Those who vote for a living drain nation’s wealth

Not everybody will thank the Finance Minister for keeping the public service wages bill in check, not least the lanyard-wearing bur­eaucrats in Canberra who have been doing it tough since the Coalition came to power.

Tough, that is, in relative terms. The 2008-09 financial crisis was a boom time for the commonwealth public sector, thanks to a kindly government that took its economic advice from Wikipedia.

The commonwealth’s wage bill rose 48 per cent under the Rudd-Gillard-Rudd administration, four times higher than inflation. The 13 per cent increase commonwealth public servants have squeezed out of Mathias Cormann since 2013 has barely kept up with the price of Demarquette chocolate, let alone the cost of electricity under the ACT’s bonkers government.

Needless to say, the seat of Canberra, where 42.5 per cent of workers are public servants, is absent from the Liberal Party’s winnable seats’ list.

These are votes that need to be bought, just as Lyndon B. Johnson bought 99 per cent of the vote in Duval County in the 1948 US Senate election, albeit a little less crudely.

Public servants are people who vote for a living. They loathe tax cuts but love recessions and the Keynesian rush of blood they provoke in soft-headed politicians. The growth in the public service has been phenomenal during the past decade as governments respond to public demands to do something. In the absence of any clear ideas about what that something should be, the usual response is to throw money in the hope that some of it will stick.

Most of the new opportunities for public servants have been created by state and territory governments rather than the com­mon­wealth. A quarter of a million public service jobs have been created since the financial crisis in state and local government. The combined payroll bill has risen by 75 per cent since 2008, three times the rate of inflation. Jobs growth has been twice as fast in the public sector than private.

The political impact of the big-government bloc vote has been apparent for some time. State Labor governments have to be beyond bad to be removed. At election time, Labor draws support from the public servants and their unions, the only unions to have increased their membership in the past 15 years. The support of teachers, nurses and fire officers, supplemented by actors in their uniforms, was arguably the decisive factor in the last state elections in Victoria and Queensland.

Public servants are merely the obvious beneficiaries of big-hearted governments.

An important new paper by Robert Carling and Terrence O’Brien from the Centre for Independent Studies calculates that a clear majority of Australians receives more from the government than it gives in taxes.

“Government may have grown to the point that there is a large segment of the population — perhaps even a majority — facing incentives to ‘vote for a living’ rather than to ‘work for a living’ by adding value to resources through market-tested employment in the private sector,” they write.

The report, Voting for a Living: A Shift in Australian Politics from Selling Policies to Buying Votes? finds difficulty in calculating the size of the “vote for a living”, but there is little doubt it is expanding.

The lure of the government cheque unites public servants, welfare recipients, subsidy seekers and those in government-supported sectors, such as education and health, around a single cause.

The ascendancy of zero-net taxpayers as a political bloc is skewing political debate and not in a nice way. It favours policies that rely on public expenditure and parties that prefer to increase tax rather than seek value for money. It tends towards a tyranny of the fiscal majority, citizens who benefit from redistribution against the minority that pays taxes. It encourages the demonisation of the new disenfranchised who find it hard to fight back, such as “rich foreign multinationals” or “big banks”.

Politicians become increas­ingly myopic, favouring short-term populism to long-term reform, shelving the challenge of demographic ageing, fiscal deficits, of the consequences of long-term debt.

A compulsory voting system that inclines parties towards seeking the support of the median voter prefers taxes and transfers that favour those on middle incomes and pays little attention to the very rich or the very poor. The net cost to taxpayers is suppressed and cost-benefit analysis becomes a thing of the past.

The politically stated purpose of policies diverges from their real intent, which is to keep the professional class on side. The Gonski plan, for example, was less about improving education standards and more about appeasing the teaching unions that were losing patience with a prime minister.

Those who vote for a living share a reciprocal self-interest in the broad expansion of the public sector, not just their particular corner.

“Teachers will support not only more spending on education, but also more on nurses, police, ambulance staff and fire services,” write Carling and O’Brien.

“The state-owned broadcaster will support them all.”

The repressed fury towards conservatism exhibited on the ABC is as much instrumental as ideological. The intolerance of socially conservative views is matched by a less vocalised opposition to fiscal conservatism.

It drove the fury towards Tony Abbott and Joe Hockey’s budget in 2014, a document that favoured taxpayers and the long-term national interest rather than those on the government drip.

Hockey concluded his budget speech by borrowing from Robert Menzies Forgotten People speech. “We’re a nation of lifters, not leaners,” he declared, provoking a furious frenzy in the twittersphere.

With the sharpening of the divide between the taxed and taxed-not, it has become easier to interpret their anger.

Nick Cater is executive director of the Menzies Research Centre.

Voting for a Living: A Shift in Australian Politics from Selling Policies to Buying Votes? by Robert Carling and Terrence O’Brien is published by the Centre for Independent Studies.