflation. Treasurer, when Victorians are struggling with the cost of living – struggling to pay the rent, struggling to put food on the table – why is it the government’s official policy to keep wages low?

Tim PALLAS (Werribee – Treasurer, Minister for Industrial Relations, Minister for Trade and Investment) (14:16): I thank the member for Prahran for his question. I feel like I should answer this question both as the Treasurer and the Minister for Industrial Relations because our workforce has done an exceptional job throughout the pandemic. They have actually kept Victorians safe. This government consistently works with our workforce to ensure not only that they get quality conditions but, where the government has the capacity, they get appropriate wages. We respect their collective bargaining rights.

It is true, member for Prahran, that whilst this government has during the course of the pandemic had to make enormous contributions towards the wellbeing of the community and to increase the public sector staff who care for the community, we have done that quite expressly and we have done it with the view that we must keep the community safe. Not only that, but we must keep that workforce safe by ensuring that they have adequate resources to do the job that they need to. That has meant an enormous investment in our health and our caring communities throughout the pandemic.

It is true, however, that our wages policy will require evaluation as a consequence of the peaking level of inflation. I would, however, make the point that we are not simply going to get caught in a process of matching whatever CPI is, otherwise we will get caught in a wage-price spiral. Nonetheless I think it is relevant and appropriate that we recognise that there are pressures upon the workforce that government has an obligation to make a distinct and substantial effort towards addressing. We will address that through the efficient deployment of our resources and our capacity, and that deployment of our resources and capacity may well include recognising that the workforce is adequately resourced in terms of staffing and is also supported, where we have the capacity, with an appropriate wage commitment.

Whilst our wages policy is substantively lower than the inflation rate at the moment, and indeed the Reserve Bank governor has picked out the state of Victoria for having a headline low inflation rate, do not make the mistake that the headline cap on wages is where it stops – that is the CPI adjustment. There are also adjustments for skill, sign-on payments and increments that attach across the public sector. If you simply go to the policy headline number, you will not get an accurate reflection of the contribution that this government has been making towards the welfare of our staff and to ensuring that where we can we assist them in the challenges they confront.

Sam HIBBINS (Prahran) (14:19): Low wages are affecting workers right across society. The Treasurer has indicated that there will be a review and the wage cap will be assessed. But does the Treasurer accept that a low public sector wage cap now signals to the private sector that they can keep wages low for their workers too?

Tim PALLAS (Werribee – Treasurer, Minister for Industrial Relations, Minister for Trade and Investment) (14:19): I thank the member for Prahran for his supplementary question, but he has extracted an enormous concession from me, one that I have been banging on about for the last 12 months. In the lead-up to the last election I made it clear that the government would review its wages policy and that policy would go up as a consequence of the peaking level of CPI. But I am not going to incorporate a wages policy that assumes we get into a wage-price spiral; we will build a foundation for value for money for the taxpayer and also respect and support for our workers.