Government "thirst for hiring public servants"

Thursday 28 July, 2016 | By: Nick Behrens | Tags: full time employed, youth unemployment, public servants, State Budget;

The Chamber of Commerce and Industry Queensland (CCIQ) has crunched the numbers in respect to public servant numbers and the results are startling.

With 65 cents in every dollar provided to State Government coming from the pocket of a business and 46 per cent of the State Budget allocated to employee-related expenses, Queensland businesses are wanting to see better management of taxpayer dollars.

FACTS

As at the 30 June 2016, State Budget Paper No 2 estimates full time equivalents (FTEs) to stand at 209,999 – compared to 199,719 at 30 June 2015.  That is an increase of 10,280 FTEs across the 12 month period.

This compares to an increase in Queensland’s total employed persons across the same period of 10,395.

The 30 June 2016 FTEs were  7212 higher than the 202,787 originally forecasted in Treasurer Curtis Pitt’s first State Budget.

Employee related expenses in 2015-16 compared to 2014-15 have risen by $1.363 billion.  Again this is higher than the increase of $999 million forecasted in his first Budget.

In 2015-16 the State Government spent $19.956 billion on employee related expenses – an increase of 7.3 per cent. 

State Government FTE headcount is forecast to increase by another 5088 to 215,087 or by 2.4 per cent.  Corresponding employee related expenses are forecast to increase by $974 million or 4.9 per cent. 

Population growth according to the State Budget Papers is forecast to grow by 1.5 per cent in 2016-17.  With FTEs increasing by 2.4 per cent this makes it extremely unlikely that the State Government will be able to achieve its new fiscal principle of overall growth in FTEs on average over the forward estimates, not exceeding population growth.

CCIQ VIEW ON FISCAL MANAGEMENT

Clearly the State Government is struggling to manage headcount and employee related expenses.  The State Government’s fiscal credentials are on the line and it needs to improve its performance in this area.

Unfortunately with such a rapid rise in headcount the damage has already been done.  Further increases only service to dramatically compound the problem.

CCIQ is concerned that the undisciplined growth in employee related expenses will inevitably give rise to the need to increase taxes.  This has already been alluded to by the Treasurer in the first week of June this year when he stated Queensland will need to have a ‘conversation’ around taxes after this term of Government.

At present we are seeing aggressive initiatives by other States to improve the competitiveness of their taxation regimes. (Both Victoria and WA increased their payroll tax exemption thresholds and SA and NSW have removed business stamp duties).

The Queensland business community has a particularly strong interest in this issue providing 65 cents in every dollar to the State Government.  If taxes are to increase past politics indicates that businesses will bear the brunt of it.  At most the business community represents only 417,000 voters compared  to the 2.7 million who turned out at the last State election. 

One could be forgiven for thinking that the increase FTEs if indeed a conscious decision is more a strategy around ingratiating the Government to unions such as the Police, Teachers, Nurses and Together Union .

The State Government has argued that this increase represents the actioning of election promises to restore frontlines services.  On this basis CCIQ wants to see clearly defined improvements in service delivery as measured by KPIs.  What is the commensurate improvement in student outcomes, patient health and community safety that we are entitled to expect?

CCIQ ECONOMIC MANAGEMENT OBSERVATIONS

The State Government’s growth in FTEs is quite simply at odds with what has happened to Queensland’s labour market.

The increase of  10,280 FTEs in the public service nearly entirely accounts for the increase in the Sunshine State’s total employment numbers across the past 12 months.  Between June 2015 and June 2016 total employment in Queensland has risen by only 10,395 jobs.

That is to say that total employment in the most recent 12 months for Queensland has almost entirely been propped up by the State Government. 

Indeed Queensland’s unemployment rate would be much higher than 6.5 per cent as is currently stands and would almost certainly be higher than 6.6 when it came into office if these public sector jobs had not have created.

However the role of the State Government is not to be provider of jobs – its role is to provide services to the people of Queensland in the most effective and efficient basis possible.

There are far better Government employment strategies, such as increasing the payroll tax exemption threshold with creates instantly 4000 jobs costing only $235 million.

On a cost benefit outcome this offers a far better bang for buck than increasing headcount without coinciding and measurable improvement in Government services.

MEDIA COVERAGE

AM Radio 4BC, Brisbane, Drive, Ben Davis (July 28)

Interview with Nick Behrens, Chamber of Commerce and Industry Queensland, about how the business sector is reacting to the public sector. Davis says that he has spoken at length over the past few months about the Queensland Government's "thirst for hiring public servants", saying it "is almost a binge that they're on". Davis says that this year's Queensland Budget revealed that the Government have hired 4100 more than they had planned for, and this year they plan to hire another 5088. Davis says that this will take the public service wages bill to $20b for the first time. Davis says that today's Courier Mail has done an analysis of Australian Bureau of Statistics figures that shows that 80 per cent of new jobs created in Queensland over the past year were public service jobs. Behrens says that the economic backdrop to the rise in public service numbers is a difficult one for Queensland’s domestic economy. Behrens says that employers are reluctant to take on employees because the economic activity is not there. Behrens says that the Queensland Government's Advance Queensland will deliver very good economic stimulus to the economy in the medium and long term, but says more needs to be done for now.

COURIER MAIL (July 28)

file:///M:/CQ/Media/Press%20Release/2016/July/Courier%20Mail%20report.pdf

 

 

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