Anthony Albanese’s public sector splurge costs taxpayers extra $5bn

The Albanese government has added more than 26,000 new permanent public ­servants to the payroll since it was elected.

The Albanese government has added more than 26,000 full time public servants since the 2022 election.

Taxpayers have been slugged with a $5bn spike in the wages bill for the commonwealth bureaucracy with Labor adding more than 26,000 new permanent public ­servants to the payroll since it was elected.

More than half of that increase has been directed toward new jobs for bureaucrats in Canberra, with a 23 per cent increase in the overall wages bill in the capital since June 2022.

An official Australian Bureau of Statistics report released last week shows the annual wages bill for the commonwealth public sector across the country is now more than $37bn a year, up from $32.5bn in June 2022, with a total workforce of 365,400.

It reveals that 15,100 new ­commonwealth public service jobs were added in 2023-24 on top of the 11,000 new positions created in the first year of the Albanese government.

The increase in the wages bill, which includes the inflationary impact of wage rises, amounts to an increase of more than 10 per cent in the past year and 15 per cent over the space of two years.

According to the federal government’s own budget papers, the largest ratio increase in public ­sector jobs in the past two years was in the climate change, energy, environment and water portfolios.

The largest increase in employee numbers and wage increases has been for expanding the public service in Canberra.

Labor governments have also added to the total public service picture, at a state and local government level, with the annual cost to fund the public service nationally across all tiers of government now reaching almost $250bn a year. The Albanese has defended the numbers, having estimated an even higher level of new public service jobs in the most recent budget. The Coalition has accused the government of using taxpayer power to prop up the jobs market and buying itself a better economic growth number through public-sector spending.

The Albanese government went to the election with a policy of restoring public-sector jobs by cutting the government’s reliance on consultants’ fees. In the most recent budget, it forecast a $4bn reduction in the cost of consultancy fees. This, however, was over a forward estimates period of four years. If realised, the savings from consultants would still fall short by more than $2bn in making up the additional cost of expanding the public service.

The number of public servants nationally has increased by 87,000 at all levels of government. This ­includes frontline services – police, teachers, border control and health professionals. But it also ­includes a large number of “desk jobs” involved in the administration of government.

The state sector contribution to jobs creation now makes up a significant proportion of the overall jobs data that the Reserve Bank ­assesses as part of its inflationary outlook.

The head of ABS labour statistics, Bjorn Jarvis, said the rise in commonwealth employment in the past year amounted to a 4.3 per cent rise in workers but a 10 per cent rise in wages paid, compared with a 7.6 per cent rise in state government wages bill.

“There was a total of $232bn of wages paid to public-sector ­employees during the 2023-24 ­financial year across all levels of governments. This was an increase of 8 per cent from the year before,” Mr Jarvis said.

“The rise in the public sector wage bill reflected a combination of underlying wage growth, ­higher employment, and other compositional changes, such as hours worked.”

The public sector is concentrated in three key industries: public administration and safety, education and training, and health care and social assistance. Together these three industries make up about 90 per cent of ­public sector employment and wages. Of these three areas, health care and social assistance had the ­largest employment growth in the year to June, up 4.4 per cent to 642,400 employees, Mr Jarvis said.

This was followed by public administration and safety with growth of 3.9 per cent to 849,400 employees, while education and training rising 2.2 per cent to 753,900 employees.

“Public administration and safety had the largest growth in total earnings of these three industries, rising 8.5 per cent to $83.4bn,” Mr Jarvis added.

“This was closely followed by education and training, up 7.6 per cent to $57.9bn, and health care and social assistance which grew 7.1 per cent to $61.7bn.”

Opposition Treasury spokesman Angus Taylor said the new data suggested “Labor’s bloated bureaucracy was out of control”.

“An economy where the jobs market and GDP is entirely propped up by the public sector is not a healthy economy,” Mr Taylor said. “Labor’s economic plan is building bureaucracies, not businesses.

Public Service Minister Katy Gallagher. Picture: NewsWire / Martin Ollman

“Australia needs a strong private sector, not more public servants, because we know that is what drives a healthy economy. Australia needs to get back on track and back to basics.”

Public Service Minister Katy Gallagher defended the numbers, saying that, since coming to office, the Albanese government had been rebuilding the Australian Public Service after a decade of neglect by the former Coalition government.

“As a result of our investment, we have cleared the 42,000 unallocated veterans claims backlog, doubled the on-time environmental approval rate, and slashed Medicare and Centrelink backlog and average processing times,” Senator Gallagher said.

“The previous Liberal/National government capped public ­servant numbers and outsourced billions of dollars of core public service work to expensive contractors and consultants. The Coalition eroded capability across the APS and oversaw the biggest failure of public administration – robodebt.”

Opposition finance spokesperson Jane Hume said while Australians should expect to maintain a world-class, efficient public service they should not be expected to foot the bill for expanding a public service that provided inferior services.

“Australians are waiting longer under Labor to get simple claims, despite (the government) hiring tens of thousands of new bureaucrats at a cost of billions in taxpayer funds.” Senator Hume said.

“An Australian who is seeking a pension previously would wait 35 days to have their claim processed. Today that wait is more than double at 78 days. The RBA has warned that increased public expenditure is keeping inflation higher for longer.”