No. 58

Why public servants always win

STONE the crows! With the way their achievements are always underrated, why would anybody be a public servant? For the money is the crows guess.

Of course this is not the way people in the public sector see it, considering themselves put upon by government and traduced by media hacks and business lobbies.

They have a point. The policy elites have not had a good wrap since Gough Whitlam proclaimed public servants the shock troops of social democracy. In 1973 he legislated an extra week of leave for the Commonwealth public service arguing:

In the early years after federation, employees of the Commonwealth Public Service set a standard for the rest of Australia in conditions of employment. Their minimum of three weeks of annual recreation leave gave them an advantage over most other employees in Australia. This advantage has long since disappeared, and my Government is determined to restore it. We want the national Government to continue to set the pace in improving the working conditions of Australians.[i]

This all but automatically ensured the enmity of a generation of other Australians. And over the decades Canberra’s mandarins and their minions got used to the idea they were absolutely unloved.

During the Howard years, academic Judith Brett argued that public employees never received the respect they deserved, especially after the public sector cuts of the mid 1990s:

Many of the men and women forced out of the public sector by various downsizings felt justifiably bitter at the rejection of the meaning of their life’s work and the contribution they felt they had made to the common good [ii]

And now the idea of public service is on the nose all over the Anglosphere. In the US, the only thing that upsets retired Tea Party types is the money that they want spent on their healthcare and social security being spent on civil service pensions, which often sit on state government books unfunded by a third.[iii] “Public sector unions have become a labor aristocracy and they are bankrupting states and municipalities,” thunder Fred Siegel and Dan DiSalvo.[iv] And, in the UK, the Cameron-Clegg government wants to cut civil service costs by 30 per cent over two years, meaning tens, perhaps hundreds of thousands have to go.[v]

But the crows reckon they won’t.

While nearly 90 per cent of UK central government managers have stopped hiring and frozen pay, only 8 per cent are sacking staff.[vi] In the US stringent staff cuts are selective. State and local governments are cutting back on librarians and public recreation workers, whatever they do, while leaving the cops and teachers alone.[vii] In part this is because politicians do not want to cut essential services, but it is also because they dare not take their unionised workers on.

The Economist explained what is going on all over the developed world in a cover story that enumerated extraordinary examples of public employee unions delivering privileges the taxpayer cannot afford, “as providers of vital monopoly services they can close down entire cities. And as powerful political machines they can help to pick the people who sit on the other side of the bargaining table.[viii]

This is the very reason that the Australian public sector will neither shrink permanently, nor lose its privileged pay and conditions. It’s not that there are many of them, it’s where they work and what they do. Overall, about 15 per cent of the labour force was in general government employment in the middle of the last decade, about the same as in the UK and US.[ix] And most of them worked for the states. No one seems to know just how many people are on the federal payroll, the Public Service Commission says there were 164,000 Commonwealth public sector employees last year, Treasury reckons there were 258,000.[x] Whatever the number, it is dwarfed by the 1.6 million state and local government payroll.[xi]

And that means they are involved in service delivery not social engineering, working in essential positions in the states, as teachers, police and nurses, many of whom are unionised. Some 46 per cent of public servants are union members compared to 14 per cent of private sector workers.[xii] Which is why they are getting more expensive to employ.

From 2001 to 2008, more and better-paid state public servants cost the country an extra 9 per cent per annum, with total employment costs increasing from $43 billion to $77 bn.[xiii] The ABS puts the figure even higher, $98bn by 2010. [xiv] This had less to do with improved productivity than the ability of state governments to cough up courtesy of GST revenue – that and the blind terror that afflicts premiers at the thought of striking nurses, police and teachers.

In getting upset at persecution of the policy elites (not that there is much of it around at the moment), Professor Brett missed the point – the public servants who are all but immune to the economy or small government rhetoric are not writing reforms in Canberra, they are working in the states.

And they are too powerful to take on. Look what happened to Morris Iemma when he upset a few thousand electricity workers. And what occurred in South Australia last year when Premier Mike Rann and Treasurer Kevin Foley tried to vary government workers’ leave loading and long service. Public sector union chiefs were outraged – and when they fulminate Labor listens, to the extent that Mr Foley seems certain to stand down as treasurer and deputy premier.[xv]

No wonder conservatives claim there is more self than public service among government union leaders.

Stephen4@hotkey.net.au

ENDNOTES


[i] E G Whitlam, second reading speech transcript, Public Service Bill 1973, House of Representatives, March 13 1973, Whitlam Institute, record number 000010551 @www.cem.uws.edu.au  recovered on January 17

[ii] Judith Brett, Australian Liberals and the Moral Middle Class: From Alfred Deakin to John Howard, (Cambridge University Press, 2003), 174

[iii] Ben Elgin and ors, “The political rumble over public pension costs”  Business Week, October 13 2010

[iv] Fred Siegel and Dan DiSalvo, “The new Tammany Hall” Weekly Standard, October 12, 2009,

[v] Polly Curtis, “Spending review: civil service cuts worse than feared,” The Guardian October 20 2010

[vi] Carol Lewis, “Doing more with less can be a positive experience,” The Times, January 14 2011

[vii] Donald J Boyd,  “State/local employment up slightly since start of recession, but cuts are now underway,” Fiscal Studies, August 20, 2009

[viii] “(Government) workers of the world unite!” The Economist, January 8 2011

[ix] OECD, Government at a glance 2009 @www.oecd.org/dataoecd/59/28/44251675.pdf recovered on January 21

[x] Parliament of Australia, Parliamentary Library, “How many are employed in the Commonwealth public sector?” November 26 2010 @ www.aph.gov.au/library recovered on January 22

[xi] Australian Bureau of Statistics, “Employment and Earnings, public sector, 2009-2010,” @www.abs.gov.au/ausstats/abs@nsf/mf/6248.0.55.002 recovered on January 22

[xii] ABS, “Employee earnings, benefits and trade union membership, Australia August 2009,” @abs.gov.au/ausstats/abs@.nsf/Latestproducts/6310.0Main%20Features2August%202009? recovered on January 23

[xiii] Julie Novak, “A growing risk: the impacts and consequences of rising state government employment,” Institute of Public Affairs, 2009

[xiv] ABS ibid

[xv] Michael Owen, “SA premier Mike Rann breached Fair Work laws, says ACTU chief, The Australian, November 9, 2010, Adam Todd and Daniel Wills, “Kevin Foley flags readiness to stand down,” Adelaide Now, January 11 @ www.adelaidenow.com.au/news/south-australia/foley-challenges-backbenchers-to-put-up-or-shut-up/story-e6frea83-1225984921684 , recovered on January 22

'2012