Queensland Government retains public service hiring freeze as wages bills climbs towards $30b a year

The State Government will stick to its public service hiring freeze for at least another year, as the wages bill for the sector marches towards $30 billion a year. VOTE IN OUR POLL

The State Government will stick to its public service hiring freeze for at least another year, as the wages bill for the Queensland public service marches towards $30 billion a year.

The Government will also abandon its “fiscal principle” to keep public service growth in line with increases in the population, after it conceded it would not meet the yardstick in last year’s Budget.

Employee expenses for the state are set to reach about $27.47 billion in 2021-22 – an increase of over $1 billion from the expected $26.28 billion spend during the current financial year.

And over the next four years, the total spend on public service wages is tipped to jump by 15.4 per cent to hit $30.34 billion in 2024-25.

Treasurer Cameron Dick also revealed on Tuesday that the Government would maintain its public service hiring freeze – which excludes frontline staff and services – on a “year to year” basis.

The move was announced by the Government last year as part of a suite of measures in a bid to save $3 billion over four years.

“We’re going to continue the focus on frontline services and frontline staff and that’s very important in a growing state,” Mr Dick said.

“I think we’re getting the balance right for Queensland.”

Treasurer Cameron Dick hands down the 2021 Queensland budget. Picture: Dan Peled

Last year’s Budget had predicted that employee expenses would come in at about $26.8 billion for the 2021-22 financial year – but this year’s Budget now sees that forecast balloon by about $620 million.

But its predicted spend on wages for the 2020-21 financial year is down about $186 million from what had been forecast in last year’s Budget.

The Government will also no longer try to ensure that growth in public service employee numbers doesn’t exceed population growth, under new fiscal principles unveiled on Tuesday.

The old principle has been replaced with a new one that will aim to ensure that general government sector spending in the “medium term” is below the average annual growth in general government sector revenue.

The Budget papers claim the previous fiscal principle was “too narrow to guide fiscal recovery from the impact of Covid-19”.

“Frontline services have been pivotal to ensuring the state was protected from Covid-19 and, therefore, critical to ensuring the state’s economic recovery,” the Budget papers say.

“A narrow focus on FTEs could also create perverse incentives for agencies to outsource services at higher cost to the state.”

Mr Dick defended the move, saying the new principle was a “better” and “more realistic” measure – and that he was comfortable with the growth of the public service.