EDITORIAL: State wage bill is unaffordable
A cost-of-living settlement above CPI means that the settlement busts the budget
If we are realistic, given past trends, the government was not likely to secure a wage settlement with public servants of anything less than consumer price index (CPI) plus 1% without a major confrontation such as a strike. The unions have won increases that were well above inflation for at least the past decade. Taken together with other occupational dispensations that were granted, the average employee salary has risen 29% since 2008. By 2017, spending on compensation consumed 35% of the budget. So the three-year deal reached on Friday, which is expected to be signed by the majority of unions, secured increases of 6% and 7% for employees in the first year, followed by CPI plus 1% for the lowest earners, CPI plus 0.5% for the middle earners and CPI for the top earners in the outer two years. It was the least costly that has been negotiated for a long time. It was still too much. To keep expenditure ceilings intact and not overshoot compensation budgets, the Treasury needed a straig...
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