‘De facto wages cap by stealth’: NSW Greens seek to change Labor’s workplace bill

Photograph: Bianca de Marchi/AAP

The New South Wales government has been accused of imposing a “de facto wages cap by stealth” as it seeks to rush through industrial relations legislation during parliament’s final sitting week of the year.

Labor’s plan would restore sweeping powers to the Industrial Relations Commission, including the ability to act like a court, which the former Coalition government removed in 2011.

While broadly supporting the reforms, the Greens industrial relations spokesperson, Jenny Leong, will introduce an amendment to the bill that would ensure the effect of any of the commission’s decisions on low-paid workers was considered alongside the effect on the government’s finances.

“We are concerned that the proposed insertion of a provision requiring the industrial relations court to consider the NSW government’s fiscal outlook and position when exercising their functions runs the risk of imposing a de facto wages cap by stealth,” Leong said.

“As the cost of living crisis worsens, it is unacceptable for the industrial relations court to consider the budget position of the NSW government above the financial security and fair pay of public sector workers.”

The industrial relations minister, Sophie Cotsis, said the commission was already required to consider multiple factors when making a decision.

“This range of factors will now include the NSW government’s fiscal position and outlook and the need to recruit and retain skilled workers,” she said.

“To suggest anything else is either a basic misunderstanding of the law or a deliberate attempt to mislead the public.”

The public sector association secretary, Stewart Little, said the Greens’ concerns were “valid” but the reforms were overall “welcome and long overdue”.

“The fact that the former government withdrew the independence of the IRC really set about in causing the current crisis that we have in attracting and retaining frontline workers,” he said.

Prof Chris F Wright, a workplace expert at the University of Sydney who has provided advice to the NSW government, said the changes were reasonable and would still allow the IRC to be more flexible.

“The government’s economic position is something that needs to be taken into account … there’s not a bottomless pit of funds that’s available,” he said.

“I’d also like to see in there that the [IRC] needs to take into account principles of fairness and equity. They’re equally important. That should be specified too.”

Scrapping the public sector wages cap was one of Labor’s key election commitments. The Minns government announced in September it would set aside $3.6bn over four years for public sector pay rises.

The government will also use the final sitting week to process its housing reform agenda, introducing a change to planning laws to allow more types of homes to be built in more parts of Sydney.

According to the government, the changes could see a further 112,000 homes built by pushing councils to allow more duplexes, terraces and low and mid-rise apartment blocks to be built.

“Sydney is one of the least dense cities in the world but fewer than half of councils allow for low and mid-rise residential buildings in areas zoned for such homes,” the planning minister, Paul Scully, said.

“We’re confronting a housing crisis so we need to change the way we plan for more housing. We can’t keep building out. We need to create capacity for more infill, with more diverse types of homes.”

He pointed to inner-city suburbs including Wollstonecraft, Waverton and Erskineville as areas with a diversity of housing types near transport hubs that should be emulated.

“They’re great places to live. We just need more of them,” he said.

The government also hoped to pass its centrepiece climate change bill to enshrine in law greenhouse gas emissions reduction targets of 50% by 2030 and net zero by 2050.

Guardian Australia understands the government will bow to pressure from the Coalition and the crossbench and agree to a range of changes including to legislate an additional interim target of reducing emissions by 70% by 2035.

Other aspects of the climate bill were still being negotiated on Tuesday, including a push from the Greens for a provision holding the premier and climate change minister accountable for achieving the 2035 target.

The premier, Chris Minns, is expected to miss most of the week after coming down with Covid on Monday.