The Australian Greens want to lift Australia out of its wages slump in the most straightforward way possible. They want to pay public servants more.
Greens treasury spokesman Peter Whish-Wilson has asked the Parliamentary Budget Office to lift public service public service wages by 4 per cent per annum.
The increase would apply only to non-executive public servants below the classification executive level 1. It would run for five years. The extra funding given to departments to pay it would be exempt from the efficiency dividend.
The Parliamentary Budget Office costing, published on its website with permission from the Greens, puts the cost for the first three years at $963 million.
It also cost a more expensive proposal to lift public service wages by 5 per cent per annum at $1.3 billion over the first three years.
In each case the cost was net of the increased tax revenue the wage increases would produce.
Wages growth has been barely above the rate of inflation at or near an all-time low of 2 per cent for two years.
Reserve Bank governor Philip Lowe has nominated low wage growth as one of his biggest concerns.
Treasurer Scott Morrison has said the best way to achieve it is to usher in a sustained improvement in profits and productivity.
Senator Whish-Wilson said a simpler way to create wage growth would be increase wages for the public servants the Commonwealth pays.
The government itself had acknowledged that public sector increases lead to private sector increases, warning in the past of a "wages breakout" if its own wage bill climbed too fast.
He said everyone from the Reserve Bank governor down was effectively calling for wages breakout.
High income public servants on "obscene" salaries above $420,000 would have their salaries brought down to $420,000.
"There is no reason why any public service agency boss should be paid more than the prime minister full stop," he said.
