PUBLIC SECTOR WAGES

Mr GRIFFITHS (Goyder) (14:52): My question is to the Minister for Industrial Relations—

An honourable member interjecting:

Mr GRIFFITHS: And he looks forward to it! What public sector enterprise agreements are coming up for negotiation, and how will he keep public sector wage demands at or below 2.5 per cent, when each of the past five annual wage increases negotiated under his government has been at or above 3.5 per cent?

The Hon. K.O. FOLEY (Port Adelaide—Deputy Premier, Treasurer, Minister for Industry and Trade, Minister for Federal/State Relations) (14:53): I will answer that, because it was a matter that was dealt with in the budget, and I have made a very strong position clear to public sector unions. Firstly, we have had very good wage outcomes, in terms of the recipients of those wage outcomes, during a period of strong economic and revenue growth. What I have said to the trade union movement—the public sector unions—is this. We have a savings requirement. In the fourth year of our savings schedule, it totals $350 million a year. We can do it in one of two ways. You can either take a wage increase in excess of 2.5 per cent, and you may take it right up to our contingency, and therefore we will have to get $350 million a year through saving efficiencies, which will equal job loss; or during this period of economic constraint and difficulties, you take a lower wage outcome—arguably 2.5 per cent.

If we could achieve it across the entire public sector, one would realise upwards of $290 million of those savings, on our estimates. But we are realistic; we know that will be very difficult. We are not saying that we will get 2.5 per cent. We are saying that we will do all we can to achieve 2.5 per cent, but we can really only do that with goodwill and cooperation from the unions involved.

I appeal to them to recognise the financial times that we are in and the state government's capacity to pay. We have an independent industrial relations commission, and every union is entitled, as the teachers are currently doing, to take the offer from the government and reject it and appeal to the independent umpire. We have no way of avoiding that if that was to be the end outcome. I think that would be very disappointing. The member should be careful taking advice from the member for Unley, particularly if it involves a document.

The government hopes for an outcome that can meet the objective of providing the budget with substantial savings, providing a real wage increase to employees, and ensuring that, all round, there is an adequate outcome. However, members should also remember that, in previous years when wages have gone up by a larger amount, they have also been through periods, I would suggest, when inflation may well have been higher, so you actually have to look at the real wage outcome. Because inflation is so low this year, and will be next year and for the forecast forward estimates period, we still think a 2.5 per cent wage outcome would provide anywhere between 1 per cent and 1.5 per cent real wage growth for those employees.

So, we are still in a time when we all know there are many employers who are freezing wages, cutting staff, cutting hours that people can work and reverting to three-day weeks, and we do not think, as the major employer in this state, that it is an unfair burden that we are asking the public sector workforce to bear. Ultimately, the outcome of that is in their hands. We would take a very firm line. We know what we have to offer and that will be it. We will not be going above it.