❓ Treasurer Nahan answers a question about Treasury's Perth CPI forecast, stating it's 1.25% for 2016-17 and defends the government's wage policy tied to CPI, highlighting expenditure control and wage negotiations. The response is met with interjections and points of order from the opposition.
AnsweredQoN 589Legislative Assembly
QuestionView source ↗
CONSUMER PRICE INDEX — TREASURY FORECAST
589. Mr C.D. HATTON to the Treasurer:
Can the Treasurer please update the
house on its latest advice from Treasury on its forecast for the Perth consumer
price index?
589. Mr C.D. HATTON to the Treasurer:
Can the Treasurer please update the
house on its latest advice from Treasury on its forecast for the Perth consumer
price index?
AnswerView source ↗
I thank the member for the question.
As the member knows, since 2013–14 our wages policy has been tied to
the consumer price index. Members opposite criticised it and said we would
never do it and could not do it. All agreements that we have achieved during
that period are tied to the CPI. It is very important because the key to
restraining expenditure growth is wages, not only directly with employees in
the public service. Public service wages are also tied to the non-profits to
which we contract services. It is about 60 per cent of the cost, so it is very
important. That is a crucial factor. Those turned out to be generous. We
systematically overestimated CPI, so the fireys and the police got a four per cent
real increase over the past three years to 2015–16. Members will
remember that in February this year—then locked in the budget—we
revised our policy to 1.5 per cent increases. We did that for a number of
reasons. We needed to tighten up expenditure growth. We also saw that around
the world treasuries were overestimating CPI. We are going through a period of
deflation, not only here but around the world. We thought that would be a fair
one. Treasury's forecast for inflation—Treasury makes those
forecasts—of 1.75 per cent appeared to everyone, and we heard screams
on the other side of the house, that we were giving the public servants with
1.5 per cent a real reduction in wages. Since then, data has come out on both
CPI, two quarters, and also some commonwealth data, to show that, as suspected,
CPI is going down. For 2015–16 it averaged one per cent. Treasury now
forecasts inflation for this year, 2016–17, to be 1.25 per cent. Our
policies were very appropriate both in restraining expenditure growth and predicting
the future. Our 1.5 per cent targets are a real increase in wages. I am really
pleased to state that we are in a number of negotiations, including with the
Health Services Union, which has agreed to a 1.5 per cent wage increase. We are
having positive outcomes in other negotiations. People opposite have been
screaming about fiscal management. That is a measure of good fiscal management—controlling
wages. When we came to government, the salary bill was growing at 12 per cent a
year.
Several members interjected.
The
SPEAKER : Member for Cockburn!
Dr
M.D. NAHAN : We have now put in place and have been operating for a number
of years restraints on wages and expenditure growth. We are predicting the
price, and that is good fiscal management. Can members imagine what Labor would
do? No, the union people who put them in power —
Point of Order
Mr B.S. WYATT : I wonder whether
the Treasurer could reflect on the success of the government's wages
policy in the first term of the Barnett government for us.
The SPEAKER : That is not a point
of order. That is some kind of surreptitious question. I would like you to wind
this up in one minute, because we have run out of time.
Questions without Notice Resumed
Dr
M.D. NAHAN : Relative to their mess at 12 per cent a year —
Point of Order
Mr B.S. WYATT : I have a point of
order.
The SPEAKER : Sit down. I want
you to answer the member for Balcatta's question. I want to move on.
Questions without Notice Resumed
Dr
M.D. NAHAN : Back to the question. Imagine —
Mr
W.J. Johnston interjected.
The
SPEAKER : Member for Cannington, I call you to order for the second time.
Dr
M.D. NAHAN : Imagine that Labor was in government—I know it sends quivers
down you—and trying to control wages —
Several members interjected.
Point of Order
Mr B.S. WYATT : I wonder whether
the Treasurer could confirm that in the first term of the Barnett government,
it increased its wages policy by more than 50 per cent.
The SPEAKER : I call you to order
for the first time, member for Victoria Park, for bringing spurious points of
order. Treasurer, you have 30 seconds to wind this up.
Questions without Notice Resumed
Dr
M.D. NAHAN : Imagine Labor was in government, a party owned by the union —
Mr
W.J. Johnston interjected.
