New NSW Government Under Pressure On Public Sector Wage Rises

Australia’s most populous state, New South Wales, went to the polls on the weekend and after 12 years the opposition Labor party is set to govern the state. Following the election result, unions have been quick to call for higher wages and for negotiations to start as soon as the new cabinet is sworn in. Economists are warning that wage increases should be targeted at areas with skill shortages and that the new government needs to be careful of a wage-price spiral.

• Counting continues today but currently Labor has 45 seats compared to the Coalition on 27. They need 2 more seats to be able to form a majority government and are currently ahead in 4 of the 8 seats which are still too close to call. The two-party preferred vote is currently at 54.3% to 45.7%.
• Under the previous government, there was a 3% pay cap for the NSW public sector. ABS wages data has shown that pay growth in the public sector has been behind that of the private sector nationally since Q4 2020, as multi-year deals have meant that public pay has been less flexible in responding to inflation and labour shortages.
• The Parliamentary Budget Office estimated that a 1% increase in NSW public sector wages would cost $2.6bn. Premier-elect Minns has said that any rise in wages will be funded through productivity gains and budget savings.
• Now that not only the federal government is run by Labor but also all mainland states, there are likely to be further industrial relations changes, including to how labour is hired and minimum standards for road transport workers, following on from those that legislated multi-employer bargaining in 2022.
  - The Australian