MATT CUNNINGHAM: Our public service is officially out of control

TRAFFIC jams are rare in Darwin. But you can see one just before 8am every morning on Tiger Brennan Drive as it approaches the McMinn St intersection

TRAFFIC jams are rare in Darwin.

But you can see one just before 8am every morning on Tiger Brennan Drive as it approaches the McMinn St intersection.

It re-emerges every afternoon around 4.21pm, and it’s been getting progressively worse for a decade, despite the closure of many CBD businesses.

Darwin has a problem, and it’s not traffic congestion.

The Northern Territory’s public service is officially out of control.

It’s a problem we’ve known about for a long time, but one that truly came home to roost this week.

It’s the main reason we are now staring at a net debt of $7.5 billion by 2021/22.

It’s why our borrowings will top $10 billion by the same year with another $3 billion in unfunded superannuation liabilities.

Those borrowings alone will cost us more than $500 million a year in interest repayments within five years. That’s about $1.4 million per day.

As The Australian newspaper reported this week, the Northern Territory has far more public servants per head of population than any other jurisdiction in the country.

We have nine public servants per person, compared with the national average of 16.

That’s right, there is one public servant in the Northern Territory for every nine people.

The size of our public service has been growing at a rate far greater than our population.

The figures were laid bare in the Yothu Yindi Foundation’s recent submission into the Productivity Commission into GST distribution.

It showed in 2003 there were 14,538 full-time equivalent positions in the NT public service serving a population of 201,725.

By 2016, that number had grown to 20,596 public servants for a population of 244,900. That’s a 41.7 per cent increase in public service employees for a population increase of just 21.4 per cent.

“The increase in the public service over and above the population increase is almost 3000 positions or about $400 million per annum,” the submission said.

Despite the whopping deficit and record net debt announced in Tuesday’s NT Budget, we also learned this year’s expenditure growth was seven per cent, slightly above the decade-long trend of about six per cent.

This figure would be alarming under any circumstance, but in the NT this excessive spending growth has been masked by revenue that has increased with the help of a generous GST distribution.

However, as the economy contracts and GST revenue falls, it’s a trend that has some arguing we are now on a path to insolvency.

About half of the average annual expenditure growth comes from rising public sector staffing costs.

The Government says it will lose about 250 public service jobs over the next two years through natural attrition and some redundancies.

But, at best, that will only be removing the same number of full-time equivalent positions that have been added in the past 12 months.

Opposition Leader Gary Higgins says the entire public service needs to be tipped out and reassessed.

Privately there are those within the Government who agree.

They point to a chart known internally as the “croc jaws” which has seen public service salaries increase by 105 per cent since 1997, while CPI rose by about 71 per cent.

Wiser heads within the Government know this situation cannot continue.

We can’t continue to increase infrastructure spending — needed to stimulate the economy and create private-sector jobs — while maintaining a bloated public service, hoping one day the Commonwealth will step in and bail us out.

But don’t expect either major party to go to the next election with a policy of major public service cuts.

There’s a reason Northern Territory Governments are reluctant to cut the public service.

Most of those public servants live in Darwin’s northern suburbs, where NT elections have traditionally been won and lost.

There’s another point here about the Northern Territory being one of the world’s most over-governed jurisdictions, but that’s a story for another day.

These increases in the public service might be worth the pain if the jobs were going to teachers, nurses and police.

Few would argue we don’t need more of all of these essential Government employees.

But they’re not. Professor of public policy at Charles Darwin University Rolf Gerritsen says almost 40 per cent of the NT’s public servants are administrators, compared with just nine per cent in Victoria and 16 per cent in New South Wales.

What’s more alarming is that a large number of these administrators have been hired to address the disadvantage faced by Aboriginal Territorians living in remote communities.

They’ve been paid for with the GST bounty we receive each year because of that disadvantage.

Now that the GST bounty has dried up, they’ll be paid for on the Government credit card.

And yet for more than a decade we’ve seen little or no change in the living standards of people in the bush.

Most of these communities still lack much of the basic infrastructure — such as decent roads that allow year-round access — required to participate in the real economy.

Meanwhile, $30 million is being spent on Barneson Boulevard to ease peak-hour congestion around the CBD. At least our growing public service won’t be stuck in traffic.