Public sector salaries must be linked to performance

CCIWA Chief Economist

Aaron Morey

The State Government’s update to its wages policy today underlines the need for public sector wage increases to be linked to demonstrated improvements in performance, efficiency and productivity, as occurs in the private sector.

This is especially relevant in light of the State Government’s environmental approval cost-recovery scheme, which risks imposing significant costs upon business without clear incentives for the public sector to limit costs.

The Mid-Year Review also includes a record increase in health funding. As WA looks to end travel bans and lockdowns, additional resources to ease the pressure on hospitals, beds and health services will lift the confidence of Western Australians.

Continued fiscal discipline will be needed to sustain the positive Budget position, which has been boosted by temporary factors such as record commodity prices. In this context, it is noted the mid-year review includes a $1.5 billion write-down in iron ore royalties for the current financial year.

With projections forecasting that the Budget’s reliance on payroll tax will increase, CCIWA will work with the State Government and our members to ensure further public spending is aimed at driving economic growth and diversification.

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