Public service booming under Palaszczuk

Queensland’s public service has regained its title as the fastest growing in the country.

Queensland Premier Annastacia Palaszczuk. Picture: Zak Simmonds

Queensland’s public service has regained its title as the fastest growing in the country, which it last held under the former Labor government of Anna Bligh.

With the state budget out today, it has emerged that public sector wages in Queensland were 6.7 per cent higher in the March quarter than a year earlier, including both the increase in numbers and pay rises, which was more than double the 2.7 per cent increase in the cost of public sector workers across the rest of Australia.

Queensland’s public servants cost the same as Victoria’s, ­according to the latest national ­accounts, although the southern state’s economy is 25 per cent bigger. For every dollar spent on private sector wages, there is 31c spent on public servants in Queensland, compared with only 24c in Victoria.

The rising cost of the public service was a contributing factor to the loss of Queensland’s AAA credit rating in 2009 after a payroll blow out of 30 per cent in two years.

The election of Campbell Newman in 2012 brought unpopular cuts to the public service and its annual growth in payroll was reduced to an average of 1.3 per cent.

Since the election of Annastacia Pala­szczuk in February 2015, public sector salaries have taken off again. While the growth in the latest quarter was the fastest since September 2011, the average annual rise over the past two years has been 5.4 per cent, or more than double inflation.

The state’s Auditor-General, Anthony Close, last month warned that the state faced a ­financially unsustainable public service if the growth in numbers continued.

“Current controls are ineffective in maintaining the overall wages and salaries expense,” he said.

The Labor government has added 15,000 full-time equivalent public service positions since its 2015 election.

Private sector wages in the state, by contrast, are at a standstill, having risen by only 0.5 per cent in the last 12 months.

The Palaszczuk government’s budget, to be delivered today, is expected to show payroll tax ­receipts are falling short of forecasts, with last year’s budget having ­predicted 5.1 per cent growth.

Tasmania is the only other state with rapid growth in public sector payrolls. The national ­accounts show they were 5.9 per cent higher in the March quarter than a year earlier, while growth was 3.4 per cent in Victoria and 3.5 per cent in NSW.

South Australia kept public sector salary cost increases to 2.2 per cent while in Western Australia, the increase was 1.6 per cent. In the ACT, where the federal government dominates public service employment, salary costs fell 1.8 per cent.