State Services CommissionCrown Copyright

Government's Expectations for Pay and Employment

Conditions in the State SectorMay 2011

SSC Overview - Trends

Settlements:• Most settlements where rem is included are tending to

the 1 – 2% pa range.• Increasing # of settlements with no rem included, - ie CE

discretion.• Claims for remuneration to be included in CA’s being

successfully resisted.

LCI trends

All sectors year to 31 March – 1.9% • Private sector – 2.0%• Total public sector - 1.4%

oCore public service – 0.9%oHealth - 1.8%oEducation - 1.1%

LCI - movement

0%

5%

10%

15%

20%

25%

30%

35%

40%

Jun

Se

pD

ec

Ma

rJu

nS

ep

De

cM

ar

Jun

Se

pD

ec

Ma

rJu

nS

ep

De

cM

ar

Jun

Se

pD

ec

Ma

rJu

nS

ep

De

cM

ar

Jun

Se

pD

ec

Ma

rJu

ne

Se

pD

ec

Ma

rJu

ne

Se

pD

ec

Ma

rJu

nS

ep

tD

ec

Ma

r

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 .

Labour Cost Index - Wage and Salary Movement

Public Service

Health

Education

Private Sector

Local Government

Public & private wage rates

Comparative rate movements

Quarterly, six monthly and annual movements in wages and salary

Sector Quarterly Change

Six Monthly Change

Annual Change

All sectors 0.5% 1.0% 1.9%

Private sector 0.4% 1.0% 2.0%

Public sector 0.5% 0.9% 1.4%

Local Government 0.5% 1.5% 2.1%

Central Government (State sector) 0.5% 0.8% 1.3%

Public Service* 0.1% 0.6% 0.9%

Health 1.2% 1.4% 1.8%

Education 0.5% 0.7% 1.1%

Other Central Government* 0.0% 0.1% 0.3% *Non-published information from the SSC’s special cut of the LCI

Government’s Expectations:

Originally agreed by Cabinet in 2009 and refreshed in May 2010

Economy is still in recovery mode Pressures and expectations likely to

increase Review by SSC confirms GE are still valid,

so likely to recommend No fundamental change, but reinforcing ...

Key ER & Rem Messages

ER outcomes must support agency business objectives (medium and longer term)

Chief Executive accountability The critical link between:

• pay and conditions, productivity & fiscal restraint & improved service delivery

Affordability, now and in medium term & sustainability of organisation over time.

Key ER and Rem Messages

Focus on what’s right for organisation rather than “market movement”

Targeting performance and genuine recruitment and retention

Consider all aspects of staff costs, look at total rem & factor indirect staff benefits

Key ER and Rem Messages

Align actions around remuneration strategies with the 4 year Budget capability plans

“Fairness” means fair to taxpayers and employees

Aim is to restrict Public sector LCI to a level below private sector

Application of Expectations

Government’s Expectations:

Public Service, Crown Entities, Non Public Service Departments

RemunerationEmployment conditionsCollective bargaining

SSC Approach

Looking for ways to add value Focus efforts on biggest payback/risks Likely to move to more differentiated

approach using risk/scale/profile to guide effort/engagement

Yet to be finalised & agreed

Information requirements

Most likely call for: Brief rationale % & $’s around total rem broken down;

committed & proposed Staff numbers etc Assurance as to expectations eg flow-on Affirmation from CE around affordability &

sustainability

We’ll issue more detail post-budget

SSC work programme

Update on work programme

Next steps

Finalise approach Agree info requirements Consider Expectations – Cabinet ? Communication