QTU Members' newsflash No. 18-20, 8 May 2020 | DOWNLOAD PDF
To QTU Members
Government demands pay freeze for teachers and all public sector workers
Reporting by the ABC yesterday finally secured confirmation from the state government that it intends to impose a
pay freeze on state government employees, including teachers and principals and all other school staff, into the
Unions, including the QTU, sought clarification of what seemed to be throw-away lines about a freeze in wages by the Premier on television last month. The government commenced discussions with public sector unions, but on the condition of confidentiality.
As the QTU said at the time of the original comments (Newsflash 13-20), the QTU has a binding certified agreement with the state government as the employer, and any proposition to change that would be considered and voted on by QTU members, in accordance with legislation and QTU custom. That remains the Union’s position. While QTU Executive has been fully briefed on the discussions, QTU Officers have been increasingly anxious about the need for open discussion of the state government’s pay proposals, particularly as decisions were being made about the operation of schools and new and changing demands were being placed on teachers and principals.
There remains no formal proposition from government for members to consider. What follows is based on statements and documents from the government that are in the public domain.
What is the “freeze”?
The Queensland Premier was quoted in yesterday’s ABC report as saying that the government is imposing a 12 month pay freeze (as opposed to the six month freeze imposed by the federal government).
A letter written by the Treasurer and the Industrial Relations Minister to the Queensland Council of Unions on Friday about pending EB agreements in various parts of the public sector referred to a “ … temporary change to the application of [government] wages policy for the period 2 April 2020 to 30 June 2021”.
In terms of QTU agreements, this would affect the 1 July 2020 increases in both the schools and TAFE certified agreements.
There are three principal versions of the “freeze”:
- Abolish – remove the increase as if it never existed with unions and employees having to recoup lost ground in future bargaining.
- Deferral – payment of the increase but from a later date (after 30 June 2021) with no back pay.
- Postponement – payment is made from a later date but with full back-pay.
The government position is either the first or second of these. The ABC report yesterday included quotes from the LNP Shadow Treasurer, who stated that his party supported the pay freeze, but wouldn’t support the last version and was opposed to the resolution of delayed bargaining processes in parts of the public sector (including health workers) before the freeze was implemented.
Why does the government want a freeze?
The COVID-19 pandemic has had a significant impact on the state government’s finances. Expenditure has increased, particularly in the area of health. To counteract the economic impact of the pandemic (in a national economy that was verging on recession before COVID-19), the government has announced a $4 billion stimulus package.
At the same time, government revenues have fallen substantially as a result of the health restrictions, including the closure of a wide range of businesses. State taxes and GST are all affected, and will continue to be until the economy returns to “normal”.
The Under Treasurer (the Director-General of the Treasury Department) gave a briefing to the Economics and Governance Committee of the Queensland Parliament yesterday which details the economic impact of COVID-19 on the Queensland economy and the state budget. In discussions with government, unions had received a similar briefing from the Treasury after questioning the government’s rationale for any change in wages.
The economic impact of COVID-19 restrictions is not limited to the state budget. Most economic predictions are that unemployment will have at least doubled, and underemployment further increased.
The state budget for 2019-20 was about $60 billion, with wages and salaries comprising about $26 billion. A wage freeze of 2.5 per cent saves $500 million ($0.5 billion). If it is an abolition, it saves $500 million every year into the future. If it is a deferral, it saves $500 million in 2020-1. If it is a postponement, it saves nothing at all.
In the absence of a formal proposition to consider, the QTU’s position is essentially as expressed in Newsflash 13-20 3 April:
The QTU and the government have a binding, legal agreement which includes a 2.5 per cent pay increase from 1 July 2020. That agreement can be changed – as it would need to be in the event of a pay freeze – if a ballot of employees covered by the agreement supports the change.
The pandemic has exacerbated problems in an already damaged and slowing economy. But it is the public sector that is addressing the crisis, through nurses, doctors, allied health professionals, catering and cleaning staff in public hospitals, emergency service workers including police and paramedics, and teachers changing educational delivery in a week to meet the demands of the times.
Media kites suggesting the public sector needs to “share the pain” are evidence of profound detachment from the work being done by the public sector in this emergency.
If a proposition were put that deferring wage increases for a period would directly help fund an added response to the COVID-19 pandemic and would directly help Queensland people in a way that cannot be achieved by other means, the Union would listen and talk to members. There is no such proposition at this time.
ABC News yesterday noted that the government may move to legislate the freeze in whatever form, taking it out of the hands of unions and members.
The QTU has also raised the impact of any change on members in the defined benefit superannuation scheme who are intending to retire after 1 July this year.
The QTU has questioned and will continue to question whether cutting state budgets as “austerity economics” is the most appropriate course of action. Cutting teachers’ and other public sector workers’ pay will remove $500 million from circulation in the economy, exacerbating the economic slowdown and slowing recovery unless it is used (not saved) in a way that has greater economic or social impact.
It is not the role of governments to balance their budgets in times like these. Governments are not households or businesses. The proper role of government is, in a counter-cyclical way, to spend in a targeted way to stimulate the economy and make up for the lack of private sector economic activity, whether as a result of economic or health factors. The additional expenditure on health needs and on economic stimulus will add in the short-term to government debt to be paid down in good times of high economic activity and tax revenue.
That is an ongoing lesson of the Great Depression during which, incidentally, wages were cut but by industrial tribunals and not by the unilateral decision of government, which is also the employer.
At the same time, the positive decisions of the Queensland Government in providing additional pandemic leave, providing for payments for casual teachers, continuing employment contracts for temporary teachers and maintaining public sector employment generally should not be forgotten.
The QTU will continue to provide updates to members and is developing responses in the event that the government proceeds.
Authorised by Kate Ruttiman, General Secretary, Queensland Teachers' Union
21 Graham Street, Milton, QLD, Australia, 4064