Psychiatrist body holds firm on 25% pay bid but NSW Health says shortages are ‘more nuanced'

The Guardian

20-06-2025

Closing submissions have been heard in the long-running dispute between psychiatrists – who are pushing for a 25% pay increase – and the New South Wales department of health, bringing to a close a landmark legal action brought by the psychiatrists, who argue psychiatric care in NSW is facing 'collapse' because of poor pay and conditions.
Over two days this week, the Industrial Relations Commission court in Sydney heard closing submissions from lawyers, before the full bench retired to consider their decision.
At the heart of the dispute is the proposition from the psychiatrists, represented by the Australian Salaried Medical Officers Federation (Asmof), that NSW staff specialist psychiatrists are significantly underpaid compared with their interstate counterparts.
This, they argued, has led to an exodus of qualified psychiatrists to other jurisdictions or the private sector, leading to drastic and dangerous understaffing of psychiatric units and overwork and moral injury of staff.
Asmof is arguing for a special levy to increase their pay by 25% to stem the flow of specialist doctors leaving the state's public system. In January, 206 psychiatrists in NSW threatened to resign; 62 have resigned, while others await the commission's decision.
In closing submissions Thomas Dixon, the barrister for Asmof, pointed the commission to evidence it had heard about the 'proliferation' of mental health patient presentations in the public health system in recent years, at the same time there has been a reduction in the number of public psychiatric specialists.
Dixon said that in the five years from July 2019, the number of staff psychiatric specialist vacancies in NSW increased from 35 full-time equivalent (FTE) roles to 131, a near 400% increase.
'Why is this occurring?' he asked the full bench. 'The reasons are many, including pay … stress, overwork and concern for patient outcomes. All of these factors were caused or exacerbated by staff shortages.
'Staff shortages are having a negative impact on the quality of patient care and integrity of the health system.'
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According to Asmof, psychiatrists are paid significantly more in states other than NSW. Salaries were up to 51% higher in Western Australia, 44% higher in the Northern Territory, 38% higher in South Australia, 28% in Queensland and 25% in Tasmania. They are 2% higher in Victoria, but Asmof said that in Victoria, as most psychiatrists do not work full-time, they are paid an hourly rate which amounts to 31% more than in NSW.
Dixon reminded the court of evidence it had heard that giving a pay rise to psychiatrists would actually end up costing the government less than its current policy, which was to fill gaps in staffing with locums or visiting medical officers (VMOs). Dixon said that a full-time staff psychiatrist cost the same as a VMO working at 0.6FTE.
Ian Neil SC, the barrister representing the secretary of health and the NSW department of health, argued that there was no evidence that increasing the pay of psychiatrists with a special levy would have any impact on the attraction and retention of staff, except for stopping those who had threatened resignation pending the outcome of the arbitration, which he urged the court not to consider.
'Asmof loaded up the gun and pointed it at our heads,' Neil said of the mass resignation threat. 'That ought not to be taken into account.'
Neil told the court that increasing the pay for psychiatrists by 25% in an interim 12-month order was problematic in that it meant the commission would have to keep that pay uplift in other award negotiations going forward, and that it would not address the issue that Asmof hoped it would remedy.
'Wage fixing is not an appropriate mechanism to address the problem of attraction and retention, of itself,' he said.
'The problem of workplace shortages … are a much more nuanced problem that requires a nuanced response.'
Neil was pushed by the justices to give an account of what the health secretary contended the solution was for the problem of attraction and retention, if not a pay increase, to which he said:
'There is no simple answer to that question because it's not a simple issue. It would be a simple issue if funds were infinite, it would be a simple issue if the source of trained staff specialist psychiatrists were infinite, but none of those propositions are true or realistic.'
The full bench has adjourned to consider its judgment.