TASCOSS claims Premier Jeremy Rockliff’s latest budget is prioritising infrastructure over people in the midst of a worsening affordability crisis. Photo: Richard Minch.
Shortly after a damning report detailed how public sector austerity is pushing workers to the mainland, the Tasmanian Government’s latest budget has been criticised for “investing in projects over investing in people”.
In their wrap of the recent 2024-25 State Budget, the Tasmanian Council of Social Services (TASCOSS) claims the government prioritises $5.1 billion of investment in infrastructure “ahead of investments that support people into long-term employment, provide safe and affordable homes for Tasmanians on low incomes, and reduce energy bills over the long term”.
“We were looking to this Budget to invest in structural improvements to affordability issues, such as a broad-based program of energy efficiency upgrades that would drastically and permanently cut energy bills for Tasmanians on low incomes,” said the island state’s peak body for the community services industry.
“Instead, the budget once again focuses on short-term relief such as poorly targeted, one-off energy bill payments.
“Payments which will go to every household, no matter how much they earn, with $12.7 million of financial support going to the wealthiest 20 per cent of Tasmanian households.”
As the cost-of-living crisis continues to put considerable pressure on households, TASCOSS members recently told their survey that 72 per cent were planning to make changes or reduce service delivery due to inadequate funding. Many of the respondents said they have already enforced cuts.
While the peak body thanked the state government for delivering on its commitment to an indexation approach for the community services industry, it said this will only go some way to addressing cost increases.
“This means more Tasmanians missing out on support to get stable housing, to nurture their children’s wellbeing, or to acquire the skills they need for secure employment,” said TASCOSS.
“These are the kinds of investments that set our state up for future success.
“As the community services industry calls for fairer funding to ensure Tasmanians don’t miss out on essential services, the government is on track to pay $1.36 billion on its escalating debt.”
TASCOSS welcomed some of the smaller-scale funding announcements in the budget, but overall, the body said it “hits the wrong target by prioritising projects over people”.
Wage and salary spending per state public sector employee in June 2023 was the second lowest in the Commonwealth at only $81,413 compared to the national average of $86,301. Source: McKell Institute.
Earlier last month, the McKell Institute published a report revealing how the state’s public sector workforce is now more worse off than they were over 13 years ago.
Using wage and consumer price index data, author Max Douglass found that Tasmanian public sector workers earn, on average, almost $5,700 less than their mainland counterparts.
“While public sector workers have suffered similar decreases nationally, Tasmania’s is unique in that real wages began to fall in September 2017, meaning that the decrease is significantly more attributable to the state government’s wage-setting policies rather than just inflation,” reads the report.
“This gap has grown by 37 per cent nationally since 2013 and has grown by over 120 per cent in New South Wales, Victoria and Queensland.
“What is more, it shows no sign of catching up any time soon, with Tasmanian public sector wage growth sitting at the second lowest among the states in June 2023.”
Tasmania has the second-most state public sector workers per capita of any state or territory, being eclipsed only by the Northern Territory. In June 2023, approximately 34,000 people were employed in the State Service (TSS).
Most are covered by the Public Sector Union Wages Agreement 2022, which commenced on 1 July 2022 and remains in force until 30 June 2025.
It has already provided two rounds of remuneration increases. One more is expected in December, raising all salaries by 3 per cent and providing low-income employees with their final one-off payment of $500.
Despite this, the combined impact of the December 2022 increases was considerably below the 7.7 per cent annual inflation observed that year. Similarly, the 3 per cent increase in December 2023 fell below the annual inflation rate of 3.3 per cent.
This led Mr Douglass to conclude that inflation has played less of a role in suppressing real public sector wages in Tasmania compared to other jurisdictions.
Instead, he pins the blame on the state government’s consistent sub-inflation wage offers over the past seven years.
“Tasmania’s systemically declining public sector salaries are having considerable ramifications for the recruitment and turnover of public sector workers, exacerbating an already acute labour shortage,” Mr Douglass wrote in the report.
“It not only leaves less money in public sector workers’ pockets, it leads to a vicious cycle of high vacancy rates and declining service quality.
“Rather than being a fiscal millstone, giving public sector employees the salaries they deserve is both a social and economic imperative and an opportunity for all Tasmanians.”
