Senator McKENZIE (Victoria) (21:48): Thank you, Senator Moore, for that contribution. I wish to refer to a story published online in this evening's Canberra Times which reports claims by Labor's employment spokesman, Brendan O'Connor, that the public sector wages bill outlined in Tuesday's budget will force a wage freeze or further public sector job cuts: The public sector wages bill, which is forecast to increase by only 1.49 per cent by 2018-19, suggests a wage freeze or thousands more public sector workers sacked by 2018-19, Mr O'Connor said in a statement. This is utter nonsense. The budget provides for indexation of departmental funds in the same way that all governments have indexed those funds in previous budgets. There is no secret plan to use indexation as a new tool for job reductions and no 'wage freeze', as Labor alleges. The wages and salaries for agencies are a product of the same indexing methods that were used in previous budgets under successive governments. The wage cost indexes were introduced 20 years ago by the Keating government under the principle that the budget does not fund wage increases that should be met from productivity gains. Under the Commonwealth's wage cost indexes the departmental costs of agencies are inflated each year using the consumer price index as the basis for increasing supplier costs. Wage costs are indexed using decisions by the Fair Pay Commission in the national minimum wage award, expressed as a percentage of the latest estimate of average weekly ordinary time earnings. The wage indexation factor is averaged by taking data from several years so that a low decision by the Fair Pay Commission in any one year will not distort the outcome. That is exactly how Labor indexed agency funding when they were last in government, and it is the same method of indexation as in last year's budget and—no surprise—the same method used in this budget. Inflation is expected to be lower in the coming year and wages in the broader economy are moderate this year; that is why indexation for the public sector is, very appropriately, moderate this year. As has been done in previous years, the indexed funding of agencies is discounted by the efficiency dividend. The efficiency dividend being applied this year is identical to what it was last year. The largest part of this efficiency dividend is the increase announced by Labor in their 2013 economic statement, which equated to over 1,600 job cuts that were taken from the budgets of agencies before Labor left office. It is utterly untrue for Labor to claim that this budget includes thousands of new job cuts hidden in the indexing arrangements of agencies. The funding and the job numbers in the general government sector are reconciled, and the budget shows a reduction of only 76 public sector jobs this year. In short, Mr O'Connor's claims are complete and utter rubbish. Once again, Labor is simply scaremongering and doing so on the back of falsehoods, not on the basis of facts. Unfortunately, Mr O'Connor has a long history of this sort of basing public comments on falsehoods rather than fact. He claimed that 1.5 million Australians 'rely' on the minimum wage, which is completely false. According to the ABS, across Australia there were 157,000 employees paid the national minimum wage rate, not 1.5 million. Maybe he just got his decimal point in the wrong place. Mr O'Connor also claims that 4.5 million Australians 'rely' on penalty rates to 'make their living'. This repeats an ACTU claim in a report which goes on to say: We don't know exactly how many Australians are paid penalty rates each week under their awards and agreements or the total value, as it depends on what hours they work and their rate of pay. And who could forget Mr O'Connor embarrassing himself by criticising the reporting and disclosure requirements applicable under the government's proposed Fair Work (Registered Organisations) Amendment Bill 2013, but failing to grasp that the requirements of which he complained were in fact legislated by Labor? I could go on all night, Acting Deputy President Back. I do not need tell you, though; you have been there as chair of the Senate Standing Committee on Education and Employment. You know all too well what I am talking about. But while on the subject of misrepresentations, I turn to some pre-budget speculation about the impact of the budget on Canberra's public servants. On Monday, a joint media release from ACTU President Ged Kearney and CPSU Secretary Nadine Flood, claimed: Just today the Government has announced even more public sector job cuts to the tune of a further $450 million. It is a total fabrication—another total fabrication. Senator Gallagher tweeted a link to a completely erroneous Canberra Times article headlined, 'It's open season on public servants—again,' adding the words, 'Take cover.' I would like to have added '#scaremonger', but obviously I was not the one tweeting. The shadow minister for employment, Mr O'Connor, accused the government of announcing more cuts to jobs, despite this not being the case, and accused the Prime Minister of 'a bald faced lie' for assuring the ACT Chief Minister the worst job cuts were behind us. But the prize for the most blatant misrepresentation goes to the new senator for the ACT, Senator Gallagher, who was asked in her Tuesday doorstop about 14,000 of those cuts being already implemented under Labor. What was Senator Gallagher's response? She said, 'Well, that figure has never been supported. I mean, that is, the Coalition, I think, did a report and did some research and came up with that figure. It is not a figure that has been accepted.' Now let's, for a moment, cast our minds back to November 2013, when the finance department secretary confirmed that savings and reductions implicit in Labor's 2013 Pre-election Economic and Fiscal Outlook would reduce the Public Service by 14,500—an estimate which had never previously been released. What did Senator Gallagher say, in her role as then Chief Minister, the following week when she gave an interview to ACT 7.30? She said, 'There were job reductions that were starting under the federal Labor government. There's no doubt about that, and we're seeing some of the figures around that coming through now.' So much for consistency! The irresponsible and self-serving scaremongering indulged in this week by Senator Gallagher and her Labor and union associates has been truly breathtaking. The coalition will never shy away from improving efficiency in the Australian Public Service, but this budget keeps the government's commitments. In her doorstop on Tuesday, Senator Gallagher also said that Canberra 'has already taken thousands of job cuts, particularly in the last 12 months, and the city is really feeling it.' She said, 'We have put our shoulder to the wheel and we have suffered under the last Abbott budget and it looks like this one is going to hit Canberra again.' But when asked by ACT 7.30 whether Canberrans should hold their nerve in the face of job cuts, back in November 2013, Senator Gallagher said: I guess the message I'm trying to say is that Canberra is quite a different city to what it was back in 1996. ... I'm trying to send out a message of optimism. While we'll see some impact from the job reductions in the Commonwealth—there's no doubt about it—but the city is different. We have a larger economy. The role that the universities are playing is quite different now than it was back then. And there are some really good reasons to have confidence in the ACT going forward ... So Senator Gallagher has not only reversed the responsible position she took on job cuts as Chief Minister, but become infected by Mr Shorten's pessimism and opportunism. On this point I note the comments of the Canberra Business Chamber, which issued a press release headlined, 'Budget brings back confidence to Canberra'. But there is one thing for certain. The greatest threat to public service jobs is if the CPSU were to succeed in its 12.5 per cent pay claim over three years. This would put at least 10,000 more public servants out of work. This is what Labor's employment spokesman, Brendan O'Connor, should actually be highlighting if he really cares about the workers, and the CPSU would be doing the same. Their excessive wage claim can only be paid for by cutting jobs. So, given the performance of the CPSU, the ACTU and local Labor politicians over the last two days, who could ever trust anything they say on wage bargaining? As we go forward with public service wage bargaining, the minority of the public servants who are union members should seriously consider whether CPSU is representing their best interests. And the CPSU should stop standing in the way of the vast majority of public servants and the responsible pay rises on offer.