Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister Assisting the Prime Minister for the Public Service, Senator Abetz. Can the minister update the Senate on the government's approach to wage negotiations for the Public Service, to be released tomorrow?

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

Thank you, Senator Bernardi, for the question. Bargaining for the new Public Service enterprise agreements will commence shortly. These new enterprise agreements will cover approximately 165,000 public servants in 114 agencies under a new bargaining framework, to be released tomorrow. This framework is designed to deliver a fair and reasonable outcome in an environment where the nation has been left its worst financial mess ever.

As a result of the $123 billion worth of prospective Labor deficits and $667 billion worth of gross Labor debt, there will be minimal capacity for wage increases. Public Service wages need to be affordable, sustainable and within community expectations. Taxpayers should receive the benefits of significant productivity gains and get value for money for any wage increase. Recently, I addressed the CPSU Governing Council. I invited them to be mindful that unsustainable wage rises will cost other public servants their jobs and that it would be particularly beneficial for both the Commonwealth and unions to manage expectations.

The very next day to when the devastating state of the nation's finances left by Labor were unveiled, the CPSU advised that they were lodging a 12 per cent claim. That is clearly unsustainable and out of touch with community expectations. I remind them of former Labor Treasurer Frank Crean's dictum:

… one man's pay rise is another man's job.

The CPSU's 12 per cent wage claim potentially jeopardises over another 10,000 Public Service jobs. I invite the CPSU to keep those facts in mind. (Time expired)

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Is the minister aware of suggestions that the government should fully supplement agencies for Public Service wage increases? Further, can the minister advise the Senate why the government cannot just give extra funding to Public Service agencies to pay for the 12 per cent pay rise being sought by the CPSU?

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

I thank Senator Bernardi for his continued interest in this matter. The additional cost of the 12 per cent wage rise would be around $1,500 million over three years. Two weeks ago, the CPSU's national secretary, Ms Flood, spoke to a parliamentary committee about the desirability of the CPSU's 12 per cent wage claim being fully supplemented—that is, money simply given to agencies. She acknowledged, however, that successive governments of all persuasions—both Liberal and Labor—have chosen not to do this.

This would mean that the extra $1.5 billion worth of wage increases would simply go on the national credit card. From our point of view, we simply cannot keep borrowing from overseas to pay for public sector wage rises and all without any appreciable productivity offsets.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. I thank the minister and I ask if he has any message for public servants about the forthcoming bargaining process.

Opposition Senators:

Opposition senators interjecting—

John Hogg (President) Share this | Link to this | Hansard source

Order! When there is silence on my left, we will proceed.

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

The coalition recognises that public servants have families, they have mortgages and they have bills. The government is already having to manage a reduction of 14,500 Public Service jobs as a result of the former Labor government's largely secret cuts. Each one of those 14,500 is a human being, probably a family breadwinner. Labor's administrative and financial mismanagement shattered the APS morale and imposed ever-increasing efficiency dividends on the Public Service, now resulting in minimal capacity for wage increases. In the bargaining process, the coalition government is working methodically to turn this around again, to ensure that we do have a sustainable Public Service, free from the fear of constant contraction and chaos.