public sector wage freeze

An evidence-based approach is just as important for economic recovery after COVID-19 as it was in the health response to the pandemic.

This year, nurses have been confronted with the monumental challenge of two back-to-back crises of epic proportions – both with daunting health consequences.

Bush fires of unprecedented size and ferocity, and the biggest global pandemic since 1913, have put our public health system under enormous pressure in a way that could barely have been imagined six months ago.

Nurses have risen to these challenges magnificently. These crises came out of the blue and our level of preparedness was underwhelming, yet Australia has coped relatively well, in no small part because of our robust, universal public health system underpinned by highly professional and dedicated nursing and midwifery workforces.

The sacrifice of nurses has been inspiring. COVID-19 has shown that if you need a steady hand in a crisis, nurses always deliver.

You would think the government’s response to such a stellar performance would be one of appreciation and a commitment to strengthen our public health system and to lift the morale and wellbeing of its nursing workforce.

Not so. The Berejiklian government’s decision to freeze public sector wages, including those of nurses and midwives, is not only disappointing, it’s exasperating. As one commentator has said, it is “morally questionable and a major economic mistake”.

Austerity policies such as the cost cutting of public services and the freezing of wages – the classic neo-liberal strategy – were a disaster as a response to the last great economic shock – the Global Financial Crisis.

The bushfires and now COVID-19 show the false economies of the neo-liberal model that has been imposed on us for decades.

It is an economic model of penny pinching, neglect, a failure to invest in vital services, of insufficient planning and a lack of preparedness – all driven by a narrow, sectarian vision which serves corporate interests above the interests of society.

It is an economic model which has seen domestic manufacturing wither and has left us vulnerable to overseas production and supply of PPE and vaccines and in an unedifying competition for these resources in a global market.

The economic hit from this failed vision – which places blind faith in the market at the heart of all governance – is incalculable. It will no longer do.

Invest in people

Spending public money on vital services like health, including the workforce that sustains these services, needs to be seen as an investment not a cost. The cost, as we are now painfully aware, comes from not doing it.

Cheerleaders for the corporate sector are advocating something completely different.

“The COVID-19 shock opens the political door for a policy reset that the Morrison government must now commit to fully walking through,” the Australian Financial Review recently editorialised.

That reset, it continued, included tackling “state-wide, rigid, union-negotiated industrial award agreements for public hospital doctors, nurses and other operational staff”.

This is not a reset. It is more of the same, failed economic policies of recent decades. Make no mistake a freeze is a real cut to wages and it will flow to all our members in the private and aged care sectors let alone the rest of the workforce by sheer market forces.

There is another way, which has even been advocated by heavyweight institutions like the IMF and the Reserve Bank of Australia. Their policy prescriptions for higher wages to bolster sluggish economic growth have been based on empirical analyses of the austerity measures imposed in the wake of the GFC. These measures  were implemented as soon as the Liberal–Nationals won government from the ALP.

Both the federal government and the NSW government are to be applauded for listening to and following the advice of health experts in handling the coronavirus pandemic. It is a welcome change to the denial of science when it comes to climate change.

It’s now time for them to be brave in the economic realm and to abandon the discredited policies of the past and to listen to the economic evidence that has been growing since the GFC erupted a decade ago.

They could start by abandoning their ill-considered wage freeze.