O'Farrell to cut salaries

Government to shirk its super obligations.

Rod Brown 
Acting Assistant General Secretary (Research and Industrial) 

The NSW Government has announced that it intends to discount the 2.5 per cent salary cap that applies to all NSW public sector employees by the 0.25 per cent increase to the superannuation guarantee that comes into effect from July 1, 2013.

The superannuation guarantee is the minimum, employer obligation to superannuation. The Government’s proposal would have employees paying for the employer’s obligation to super.

The effect of the NSW Government’s announcement would be to limit salary increases to 2.25 per cent per year from July in 2013 and 2014 and just two per cent per annum thereafter.

It is worth noting that inflation in the year to the end of March was 2.5 per cent across Australia and 2.8 per cent for Sydney — CPI is calculated by the Australian Bureau of Statistics on capital city prices.

Commonwealth legislation currently provides for a further 0.25 per cent increase in the superannuation guarantee on July 1, 2014 and then 0.50 per cent increases each July 1 until 2019 when the superannuation guarantee will reach 12 per cent, up from the current nine per cent.

The proposal would also discount the salary used to determine retirement benefits of those in the older schemes (State Superannuation Scheme and State Authorities Superannuation Scheme) to pay for the improvement in superannuation of those members who receive only the superannuation guarantee (usually First State Super members). So not only will it reduce the pay of State Superannuation Scheme and State Authorities Superannuation Scheme members, without providing an increase in their superannuation, it will also reduce their benefits at the point of retirement.

Federation President Maurie Mulheron, along with representatives of NSW public sector unions and Unions NSW, met with NSW Treasurer Mike Baird on May 16 to express anger and concern at the NSW Government’s attempt to discount salaries.

The Public Service Association (PSA) has five award matters currently listed before the NSW Industrial Relations Commission (IRC) seeking undiscounted increases of 2.5 per cent for its members from July 1. Anticipating the PSA’s argument, the NSW Government has referred its discounting proposal to the Full Bench of the IRC to rule whether the Government has the legal authority to discount salaries by the superannuation increase. Any decision may be appealed to the Supreme Court.

Federation does not currently have any award matters before the IRC as our awards do not expire until the end of the year. However, because of its implications to members, Federation will be a party to the matter, with Unions NSW intervening in the PSA case on behalf of many public sector unions including Federation.

Federation is not relying on the outcome of the legal case. Unions NSW is preparing information, flyers, posters and resolutions to be put to all public sector workers in a developing campaign. Federation will distribute these campaign materials and look to joint and coordinated action with other NSW public sector unions.