Victorian government cuts public sector wages

April 4, 2009

The Victorian ALP state government has cynically tried to dress up its attack on public sector workers as an attempt to save jobs. Public sector workers will have their wage rises slashed from 3.25% to 2.5% annually.

"This is belt tightening and it is appropriate in the current global economic climate. It is action we need to take to ensure we can protect jobs in Victoria," state treasurer John Lenders announced on March 27.

The new wages policy will not apply to existing enterprise bargaining agreements but will come into effect on May 4 for all agreements that haven't been finalised by that date. About 200,000 workers will be affected.

With inflation running at 3.7%, the Victorian state government's new policy of a 2.5% cap on wage rises will amount to a cut in real wages. Furthermore, the average inflation figure doesn't reflect the much higher inflation rise for essentials such as food, petrol or childcare, all of which have risen far higher than 3.7%.

United Firefighters Union Victoria branch secretary Peter Marshall told the March 27 Age that the global economic crisis was being used to "rip off members".

Many firefighters, who had to battle Victoria's horrific bushfires that left nearly 200 people dead, will be affected by the cuts.

"Not only do we have severe reservations about what the state government is proposing but we say that it is disrespectful of the efforts that the firefighters have made during Australia's worst bushfire campaign," he said.

Karen Batt, the Community and Public Sector Union-SPSF Victoria branch secretary, told ABC's Stateline program on March 27 that the announcement gives an ultimatum of a just a few weeks for her union. The union needs to finalise a complex enterprise bargaining agreement, covering 32,000 workers across 450 occupations, otherwise the new wage policy will come into effect.

Batt also told the ABC that the state government refused to give any guarantee that there would not be job losses in the public service.

"Reducing the spending capacity and wages of your workforce at a time of economic crisis seems at odds with the federal government's stimulus policies and will impact on jobs throughout the wider Victorian community", Batt said in a March 27 statement.

It is unclear if unions will take industrial action to protest the wage cuts.

There is no doubt the Victorian government's latest attack on wages under the guise of "saving jobs" will be seen as a green light for private industry to follow suit to protect its profits.

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