Public service wage freeze

Treasurer Peter Gutwein

Treasurer Peter Gutwein

MORE than 27,000 public servants would have their wages frozen for at least a year as part of a state government plan being considered to ease the pressure on the budget.

Treasurer Peter Gutwein has revealed the government is considering introducing the one-year wage pause, which would be followed by only 2 per cent increases.

It's estimated that would save $50 million over a year.

In a speech he will deliver to business people in Devonport today, Mr Gutwein will say that expenditure had blown out under Labor and the Greens.

``Today public sector wages are more than $100 million per annum higher than forecast just three years ago,'' he said.

``Since 2003-04, public sector employment costs have grown by more than 80 per cent.''

The Liberals went to the election pledging to shrink the public service by 500 over two years, but last month said they would have to find savings equivalent to an additional 1000 full-time equivalent job cuts. 

``It's clear that if we are going to get the budget back on to a sustainable footing, we have to do something not just about the size of the public sector, but the growth in public sector wages,'' Mr Gutwein said.  

The move would anger unions, which late last year struck a new three-year deal with the then government, limiting salary increases to 2 per cent, in line with the government's wages cap. 

Mr Gutwein acknowledges that the plans will be ``challenging'' to unions and many public servants.

``However, this is something that many other Tasmanians have experienced in areas like agriculture, mining and manufacturing. When times are tough, tough measures are required,'' he said.

Mr Gutwein warns ``harsher, more severe cuts'' would be required later if the Liberals did not stop wages spiralling out of control. 

The new government has delayed the release of the state budget until August 28.

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