MEDIA RELEASE: SA PUBLIC SECTOR WAGE DECLINE ‘PAINFUL AND EXTREME’ DESPITE RECORD STATE ECONOMIC GROWTH, SAYS NEW REPORT

PSA MEDIA RELEASE. SA public sector wage decline painful and extreme despite record state economic growth says new report - Monday 9 December 2024.pdf

South Australian public sector wages have fallen dramatically in real terms – despite South Australia’s economy outperforming other Australian states, a new report from The Australia Institute reveals.

The report – entitled Economic Prosperity, Public Sector Restraint and commissioned by the Public Service Association of SA (PSA) – shows that from 2018-19 to 2023-24 the South Australian economy grew cumulatively by almost 15% and faster than any other state due to government and household consumption and rapidly increasing private business investment.

However, from late 2021 onwards, South Australian public servants saw their wages severely eroded due to harsh wage restraint by the government and inflation fuelled by global supply shortages, energy price shocks and corporate profit-taking.

The real purchasing power of public sector wages in South Australia has declined between 8% and 10% (depending on the measure), and is the worst of any sector, in any state except Western Australia, which ties with South Australia at bottom position.

South Australia’s lowest-paid public sector workers have fared worst of all, leading to worse inequality, the report has found.

SA GOVERNMENT CAN WELL AFFORD TO PAY A DECENT WAGE RISE

The PSA, the union representing and advocating for 40,000 of the state’s public sector workers, says the Economic Prosperity, Public Sector Restraint report supports what it has repeatedly told the government all year – that South Australian public servants are taking home far less income today than they did before the pandemic, for doing the same work.

“It is unconscionable that despite our strong economy and positive outlook from Treasury, public sector wages have gone backwards,” said PSA General Secretary, Natasha Brown.

The report also shows that historically low unemployment levels and better wages in the private sector are making the public sector less attractive as an employer.

“The government must offer more competitive wages and conditions to attract and retain staff to keep our public service strong,” Natasha Brown said.

“If they do not, the problem will only get worse – and will become even harder to fix in the future.”

The Australia Institute’s deep analysis of state government income and expenditure reveals a strong, stable economy. 

However, strong economic growth has not translated into improved spending on public services and assets.

Data shows that state-level spending is smaller relative to the economy than any other state – proving that the state government can well afford to give its public sector workers a decent pay rise.

The state’s consistent economic performance generates strong revenue growth – with growth projected to continue in coming years and several indicators suggesting the government has untapped fiscal resources available to boost revenue further. 

GOVERNMENT’S “INITIAL PROPOSITION” HIGHLY INSULTING

The PSA is currently in enterprise agreement negotiations with the state government.

Natasha Brown points out that the government’s “initial proposition” in the negotiations – a wage rise of up to 3%, and then not until August 2025, is highly insulting – particularly in light of the government’s strong economic position.

“Declines in real wages among the public sector are contributing to significant financial stress in our members’ households,” Natasha Brown said.

“Some members are having to choose between paying their rent or mortgage and paying other bills. Others are working long hours of overtime to make up their wages – leaving them feeling exhausted, degraded and unvalued.”

Natasha Brown says the government must provide its public sector workers with wages that meet the cost of living and reflect the value of the work they do.

“Our members serve all South Australians, often under very difficult circumstances, with staff in Health and other diverse agencies such as corrections, child protection, housing and the CFS regularly facing extremely challenging events in their day-to-day work,” she said.

“Public sector workers, who help keep us safe and make our lives comfortable, deserve wage justice – and they deserve it now.”

QUOTES ATTRIBUTABLE TO NATASHA BROWN, PSA GENERAL SECRETARY

“Amid a booming economy, our public sector workers have watched their wages go backwards in real terms by up to 10%, with lower-paid workers faring worst of all. This is shocking and completely unacceptable.”

“Despite helping to make South Australia one of the safest and most livable places in the world to be during the pandemic – South Australia’s public sector workers have experienced a severe decline in living standards and significant financial hardship. Achieving wage justice is our number one priority in the enterprise agreement negotiations that are currently underway.”

“South Australia experienced the strongest economic growth of any state after the pandemic – yet over the same period the wages of public sector workers have been steadily eroded by inflation and government wage restraint.”

“Keeping wages low is not the way to retain hard-working staff or attract workers to the public service. It undermines the essential services that the public sector provide, and means that the public suffer too as a result.”

“The state government can well afford to give its public sector a wage rise that redresses the current imbalance. It also has a moral responsibility to do so and the state’s economy will be stronger for it.”

“Strong wage growth will make the public sector more competitive, helping to attract and retain the best and brightest. This will lead to a stronger public service, a stronger economy, and a better state for all South Australians to enjoy.”

For media enquiries, please contact PSA Communications Officer Louise McCabe
 on 0409 770 344

For comments from the report’s author, Jack Thrower, please contact Glenn Connley, Senior Media Adviser at the Australia Institute on 0477 381 475