The Australian state of Queensland's AA1 credit rating has been downgraded from stable to negative by international ratings agency Moody's Investors Service, and is unlikely to revert any time soon to its former AAA rating.
Thousands of public employees in Queensland are in danger of losing their jobs following a state Commission of Audit finding that the previous government employed 20,000 more workers than it could afford.
Queensland Premier Campbell Newman disclosed the audit findings to indicate the cost-cutting measures that residents should expect in the coming months. Ahead of the actual budget reductions, the new premier ordered all department heads to review their expenses with the aim of finding areas for savings to reduce the state debt which is in the vicinity of $100 billion.
"Part of that process is to review all non-frontline temporary arrangements. This will happen on a case by case basis by directors-general of agencies," Sunshine Coast Daily quoted Mr Newman.
He said that the decisions of the state government in determining the right size of public service would be made as part of the lead-up to the announcement of the public budget in September. He assured workers that the over-riding objective would be to keep as many jobs as possible.
John Battams, president of the Queensland Council of Unions, warned that by axing many permanent and temporary public sector jobs would take about $108 million yearly from the state's economy.
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During the campaign, Mr Newman promised Queensland voters that there would be no forced redundancies for public servants. To protest the premier's apparent renege on his campaign promise, several industrial actions are being planned by the unions as state workers also seek fair pay.
The government offered public workers a 2.2 per cent pay increase, considered the lowest deal yet. Union secretary Alex Scott urged members not to sign the agreement since it is tantamount to a 1 to 2 per cent pay cut.
Teachers, who were offered a 2.7 per cent pay raise, held a rally outside Queensland's Parliament on Wednesday, while other public employees have threatened to strike. On Friday, nurses and midwives rejected a 3 per cent pay hike offer from the state government.
Firefighters, however, had gone one step ahead and filed a notice of industrial action beginning Aug 1.
"We're not saying they're going to go, but when unions start to make pay cases and say they want more, well I'm afraid that makes it even harder to save those jobs," Mr Newman was quoted by Courier Mail.
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