PAY RISE POLICY ANNOUNCED IN THE BUDGET

Treasurer Costa announced in the NSW Budget a policy of limiting pay rises to 2.5 percent per year.

This policy does not apply to the 4 percent pay rise due under the Public Sector Salaries Award. That rise will come through on schedule in July, i.e. in the first full pay period in July.

What will happen after that? The current award expires and we will seek to negotiate a new award by June 2008.

Costa's 2.5%?

That's the Government's starting point.

Last time we negotiated the Government's starting point was 3 percent per year - we got 4 percent per year for four years.

Something similar will happen in the next round of negotiations.

2.5 percent is below the inflation rate. That is not acceptable and simply unrealistic.

General Secretary John Cahill made these comments in one of many interviews on the subject:

"The 2.5% cap on pay increases is a "Treasury wish". It's an ambit claim by the employer. No one is going to settle for 2.5%."

"The government had a wage policy of 3% before. No one took notice of the 3%, so no one will take notice of 2.5% either".

He went on to say that the PSA might have to run the 2008 case in the NSW Industrial Relations Commission where the PSA will show there are increases in productivity across the public sector which will more than justify our wage claim.

We were well into an arbitrated case four years ago, before a negotiated settlement was reached.