The federal government will delay public service wage rises for six months, saying Commonwealth bureaucrats must share the economic burden of COVID-19.
Assistant minister overseeing the public service, Ben Morton, announced on Thursday that wage rises due in the 12 months from April 14 will be deferred for six months.
"This will ensure the deferral is shared equally by all APS employees," Mr Morton said.
Public servants at 74 Commonwealth departments and agencies are due to receive wage increases in the 12 months now covered by the government's pay rise freeze for the public service.
Unions responded swiftly condemning the decision, saying it was wrong to freeze wage rises as the government relied on public servants to implement its responses to the coronavirus.
Mr Morton said the Australian Public Service remained a critical part of government efforts to minimise the impacts on COVID-19 on the Australian economy.
"Everyone from the Prime Minister down appreciates the outstanding work the APS is doing," he said.
"Every APS employee will have someone in their families, or know someone, affected by the current economic circumstances.
"While communities are doing it tough, it's important the APS helps share the economic burden."
Many departments and agencies agreed to 2 per cent wage rises last year after skipping negotiations for new workplace agreements. The government decision will pause those salary increases for tens of thousands of Commonwealth bureaucrats.
Assistant Minister Morton has signed the wage rise stay for the APS workforce into effect, saying the decision was taken due to "the exceptional economic circumstances being faced by Australians as a result of the COVID-19 pandemic".
The decision will apply to APS agencies only, however Mr Morton has asked public service commissioner Peter Woolcott to tell non-APS agencies the government expects them to defer pay rises for six months as well.
Mr Morton has also asked the commissioner to ensure new wage proposals approved over the next 12 months are consistent with the pay freeze.
"Our intention is to return to what has been a very successful public sector wages policy as soon as is possible, but we will continue to monitor the economic outlook and respond as necessary," the assistant minister said.
Staff at 26 Commonwealth departments and agencies are covered by industrial instruments expiring during the wage freeze period.
The Community and Public Sector Union, representing Centrelink, Tax Office and Australian Border Force workers among other public servants, condemned the move to delay wage rises for six months.
It said the wage increase for the federal public sector was only 0.058 per cent of the government budget, and the freeze would not help the budget bottom line.
The CPSU called on the government to reverse the decision, its national secretary Melissa Donnelly saying members were working longer and harder than ever before to meet an unprecedented surge in demand for government services.
"That is why it is so very disappointing that the Morrison government's response to COVID-19 is to freeze the wages of public sector workers who are holding our community together," she said.
"There are no winners in this decision, workers getting less means they will spend less in their struggling local businesses."
Australian Services Union official Jeff Lapidos, representing ATO staff, said the government decision to freeze wage rises was doubly wrong when the government expected tax officers to deliver an enormous agenda for Australians.
ATO employees were due to receive a 2 per cent salary increase from August 3.
"We suffered a three year delay in getting a pay rise in 2017 so we could protect our workplace rights from attack by this Coalition government," Mr Lapidos said.
"It is wrong for the government to seek to override a determination by the Tax Commissioner at any time."
The union representing Commonwealth scientists and engineers said public servants had already faced years of pay freezes, staffing cuts, stressful restructures and redundancies.
Professionals Australia ACT branch director Dale Beasley said the government had to make sure it didn't stretch the public service workforce to breaking point.
"It's disappointing that this announcement has come on the eve of a long weekend, at a time when many APS employees are doing more for the Australian community than has ever been asked of them before," he said.
"It's unclear how the government expects removing wages from people's pockets will help the economy."
Deloitte economist Chris Richardson said the wage rise delay was more symbolic as the sums of money involved were small for the government, especially compared to the $130 billion JobKeeper package.
While the wage freeze would take money out of the economy, the government was also putting vast amounts of cash into it through the wage subsidies for private sector workers at risk of unemployment.
"The dominant consideration is it's pretty important for Australians to know we're all in this together," Mr Richardson said.
Despite the wage rise freeze, the public sector would still do comfortably better than the Australian average in terms of sharing the economic burden of coronavirus, he said.
"This is about the symbolism. I have no problem with it."
Industry Super Australia chief economist Stephen Anthony said while the wage rise delay was understandable given the economy, there might be sense in waiting until the virus shock had passed before implementing it.
The decision could also be counterproductive given the government was trying to stimulate economic activity, he said.
Mr Anthony said the government was trying to reduce spending anywhere it could to offset its massive spend on measures against a coronavirus-related economic downturn.
"You always like these decisions occurring at the workplace and driven by underlying productivity," he said.
"It's not the way you would normally want to see a wage negotiation approached.
"That said, if this is about maintaining employment, then perhaps that's the trade-off."
Labor public service spokeswoman Katy Gallagher said the wage rise freeze would come as a disappointment for public servants working hard to protect Australians through the COVID-19 pandemic.
The government decision follows a stay last month on pay rises for senior public servants. It has also asked the tribunal overseeing MPs' wages to freeze salary increases for parliamentarians.
ACT Chief Minister Andrew Barr has said the territory government would not request a wage freeze for its non-senior executive public servants.
The chief minister has asked the ACT remuneration tribunal to freeze pay rises for senior territory-level public servants and statutory office holders during the health crisis.
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