The prospect of a major industrial showdown between federal public servants and the Abbott government over pay, conditions, performance management and workplace entry rights for unions has escalated dramatically after the government released its new bargaining framework for forthcoming negotiations.
In a document that is essentially devoid of any new concessions for public sector employees, Minister for Employment and Minister Assisting the Prime Minister for the Public Service Senator Eric Abetz revealed on Friday that the government will stick to its refusal to grant any pay increases unless they are offset by reduced headcounts, increased workloads and greater powers to weed out non-performing staff.
The refusal to accommodate even a token pay increase to offset inflation is sure to be interpreted as a direct challenge to the influence of the Community and Public Sector Union which has earned a reputation for being able to endure sustained negotiations longer than many minister’s patience.
The overtly hardline stand in the Government Bargaining Framework was widely anticipated in the ranks of the public service since last year’s change of government.
However a complicating factor to what would otherwise be a straight out dispute are heavy job cuts now in progress that stem from the reviled efficiency dividend put in place by successive Labor Finance Ministers that could act to impede the Coalition’s ambitious reform plans because there will be little left to cut without creating a wave of unproductive, expensive and disruptive consequences.
The biggest stand being made by Senator Abetz is the bid to prevent service-wide bargaining by the powerful CPSU, which is affiliated to Labor in the Australian Capital Territory, by letting more than 100 agencies and departments negotiate directly with their staff.
However the devolution of authority for departmental chiefs to bargain directly has been rendered a potentially cosmetic exercise because the Australian Public Service Commission and the relevant portfolio minister will also have to agree to any deal that is struck, essentially giving the government an agency by agency right of veto.
On Friday Senator Abetz reiterated the position that there would be no pay rises without other savings – a position that means remuneration for 160,000 public servants could creep backwards after inflation.
“Public service conditions must not only be in line with community expectations, but they must be affordable and sustainable. It is no longer possible for the Government to fund new pay rises by borrowing more money from overseas,” Senator Abetz said.
“Programme and service funding cannot be used or redirected to pay for increases in pay and conditions. Any such increases must be funded from within existing budgets. This will ensure that services to the public are protected”
The government is also gunning for productivity increases, although specifics or definitions of what these may be remain ambiguous at best.
Although there is a grudging acknowledgement that it can often be more difficult and time consuming to sanction or remove underperformers than it is to compensate for them, many of the biggest productivity and efficiency gains have actually come from technological advancements where process or services are automated or delivered online.
A core challenge the Abbott government faces is how to financially deal with long-term investments in projects like eHealth and reforms to transaction based services like Medicare and Centrelink so that billions in future savings are sacrificed for smaller immediate cuts.
Both Treasurer Joe Hockey and Communications Minister Malcolm Turnbull have made conspicuous noises about outsourcing some the retail functions of Centrelink and Medicare to Australia Post in an effort to create efficiencies and as the postal monopoly slides into red ink.
With more than 60,000 employees between them, many of which are industrialised, there is clear potential to reduce both headcount and curb union influence.
However by far the biggest hurdle point for the government in its negotiations over a new industrial instrument for the public services is simply time.
With the current agreement due to expire on 1st July, the government will be essentially forced to reveal its thinking for future public service staff funding in the Budget in mid-May that will also bring with it the actual results from the sweeping Commission of Audit.
Those two key factors mean that any ministerial rhetoric about sacrificing jobs to compensate for pay increases will largely be hollow tough talk until then because the government’s financial plans for the public service will be out in the open before the existing agreement lapses – an intelligence factor that favours the CPSU.
While the union is keeping its powder dry until it sifts through the detail of the latest framework, the reality remains that there will be no incentive for many public servants to agree to diluted entitlements or reduced conditions if they will imminently face the axe because their termination payouts would be reduced.
Moreover, given the prospect of up to 26,500 of 160,000 public servants being let go, those remaining logically have little to gain by ceding financial ground to an employer that will expect the same amount of work to be done with fewer resources.
Even so, Senator Abetz is sticking to his guns as the clock ticks down.
He said the government remained intent on “ensuring that the right to belong, or not to belong, to a union is genuinely respected” as well as “removing restrictions in current arrangements which inhibit managers’ ability to manage their staff.”
The government is also seeking to remove the ability to backdate any pay-rises that are potentially negotiated through a drawn out dispute – a proven tactic for unions – by “requiring any remuneration increase to apply prospectively.”
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