Revised wages policy of 1.5% per year applies to all industrial agreements expiring on or after June 1, 2016
This will provide an estimated $825m in savings reflected in the 2016-17 Budget
The State Government has revised its wages policy to ensure Western Australia's public sector employees receive pay rises that are sustainable in the current challenging fiscal environment.
Treasurer Mike Nahan and Commerce Minister Michael Mischin said the Government had approved the policy parameters of pay rises of 1.5 per cent a year for the State's 140,000 employees, consistent with the Department of Treasury's forecast of the Consumer Price Index (CPI) in 2015-16.
Dr Nahan said salary costs remained the largest expense across the public sector, accounting for about 40 per cent of total recurrent spending in 2015-16.
"The Government's revised wages policy is essential for the responsible management of the State's finances," he said.
"While the Government has achieved considerable success in recent years in reining in unsustainable growth in salary expenses - bringing annual average growth down to 4.5 per cent over the period 2012-13 to 2014-15 after a decade average of 7.8 per cent - further efforts are required in light of declines in revenues."
At the level commonly used for such comparisons, Western Australian nurses, teachers and police officers are paid more than their counterparts in all other States, Treasury's analysis from December 2015 found.
Mr Mischin said the revised policy applied to all industrial agreements expiring on or after June 1, 2016.
"During the unprecedented economic growth driven by the resources sector, the Government's wages policy provided for rises above the CPI to keep Western Australian workers in the public service, contributing to them being among the highest paid in Australia," he said.
"The revised wages policy comes at a time when real wages are being reduced and jobs are being lost or in jeopardy in the private sector."
If negotiated outcomes cannot be achieved, any increases above 1.5 per cent a year will need to be absorbed within agencies' approved salaries budgets, the Treasurer said.
Dr Nahan said an estimated $825 million in savings from the revised wages policy would be reflected in the 2016-17 State Budget.
Treasurer's office - 6552 5700
Commerce Minister's office - 6552 5600