New research from the Australia Institute’s Centre for Future Work reveals the consequences of freezing public service pay, both for public sector workers and for the broader economy.
Key findings:
- At least 35% of the purported ‘savings’ from freezing public service pay is offset by the loss of direct tax revenues
- A 6-month pay freeze for a typical federal APS worker will reduce career earnings by an estimated $23,500 and superannuation accumulations by another $4,000 or more
- Misguided public sector wage restraint after the GFC helped lock in historically slow wage growth in the private sector — Australia cannot afford to repeat this mistake
“Pay freezes are being imposed at the very moment when public sector workers such as healthcare workers, first responders, teachers and social service providers are performing vital tasks, at personal risk to themselves,” said Dr. Jim Stanford, Director of the Centre for Future Work.