NSW Labor’s policy of productivity savings to pay for public sector wage increases could present a significant risk to the budget outlook, the Parliamentary Budget Office (PBO) warned today.
NSW Treasurer Matt Kean said Opposition leader Chris Minns’ claim that removing the wages cap won’t cost a cent isn’t worth the paper it’s written on.
“It is not possible to give public sector workers a pay rise without it impacting the Budget bottom line – the numbers simply don’t add up,” Mr Kean said.
“Our policy is very clear and shows public sector wages in NSW will grow by $1.5 billion from 2022-23 to 2023-24. They’re forecast to grow by $1.8 billion the following year. It is simply impossible to pay public sector workers more at a cost of zero dollars.
“We know that if public sector wages were tied to inflation like Labor has suggested, that would blow an $8.6 billion black hole through the Budget.”
The PBO today said there is a risk that productivity savings will not be identified which could pose a significant risk to the Budget outlook.
It warned that if wage growth exceeded the Labor Government’s target, there was a risk that service quality or staffing levels would be lowered.
Mr Kean said Chris Minns needs to come clean on his wages policy before voters head to the polls on Saturday.
“Chris Minns is either lying to workers or he’s lying to his union mates. The risk is clear that he could also be forced to either cut services or sack workers,” Mr Kean said.
“Public sector wages account for around 40 per cent of the total NSW Budget and the PBO is warning Labor’s wages policy risks the budget outlook at a time when we’re facing economic headwinds.
“If Chris Minns can’t do the math on his wages policy, he certainly can’t be trusted to manage the state’s $770 billion economy.”
In addition, they have cut more than $2 billion from Western Sydney’s WestInvest fund, which is already fully announced and allocated as government policy. This means Labor would have to cancel community, council or government projects.
“Chris Minns needs to explain today to the people of Blacktown, Blue Mountains, Burwood, Camden, Campbelltown, Canterbury-Bankstown, Cumberland, Fairfield, Hawkesbury, Liverpool, Parramatta, Penrith, The Hills, Strathfield and Wollondilly what projects he is cutting,” Mr Kean said.
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