Robbed at work, robbed in retirement
The Perrottet government’s wage caps have so far cost NSW nurses $80,000 each, left them exposed to an insecure retirement and damaged the national economy, according to a damning new report.
A new report into the impact of the NSW government’s wage caps since their introduction in 2012, shows public sector nurses and midwives will each suffer a cumulative loss of $120,000 in pay by 2023–24, while their superannuation balances will be a further $12,500 worse off.
The report was written by Dr Jim Stanford, economist and director of the Centre for Future Work at the Australia Institute.
“By the 2021 to 2022 financial year, wages for an experienced nurse/midwife working full-time were $335 lower per week – or about $17,500 for the year – as a result of these pay caps in place since 2012,” said Dr Stanford.
“On a cumulative basis, this wage suppression amounts to a combined loss of $80,000 in wages since the pay caps were first imposed.”
The impact of the wage caps has become especially acute with the steep rise in inflation, the report said.
“Real wages for nurses and midwives have already fallen over 3 per cent in the last two years, reducing their real purchasing power by $3000 per year per employee,” it said.
The initial justification for the wage caps was to reduce the deficits incurred by the government after the Global Financial Crisis of 2008–09.
The Australia Institute research shows those deficits were quickly replaced by large budget surpluses – which ran for six consecutive years from 2013–14 to 2018–19 – yet the wage caps were retained.
“It is clear the NSW Government relies upon harsh public sector pay restrictions as a matter of political and fiscal convenience, without negotiation or consideration of normal wage determinants such as rising cost of living, productivity, or wage comparators,” said Dr Stanford.
The pay caps have “contributed to falling real wages, made it more difficult to attract workers to vital service roles (in health care, education, and others), and has undermined wage growth across the broader labour market”.
“(They impose) an intolerable and unfair burden on the essential service workers whose dedication and skill are critical to helping NSW residents through the continuing COVID-19 pandemic.”
“Arbitrary pay caps are also a clear violation of workers’ basic collective bargaining rights. They should be abandoned on both economic and democratic grounds.”
NSWNMA General Secretary, Shaye Candish, said the NSW Government’s wages policy was bad for nurses and midwives now, and into the future.
“NSW is the second-worst-paying state in Australia because of this policy, making it near impossible to attract and retain staff in such a tight labour market. It’s clearly a bad policy for nurses and midwives, but the implications for regional communities and the health sector overall are just as dire,” Shaye said.
By the 2021-22 financial year, wages for an experienced nurse/ midwife like Cj Porter from Campbelltown Hospital, working full-time, were $335 lower per week (or about $17,500 for the year) as a result of pay caps in place since 2012.
Read the report – Cumulative Cost of NSW Public Sector Pay Caps is Enormous
Key points of the report
In the 10 years since the pay caps were imposed, pay has grown at an average annual rate of just 2.19 per cent across all classifications.
In contrast, over the twenty years prior to the imposition of the cap, average wages grew at almost 4 per cent per year.
On a cumulative basis, wage suppression amounts to a combined loss of $80,000 in wages since the pay caps were first imposed.
If the pay caps are retained, those losses will cumulate further over the next two financial years: to $390 per week in lost wages and a cumulative loss of $120,000 per nurse by 2023-24.