IS THERE REALLY A HARD ‘LIMIT’ TO OUR ANNUAL PAY RISE?
One of the most common questions that members and non-members alike ask A Voice For Members is this: what exactly is the wages cap?
In this article, we’ll answer this question as clearly as possible, respond to three common follow up questions, then connect both the questions and answers to what they mean for VPS staff.
WAGES POLICY
In official government documentation on this topic, the wages cap has the more neutral sounding name of a ‘wages policy’, and it sits alongside a series of other rules that the Treasurer has determined will inform the negotiation of all Enterprise Bargaining Agreements with government employees.
This includes policy staff, regulators, administrators, teachers, nurses, fire-fighters, police, and too many other professions to list here.
Core to the wages policy is this:
Increases in wages and conditions will be funded at a rate of growth of 3.0 per cent per annum over the life of the agreement. In practice this means employee wages and conditions will be allowed to grow at this rate.
What this means is that when the CPSU negotiates our annual salary increases in our EBA, the Government’s opening position in bargaining – a position that can and should change with the cut and thrust of any negotiation – is that all universal, annual increases to salaries will be limited to 3%.
This position is reflected in our current Enterprise Agreement, which includes an annual salary increase of 3% on the 1st of May in each of 2024, 2025, 2026, and 2027, for a total 12% over the life of the Agreement.
IS IT GOOD ENOUGH?
The first question to flow from this fact is this: is 3% a good outcome? Let’s look at Chart 1 below:
This chart shows – for VPS3’s thru VPS6s – the actual dollar gains or losses made each year once we adjust wages for inflation. 2011 to 2020 was an excellent period: in real terms VPS3’s thru VPS6’s saw gains of between $9.5k and $18.3k.
However, these gains were wiped out by the inflationary period that followed the COVID-19 pandemic in 2020 and 2021. Going into enterprise bargaining in 2023 and early 2024, our real wages were lower than they were in 2016, as shown by the annotated dashed line.
We see here very clearly what the 3% annual pay rise in our current EBA actually means: this is below inflation, and by the time it expires in 2028, we will only be as better off in real-terms as we were in 2018; shown by the second annotated dashed line.
This is a very poor outcome for members. Our union has accepted what is in reality, a pay cut. The second question members ask is this: but isn’t the wage cap a hard limit that we can’t push past? The answer to this question is a definitive no.
CAN THE WAGES CAP BE CHANGED?
The wages cap is not a hard limit that the government cannot go past when we are bargaining for our wages, because the government created that limit. They did so in order to have a standing, public position at the beginning of any series of wage negotiations.
Like any law or regulation, Government can change it or remove it just as easily as they created it.
HAVE OTHER UNIONS PUSHED BACK?
The third and final question that members ask us is this: well, in that case, is there proof that other public sector unions were able to negotiate annual salary increases above the wages cap?
The answer to this question is a definitive yes. Next to the 12% we will receive over four years – four years of the 3% wages cap – Victorian nurses and midwives will receive 28.4%, Victorian police will receive 18 – 20%, Victorian paramedics will receive 17%, and Victorian firefighters have refused to accept the 12% and continue to fight for a better outcome.
We too could have fought and won more.
See Chart 2 below: Total salary increases over 4 years for public sector workforces, won in their most recent EBA
SUMMARY
The wages cap of 3% per annum is a government policy that can be changed or removed by the government any time. A policy that limits annual wage increases to 3% is a policy that cuts wages in real terms, given recent levels of inflation.
Unions can, and have, successfully negotiated annual wage gains above the Government’s 3% limit, further proving the wages cap is not written in stone.
If you don’t fight, you lose. There’s no clearer proof of this for VPS employees than our very own EBA. It’s time for a union that does fight – and A Voice for Members needs your help to do it.
MEMBER PROFILE – KRISTAL
What’s your name?
Kristal Allison
How long have you been in the union?
A few years, now proudly serving as a delegate.
Where do you work and what do you do?
I work in policy in the Victorian Suicide Prevention and Response Office (DH).
My role has made me keenly aware of the importance of workplace support and why workers need strong union representation.
Why did you join?
I joined because workers in the public sector need protection and the power to shape the workplaces that serve our communities.
I’ve become more involved as I’ve seen growing inequities that only collective action can address.
Why are you with A Voice For Members?
I believe in the values that make unions strong: democracy, transparency, and leadership that’s grounded in the needs of workers.
Right now, there’s a disconnect between union leadership and the rank and file. As trust fades, so does our collective power.
We need leadership that listens, involves us, and is accountable.
What’s your vision for the CPSU?
I want a union that’s lively, connected, and truly focused on its members. A union where workers’ voices matter, and our collective action can tackle workplace issues as well as the broader political implications of our work.
That means fighting for public sector workers’ rights here and now, and standing in solidarity with workers everywhere—because the fight for workers’ rights and human rights are inseparable.
CAMPAIGN TRAINING
HOW TO RUN AND WIN RANK N FILE UNION ELECTION CAMPAIGNS
Saturday March 29, 9am – 12pm
Labor Notes has offered to run training for our team about how to run and win rank n file election campaigns. They will be very honest and direct with us!
We are in for a real fight. The incumbents will get mean and dirty, and they might even do things they’ve never done before – like actually organise, have meetings, call rallies, that kind of thing!
This training has been held – thank you to all who attended!
