There’s a solution to the Northern Territory public service debacle

It’s possible for the Northern Territory to deal with its public service debacle, writes Matt Cunningham. Find out why, if we don’t find a solution, the cost will become a massive burden.

In the current economic environment it would be difficult to argue the Northern Territory’s public servants do not deserve a pay rise.

Inflation is running at more than seven per cent driving up the cost of living, meaning a pay freeze effectively becomes a seven per cent pay cut.

And our frontline workers have just been through two of the toughest years they will ever endure.

Police have been sent to patrol borders for weeks at a time, and told they cannot take annual leave.

Our hospitals are so busy they’re regularly being forced to call “code yellows” - that’s management speak for “so busy you won’t have time for a tea break when you come in for your 12-hour shift today”.

So it was little wonder that in the face of a staunch union campaign, the Fyles Government relented on its pay freeze and offered public servants a two per cent annual increase.

What’s yet to be revealed is how much this will cost.

Chief Minister Natasha Fyles has a growing public service cost problem. Picture: (A)manda Parkinson

The government’s problem is that a bit like wet season mould, the NTPS refuses to stop growing.

According to a report released last year by the Office of the Commissioner for Public Employment, the NT had 24,612 public servants as of June 30 last year.

That’s an increase of more than 3000 since 2019, when the government first implemented a hiring freeze.

At that point its own independent review had presented two options if it wanted to avoid fiscal disaster; cap public service pay rises at $1000 across the board, or start cutting staff. The government went a step further, freezing pay in favour of annual cash bonuses.

But it couldn’t control the numbers.

Some will argue that increase in staff was necessary, particularly during a pandemic when health staff and police were more important than ever.

But the NT’s public service has a structural problem. About 40 per cent of our public servants work in management and administration roles (in WA that figure is about 10 per cent) and an increase in nurses is not being met with a concurrent reduction in less important, non-frontline roles.

The relentless growth in public service numbers means more damage to the government’s bottom line when it agrees to a pay rise.

Back-of-the envelope calculations would indicate a 2 per cent increase will cost about $50 million.

Not just next year, but every year, compounding. But it’s unlikely unions are about to agree to two per cent. That’s still a five per cent cut in real terms.

They will be arguing for at least seven per cent. Assuming there’s agreement somewhere in between - say five per cent - that’s a $125m hit to the budget. (Each year, compounding).

Of further concern is that the increase in public service numbers does not appear to be accompanied by an increase in productivity.

The average number of personal leave days taken by public servants in 2020/21 was 11.2. That number has increased every year since 2010-11, when it was nine.

As part of the latest negotiations, many public servants are being offered more generous leave entitlements including extra leave over Christmas and New Year, NAIDOC March leave, gender transitioning leave and pre-natal leave for non-primary carers.

Negotiating a way through this pending fiscal nightmare might seem like mission impossible. The good news for the government is that there’s unlikely to be any electoral blowback, regardless of how cooked the books might be.

With 24,612 public servants - 68.4 per cent based in Darwin - a generous pay rise offers Labor its clearest path to victory.

Throw in a “CLP cuts” campaign and the rest should take care of itself.

Little wonder the CLP was standing in solidarity with union members at their latest rally.

There might, however, be a solution to this mess.

The Territory needs to harness its resources to drive own-source revenue.

If we can tap into the Barkly’s sun for electricity generation and green hydrogen production, the Beetaloo Basin’s gas, and the vast lithium and rare earth deposits required for electric vehicles we might have a chance.

In doing so we might create jobs that offer better pay and conditions than those available in the public service, reversing a trend identified by the government’s independent review, which found public service pay and conditions were so generous they were making it impossible for private industry to compete.

We might even create a participatory economy in remote Indigenous communities, the sole thing that could turn around the future prospects of the people who live there.

Chief Minister Natasha Fyles clearly understands this conundrum.

When she fought back last week against criticism of the government’s Middle Arm development, she said: “If the Northern Territory wants to create own-source revenue to overcome the education and health challenges that we’ve got, we need to get on board, we need to look at the opportunities of the future.”

The question for the public service is whether it wants to help nurture these opportunities, or stand in their way?

For we can only take this blue pill – increasing the size and wages of the public service without increasing the size of economy – for so long, before our inevitable day of reckoning arrives.