As the private sector slumps, governments must step up and be good bosses

The Northern Territory election last weekend was, according to News Corp and Sky News, a further demonstration of another plague confronting our country: a bloated bureaucracy, where workers are shielded from the pandemic pain of their private sector counterparts (and vote accordingly).

It is becoming a common complaint among conservatives that public servants are getting off scot-free during the coronavirus when they should be just as miserable and impoverished as the rest of us.

Liberal MP Craig Kelly recently used valuable parliamentary committee time with the RBA governor to complain that university graduates may consider entering the public service instead of private enterprise because of greater pandemic job security.

This followed recent analysis from the Institute of Public Affairs (IPA) suggesting that senior public servants should take a 20% pay cut.

“It is clear that we are not all in this together,” IPA research fellow Cian Hussey said. “There is no concept of shared sacrifice amongst the public sector workforce.”

Sky News’ Paul Murray made similar comments about the ABC, claiming the public broadcaster’s pay rises offended his grieving commercial media colleagues (conveniently forgetting the massive ongoing layoffs at Aunty).

Such fervour is presumably stoked by recent ABS figures showing the coronavirus is hitting the private sector harder than the public sector. This disparity should come as no surprise: more public sector employees are considered essential, and their workload has grown.

Indeed we should be thankful that despite the various waves of privatisation and austerity inflicted on our public institutions, they remain some of Australia’s largest employers whose stability can help offset the haemorrhaging private sector.

Public sector growth is the only thing that stopped us going into recession well before the pandemic hit. Sensible Keynesian economics suggests governments should now speed up this growth to fill the private sector void, employing people who can later rebuild the private sector as consumers.

Yet these supposed libertarians are ironically mirroring their usual caricature of socialism, advocating government imposed “levelling down” of incomes based purely on envy. The “sacrifice” they expect of public servants would needlessly inflict more economic pain simply to “even things out”, like a doctor treating a patient’s broken leg by shooting a hole in the other one.

 Such recommendations would be laughable were they not often implemented. While giving unprecedented stimulus payments to businesses and households, federal and state governments have been far more frugal towards their own staff.

With the public sector now of central importance to economic recovery, it is worth considering whether governments are using their power as major employers to aid the stimulus effort or undermine it.

Public pay days and bureaucratic bloodbaths

The Victorian government recently gave public servants a pay rise worth more than 3% as compensation for redeploying many staff to priority areas.

The deal was predictably lambasted by discredited ratings agencies and the Daily Mail, who singled out paid leave for gender transitions and Indigenous bureaucrats for some culture war hysteria.

On Saturday the Health Workers Union challenged the Andrews government to go further, demanding Victoria’s front-line workers get a 4.5% raise.

“Our public hospital workers are among the lowest paid Victorians,” its state secretary, Diana Asmar, said. “Don’t call them front-line heroes and then pay them peanuts.”

The demand sets up a potential conflict with Spring Street, which was trying to keep pay rises under 2% before the pandemic.

The jobs of 120 federal public servant were saved last week when plans to close the ATO’s Geelong office were scrapped after pressure from community groups, the city council, the Community and Public Sector Union and local MPs from both major parties.

Conversely, the NSW government is still pursuing a wage freeze for all public sector workers — including front-liners — in the Industrial Relations Commission, after it was rejected by the state’s upper house.

Former Business Council head Tony Shepherd may have channelled JFK in support of the austerity measure, but economists from Treasury, consultants, unions and think tanks have all found that the knock-on effects of reduced spending will exacerbate the state’s subdued demand.

Similar pay freezes have been implemented in Tasmania and Western Australia (since before the pandemic hit), while the Queensland government walked back a pay freeze to a deferral, made it easier to fire staff for underperforming, and converted more casuals to permanent contracts.

The ACT government recently added 120 places to its graduate program to address youth unemployment. The same day, the South Australian government rejected a union proposal for equal paid parental leave for heterosexual fathers. They receive only two weeks compared with mothers and gay couples who get 16 to 20.

Add to this job losses at the CSIRO, and our government employers look just about as mediocre as our private sector ones.

Ministers are bosses too

Some state governments face genuine fiscal barriers, but there are options other than austerity. State leaders can raise taxes such as rezoning charges on property developers, or pressure the Morrison government to stop quibbling over the pandemic bill and lend a fiscal hand.

Governments are employers too, and never has this role been more important. They must lead the recovery, not start a self-effacing spiral that rips money out of the economy when we sorely need it.