Daniel Andrews’ bureaucratic blowout can’t be undone by Allan govt’s public sector cuts
The weak response from Daniel Andrews’ successor to the clear and measurable problem of ever-expanding government bureaucracy highlights that while Dan may have left the building, his influence still looms large.
The Allan government’s promised public service cuts barely make a dent in the significant bureaucratic blowout Daniel Andrews left in his wake.
On Thursday, the state government released the final report of Helen Silver’s review into the Victorian public service. It contained 52 recommendations, including a reduction of 2000 public sector jobs, the closure of 78 public entities, and shutting 90 state boards and committees.
In response the Allan government committed instead to cut 1000 jobs and save a mere $1bn.
Let’s put these numbers into perspective: in 2014, the year the Andrews Labor government came to power, the size of the Victorian Public Service was a touch over 36,000. By 2019, it tipped over 50,000 and at the time Andrews resigned, it was over 57,000 – a 60 per cent increase in less than a decade.
Remember, this is not frontline government service workers like nurses, teachers and police. This is the VPS – departmental and administrative staff of the government – spin doctors and bureaucrats. And this does not even include the administrative staff employed in state government entities outside the formal VPS definition.
This explosion in the size of the government is one of the reasons Victoria has been economically flattened over the past decade. On all critical indicators of financial management, such as debt, taxation, and regulation, Victorian has been the worst performing state by a wide and growing margin for some time now.
The pummelling of business conditions in the state has been matched by a similar degradation of living standards. Recent analysis shows that Victorian disposable income, which was on a par with other advanced economies ten years ago, was 15 per cent below the OECD averages by 2023.
The weak response from Daniel Andrews’ successor to the clear and measurable problem of ever-expanding government bureaucracy highlights that while Dan may have left the building, his influence nonetheless looms large.
A new book, The Dark Legacy of Daniel Andrews, produced by the Institute of Public Affairs, details the longstanding consequences of the Andrews era, which has left Victoria with a disregard for basic personal and political freedoms; a dramatically expanded government where extraordinary power was centralised in the premiers’ office; and a calamitous public debt that may never be repaid.
This new, forensic analysis of one of Victoria’s most turbulent periods is vital, as the promised inquiries into the state government’s actions have either never materialised or have been marred by witnesses simply refusing to answer basic questions about their behaviour.
The accumulation and exercise of extraordinary power was made most clear during the pandemic – a period we cannot forget, much as we would like to. How Andrews exercised arbitrary power to criminalise everyday life and impose the world’s longest lockdown without accountability or oversight – to the point of parliament being closed for extended periods of time – was a symptom of his longstanding hostility to individual freedoms and a chronic overuse of the criminal law to deal with matters his government merely disagreed with.
While debt was already on the way up, with the state’s May 2019 budget forecasting a tripling of net debt to 2023, Covid provided the government with the excuse to ramp up spending to obscene levels.
As IPA Chief Economist Adam Creighton notes in the book, the Andrews era was characterised by a “growing prioritisation of short-term political expediency, manifested mainly in reckless spending on infrastructure, over the long-term welfare of Victorian taxpayers.” The state’s commitment to an expansive range of ‘big build’ infrastructure projects have treated concepts of budgets or timelines as merely advisory, meaning the overall cost of these commitments still cannot be predicted with confidence.
It was not always this way: in the 1990s, Labor was so embarrassed by the memory of state economic collapse due to the mismanagement of the Cain/Kirner governments that it deliberately cultivated a fiscally conservative image.
By the end of the 1990s Steve Bracks retuned Labor to government with a commitment to budget surpluses, low public debt, and the reasonable delivery of infrastructure programs, especially by today’s standards.
But Daniel Andrews saw government spending through the prism of politics and power. Big projects help win elections and also see streams of taxpayer money flowing to unionised construction projects that ultimately benefit the Labor Party – at everyone else’s expense.
By the government’s own numbers, state government debt, including that held by entities managing the infrastructure projects, will reach $235bn by 2029. It may never be repaid without a bailout from the federal government, meaning all Australians are on the hook.
The challenge of the 1990s economic collapse pales into insignificance when compared to the challenge of repairing the damage of the Andrews era. Victoria must urgently change course from its current unsustainable economic, social, and political trajectory. But we must understand how we got to this point before we can get back on track.
Morgan Begg is the Director of Research at the Institute of Public Affairs and the editor of The Dark Legacy of Daniel Andrews: Assessing the Social and Economic Costs of Australia’s Most Controversial Premier (Connor Court Publishing).
Originally published as Daniel Andrews’ bureaucratic blowout can’t be undone by Allan govt’s public sector cuts
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