Labour Cost Index - May 2010

  • Tony Ryall
State Services

"Overall, the Government's message of restraint in the public sector wage bill is being heard," says State Services Minister Tony Ryall.

Latest Labour Cost Index (LCI) figures show the quarterly public service salary movement has been lower than the private sector movement for five consecutive quarters.

"In general, it is pleasing to see that the Government's expectations of restraint are being heard.  The recent agreement with nearly 75 percent of the health workforce is a good example."

"Police have also just settled with the Police Association.  The two year deal includes a one-off payment of $1,000 per person at 1 July 2010 and a 1.3 percent wage increase from 1 July 2011."

"But the LCI figures also show some areas where wage and salary changes are out of step with the rest of the country, with local government increases three times more than the public service movement."

"While public service salaries rose 0.1% for the quarter and 0.7% for the year, local government salaries went up 0.3% for the quarter and 2.1% for the year."

"However, in the wider public sector, some groups' claims are out of line, such as secondary teachers demanding a 4% increase for each of the next 3 years."

"Contrast that with what is happening overseas;

  • in Ireland the Government has cut public service salaries by up to 15%
  • Canada has frozen all wages in government departments for the next 2 -3 years
  • Spain has just announced a 5% cut in public sector pay from this June;
  • and Italy has established a 3 year wage freeze for public servants and will not replace one in five staff who leave. "