By CHRISTINE LAI
Nurses and midwives in NSW have lost around $80,000 each due to the public sector wage cap which has suppressed their pay for a decade.
According to a report titled, “The Cumulative Costs of Wage Caps for Essential Service Workers in NSW”, economist Dr Jim Stanford detailed findings which show that public sector nurses and midwives will suffer a cumulative loss of $120 000 in pay by the years 2023-24.
The superannuation balance of nurses and midwives will also be worse by $12 500.
In the new report, Centre for Future Work Economist and Director Jim Stanford investigated the cost of the “decade-long wage suppression for nurses, midwives and other public sector workers in NSW.”
Dr Stanford condemned the NSW government’s ‘arbitrary’ decade-long wage suppression in state-funded public services, including areas of health care, education, public administration, and emergency services, among others.
The report on the impact of wage suppression describes the pay caps as initially “justified as a deficit-reduction measure” before being later “tied to inflation trends”.
However, Dr Stanford rejected both arguments by the government, explaining that there have been state surpluses across the past few years since the cap’s introduction and the accelerated inflation which runs “more than twice as fast as allowed compensation gains.”
“It is clear the NSW government relies upon harsh public sector pay restrictions as a matter of political and fiscal convenience, without negotiation or consideration of normal wage determinants such as rising cost of living, productivity, or wage comparators,” said Dr Stanford.
“The consequences are severe for public sector nurses and midwives and get worse over time because the sustained pay caps have a cumulating effect. Not only are wage gains in any particular year lower than they would be under normal circumstances, but the base level of pay falls further and further behind where they would be otherwise”, he added.
Wage suppression and losses foreseen for 2023-24
For three consecutive years, the NSW pay caps have reduced wage growth well below inflation, resulting in a significant erosion of real wages for nurses, midwives, and other public sector workers.
In the report, Dr Stanford outlined that public sector workers will see “real purchasing power decline by 7.5% by end 2023-24”, on the basis of the Reserve Bank of Australia (RBA) inflation forecasts and the NSW government’s stated cap. This would mean a full-time experienced nurse or midwife would see an equivalent loss of $6750 in pay.
General Secretary of the NSW Nurses and Midwives’ Association (NSWNMA), Shaye Candish, said the NSW government’s wage restrictions would make it difficult for workers to retire in the future.
“According to the report, an experienced female nurse or midwife who is single and renting will fall more than 50 per cent below the comfortable retirement threshold.
Nurses and midwives across NSW will be unable to retire in dignity, the longer these cruel wage caps remain in place. This is not a responsible policy that instils confidence in building the future nursing and midwifery workforce we desperately need for our state”, Candish said.
The report states that women are especially vulnerable from the NSW wage policies as their superannuation balances are consistently lower than men’s, due to lower earnings and more career interruptions to care for family members.
Additionally, as the lifespan of women is typically longer than men, the need for a larger superannuation balance to generate the same sustainable retirement income as men is vital.
NSW government offers one-time ‘thank-you’ payment to nurses
The government announced a one-off “thank-you” payment of $3000 for NSW Health permanent employees in recognition of their work during the COVID-19 pandemic in June.
However NSWNMA Acting Assistant General Secretary, Michael Whaites, said the one-off ‘thank you’ payment would not help with ongoing cost of living pressures in addition to the real pay cut of the 3 per cent wages policy.
“The ‘thank you’ payment does very little to recognise the sacrifices and moral injury our members endured throughout the pandemic, which we all know extends across the entire health system, not just public hospitals,” said Mr Whaites.
Dr Stanford condemned the ongoing wage cap which “suppresses normal collective bargaining rights” and is set to create a “growing gap over time between compensation for public sector workers and other employees.”
In the ongoing demand for mandatory nurse-to-patient ratios, a fix for the staffing crisis and better pay and working conditions, nurses have gone on strike four times this year.
