New South Wales is establishing a $3.6 billion fund to boost public sector wages.

In a move aimed at tackling critical staff shortages and rejuvenating essential services, the NSW Government has introduced a $3.6 billion Essential Services Fund (ESF). 

The fund is intended to provide long-term wage growth for frontline workers such as nurses, paramedics, educators, police, firefighters, prison officers, and child protection workers. 

The initiative aligns with the government's strategy to enhance working conditions, retain valuable frontline staff, and attract new talent to the pivotal roles. 

The ESF comes alongside the government's commitment to assist its public sector workforce by establishing a new bargaining framework and earmarking the necessary funds for service improvement and wage increases for thousands of employees.

This is in addition to previous government measures, including the abolition of the prior administration's wage cap, a two-year salary freeze for senior executives and Members of Parliament expected to save around $250 million over four years, a 4.5 per cent pay hike (including a 0.5 per cent increase to superannuation) in 2023-24 for over 400,000 public sector workers, and agreements securing well-deserved pay increases for essential workers.

To further solidify this commitment, an Industrial Relations Taskforce, led by Anna Booth and Roger Boland, veterans in labour relations, has been established to implement a new interest-based bargaining framework.

While the government's initiative has received support, questions persist about the funding sources for these wage increases. 

Proposed cost-cutting measures include pay freezes for MPs and senior executives, reducing reliance on consultants and labour hire, and savings in water infrastructure projects.

Coal royalties will also contribute to the funding, with a $2.7 billion increase expected from July 2024. 

The government anticipates announcing further savings measures in the lead-up to the budget, emphasising the balance between fiscal responsibility and enhancing essential services.

In response, Shadow Treasurer Damien Tudehope questioned the government's transparency and called for clarity on the funding's origin. 

The treasurer's earlier commitment to funding wage increases from productivity savings has raised concerns about the integrity of the plan.