The
SPEAKER : Member for Cannington!
Mr
B.S. WYATT : I have a point of order, Mr Speaker.
Mr
W.J. Johnston interjected.
The
SPEAKER : Member for Cannington, I call you to order for the third time. I want
to warn you that if you rise with a spurious point of order, I am going to call
you to order. That concludes question time.
As the member knows, since 2013–14 our wages policy has been tied to
the consumer price index. Members opposite criticised it and said we would
never do it and could not do it. All agreements that we have achieved during
that period are tied to the CPI. It is very important because the key to
restraining expenditure growth is wages, not only directly with employees in
the public service. Public service wages are also tied to the non-profits to
which we contract services. It is about 60 per cent of the cost, so it is very
important. That is a crucial factor. Those turned out to be generous. We
systematically overestimated CPI, so the fireys and the police got a four per cent
real increase over the past three years to 2015–16. Members will
remember that in February this year—then locked in the budget—we
revised our policy to 1.5 per cent increases. We did that for a number of
reasons. We needed to tighten up expenditure growth. We also saw that around
the world treasuries were overestimating CPI. We are going through a period of
deflation, not only here but around the world. We thought that would be a fair
one. Treasury's forecast for inflation—Treasury makes those
forecasts—of 1.75 per cent appeared to everyone, and we heard screams
on the other side of the house, that we were giving the public servants with
1.5 per cent a real reduction in wages. Since then, data has come out on both
CPI, two quarters, and also some commonwealth data, to show that, as suspected,
CPI is going down. For 2015–16 it averaged one per cent. Treasury now
forecasts inflation for this year, 2016–17, to be 1.25 per cent. Our
policies were very appropriate both in restraining expenditure growth and predicting
the future. Our 1.5 per cent targets are a real increase in wages. I am really
pleased to state that we are in a number of negotiations, including with the
Health Services Union, which has agreed to a 1.5 per cent wage increase. We are
having positive outcomes in other negotiations. People opposite have been
screaming about fiscal management. That is a measure of good fiscal management—controlling
wages. When we came to government, the salary bill was growing at 12 per cent a
year.
Several members interjected.
The
SPEAKER : Member for Cockburn!
Dr
M.D. NAHAN : We have now put in place and have been operating for a number
of years restraints on wages and expenditure growth. We are predicting the
price, and that is good fiscal management. Can members imagine what Labor would
do? No, the union people who put them in power —
Point of Order
Mr B.S. WYATT : I wonder whether
the Treasurer could reflect on the success of the government's wages
policy in the first term of the Barnett government for us.
The SPEAKER : That is not a point
of order. That is some kind of surreptitious question. I would like you to wind
this up in one minute, because we have run out of time.
Questions without Notice Resumed
Dr
M.D. NAHAN : Relative to their mess at 12 per cent a year —
Point of Order
Mr B.S. WYATT : I have a point of
order.
The SPEAKER : Sit down. I want
you to answer the member for Balcatta's question. I want to move on.
Questions without Notice Resumed
Dr
M.D. NAHAN : Back to the question. Imagine —
Mr
W.J. Johnston interjected.
The
SPEAKER : Member for Cannington, I call you to order for the second time.
Dr
M.D. NAHAN : Imagine that Labor was in government—I know it sends quivers
down you—and trying to control wages —
Several members interjected.
Point of Order
Mr B.S. WYATT : I wonder whether
the Treasurer could confirm that in the first term of the Barnett government,
it increased its wages policy by more than 50 per cent.
The SPEAKER : I call you to order
for the first time, member for Victoria Park, for bringing spurious points of
order. Treasurer, you have 30 seconds to wind this up.
Questions without Notice Resumed
Dr
M.D. NAHAN : Imagine Labor was in government, a party owned by the union —
Mr
W.J. Johnston interjected.
The
SPEAKER : Member for Cannington!
Mr
B.S. WYATT : I have a point of order, Mr Speaker.
Mr
W.J. Johnston interjected.
The
SPEAKER : Member for Cannington, I call you to order for the third time. I want
to warn you that if you rise with a spurious point of order, I am going to call
you to order. That concludes question time.
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