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Public Sector Wage Cap Must Go

Public Sector Wage Cap Must Go

The Reserve Bank Governor has endorsed a longstanding argument of NSW unions against the public sector wage cap, highlighting its impact on broader wage growth.

In testimony to a parliamentary committee today, Philip Lowe said:

“Wage caps in the public sector are cementing low wage norms across the country. The norm is 2 to 2.5 per cent and that is partly because of the decisions taken by state governments.”

It follows comments earlier in the week in the RBA statement on monetary policy when the RBA governor said:

“Caps on wages growth are also affecting public-sector pay outcomes across the country. A further gradual lift in wages growth would be a welcome development.”

Unions NSW Secretary Mark Morey called on NSW Treasurer Dominic Perrottet to heed the RBA’s warning.

“Dominic Perrottet needs to listen to Philip Lowe and lift the public sector wage cap,” Mr Morey said. “Weak wage growth is Australia’s most pressing economic challenge. The NSW Government is the nation’s largest employer and has a pivotal role in breathing life into our economy.

“With more than 400,000 employees across a huge diversity of occupations in every corner of the state, no employer is better placed to get the ball rolling on wages.

“Growth in public sector wages spills over to the private sector. Industries such as health, caring, education and construction straddle public and private sectors.

“Dominic Perrottet must not allow his surplus fetish to come ahead of the nation’s broader economic interests. It’s time to abandon the wage cap, stimulate wages and let the economy grow.”

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