Premier Mark McGowan’s concession to public sector workers came as a surprise on Sunday morning.
For months, the Premier had defended his 2.75 per cent pay offer, but a concession was widely expected at some point, given the unions were showing no sign of budging and strike action looming later this month.
On the table now is a 6 per cent pay rise over two years, plus a $2,500 one-off payment.
It’s far less than what the unions had been asking for, with some hoping for a raise closer to the headline inflation rate of 7.4 per cent.
Even if unions do accept the offer, it’s unlikely to be the last we hear from them.
There is frustration the offer comes with a one-off top-up this year, instead of building in longer-term increases.
Mr McGowan claims the $2,500 payment was to reflect current pressures, which he expected to ease over the next year.
“We have a temporary spike in inflation, we’re giving every worker in the public sector across the state a significant boost in pay this year,” Mr McGowan told a press conference this morning.
“It’s designed to make sure we reflect cost of living pressures and properly reward the workforce.”
It also gives the government the added bonus of greater flexibility if conditions shift over the next two years.
Avoiding the failures of the past
But unions contend it just leaves workers’ pay packets drifting further backward, especially with an eye-watering budget surplus.
“We believe that to keep up with the cost-of-living year-on-year, that you need to actually have pay increases that compound on each other,” was the view of public sector union boss Rikki Hendon.
They would like to see an offer like Queensland, which is headed for a $1 billion deficit this year, where some workers will get four per cent raises a year for the first two years, then three per cent in the third, with the potential for a one-off cost of living adjustment.
Mr McGowan’s reason for not going down that path was that the adjustment would throw off budgeting.
“If you don’t know what you’re going to be spending, you can’t budget properly and it’s quite dangerous for the state’s finances,” he said.
The Premier also may want to avoid falling into the trap former premier Colin Barnett found himself in when anchoring high public sector wages in a labour shortage caused his budget to move into the red, forcing him to borrow money to pay for recurrent expenditure.
But the wages backward drift will add pressure to the state’s skills crisis, unions have argued, with workers leaving for higher pay in the private sector or in other states.
Mr McGowan has already admitted there was little the government could do to compete with the private sector, especially in a state where there are more vacancies than people looking for work.
But some argue there is greater flexibility in competing for talent with other states – with the Australian Nurses Federation among those warning WA is falling behind.
“It still leaves West Australian nurses and midwives as the second-lowest paid in the country, without transparent regulation of their workloads,” the union’s Mark Olson said.
It comes as the state aims to attract an extra 349 junior doctors, 102 midwives and 82 theatre nurses.
Surprise deal fails to quell irritation
What also irks the unions is how the announcement was made, being told of the detail the previous night. They had frequently expressed frustration negotiations were taking place without decision-makers in the room.
The Premier was adamant it was the right way to handle the situation.
“These are decisions of government that we advise the public of as well, so I think we provided the appropriate amount of information before the announcement,” he said.
This morning, he continued to deflect criticism of the way negotiations had been handled.
“The government has listened to what the unions have had to say, they’ve been very prominent publicly about these issues,” he said.
“We also know inflation has climbed since we put the … original policy in place back earlier this year.
“We’ve considered all of these issues, looked at the policies in place in other states and come up with a more than fair offer.”
That failed to convince some.
“This isn’t genuine bargaining,” the head of the state’s peak union body, Owen Whittle, said.
“We’re not in the room bargaining these pay increases, government is just dropping this on us.”
The test of whether Mr McGowan’s offer will suffice will lie ultimately with union members, who will decide if the new pay offer is accepted, or if they push for more and go ahead with a strike planned for August 17.
For many, a $2,500 bonus would make a big difference right now, given the pressure they are under.
“I think a lot of people would be quite excited by the fact they’ll get that money directly into their bank account immediately,” Mr McGowan said.
If accepted, the argument could start up all over again this time next year. But at the very least, the government has the prospect of calming frustrated public sector workers for the moment.
