Labor told the PBO its policy of abolishing the cap would cost nothing over four years because any increase would be offset by savings within the public sector.
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Perrottet seized on Labor’s assumption,insisting the opposition “had been caught out deceiving NSW taxpayers”.
“The PBO has delivered a scathing analysis of Labor’s budget management,confirming a giant black hole. This will have real consequences for every household in NSW who end up paying more or face cuts to much-needed infrastructure,” Perrottet said.
“Labor has proven itself to be a serious risk to the NSW economy.”
However,Labor Treasury spokesman Daniel Mookhey said the opposition had demonstrated how it would save money for taxpayers and defended the absence of costings for its wages policy.
He said Labor would make structural changes to how it determined wages for public sector wages,with a focus on negotiation.
“We have unveiled $3 billion worth of savings on the operating side of the budget. Essential workers will always have better pay,better conditions under Labor,” Mookhey said.
The PBO signalled that public sector wages will be a risk to the budget no matter who wins the election,as inflation stokes pay growth acrossthe economy.
“If public sector wage growth does not keep pace with private sector wage growth,there is a risk that the public sector will be unable to retain key staff,threatening effective service delivery,” its report said.
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NSW Labor leader Chris Minns said he could guarantee workers would be paid more than the existing cap of 3.5 per cent because “we know that there’s budget savings and we know that there’s productivity gains”.
The PBO found that Labor policies,which include modest savings and lower expenditure,would deliver smaller budget deficits than currently forecast for the next two years and better surpluses.
Under Labor,the overall improvement to the budget outcome over the next four years would be $1.4 billion better than forecast in the pre-election budget update released by NSW Treasury earlier this month. Recent policies unveiled by the Coalition would leave the budget outcome $97 million better over the next four years than previously forecast.
Earlier this monthNSW Treasury downgraded its budget forecasts predicting a deficit of $12.03 billion this financial year and a $7.1 billion deficit in 2023-24. That will be the NSW government’s fifth consecutive deficit.
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A Resolve Political Monitor survey of voters late last month found the majority of people believe public sector workers,including nurses,teachers and paramedics,should be given a pay increase above the wages cap.
The PBO said Labor policies would result in the state’s net debt being $2.1 billion lower than currently forecast by 2025-26. One reason for the improvement is that the ALP will not proceed with several Coalition road projects.
Recent Coalition policy announcements will leave NSW net debt $2.85 billion higher by 2025-26 than currently forecast,the PBO said. More than a third of that increase will result from the Coalition’s policy to accelerate universal access to pre-kindergarten.
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