NSW teachers have refused to rule out further industrial action after winning a pay rise of 12per cent over two years.

The increase, granted yesterday by the Industrial Relations Commission, will cost the Carr Government $700million a year. But theNSW Teachers Federation said it was bitterly disappointed.

The union, which wanted a 25per cent increase in salaries and allowances for the state’s 80,000 public school and 25,000 TAFE teachers, said the raise was not enough to attract more teachers or increase the status of the profession.

Federation president Maree O’Halloran said there was no doubt “the evidence before the Industrial Relations Commission presented, in their own words, a compelling case for a salary increase”. “I definitely cannot rule out further industrial action,” she said.

The commission yesterday awarded a 6.5per cent increase to be introduced in two tranches of 3per cent and 3.5per cent from July 1 this year and January 1, 2005.. This is on top of an interim 5.5per cent increase handed down in December.

NSW teachers will now have a starting salary of $46,235, rising after eight years to $66,348. Principals will receive $106,959.

Education Minister Andrew Refshauge described the decision yesterday as fair.

“We have always agreed that teachers deserve a pay rise,” Mr Refshauge said. “Today’s decision means NSW teachers remain thehighest-paid in the country, with wage rises amounting to 53.9per cent since 1996.”

Ms O’Halloran said the outcome for teachers had been reduced by the Carr Government’s interference in the case — the NSW Industrial Relations Minister was given status as an “intervenor”