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The Queensland Government’s Fiscal Principle No 6 links Public Sector full-time-equivalent (FTE) growth to the growth of the populations. However, as regular readers will be aware, the government has consistently failed to get anywhere near that measure during its tenure. However, in September last year the Coaldrake Review (see here) made a series of recommnedations, one of which was…
“The recent introduction of Fiscal Principle No. 6 (FP 6), linking public sector employment growth to Queensland’s population movement, was based on an appropriate concern to maintain overall budget sustainability. However, most increases in public sector FTEs have occurred in the health and education arenas which are governed by Commonwealth-State funding arrangements. These arrangements are based on activity and demand principles, not population growth. This competing driver has a distorting effect on the capacity of government to meet its overall sector-wide growth targets. It is recommended that the principle be nuanced.”
Perhaps not surprisingly the government accepted this recommendation, along with a recommendation to look at how ‘frontline’ staff are defined.
There is little doubt that Coaldrake’s comments regarding the impact of above-population-growth increases in FTE numbers in QLD Health and Dept of Education are well made. Indeed, this idea that the Fiscal Principle itself was badly set in the first place is something we discussed for some time (listen to this ABC interview last year) so we are comfortable with the idea of excluding health and education from the Public Sector FTE Fiscal Principle requirement; although there must also be some measure of control and restraint here too.
Yesterday saw the release of the June quarter Public Sector workforce statistics and, as we noted here, the rate of growth of total Public Sector FTEs has again slowed. Further analysis shows us that, if we accept the Coaldrake ‘nuance’ and remove health and education, then over the course of the ALP government’s term Public Sector FTEs have grown at a rate of 1.4% pa which is quite comfortably below the rate of population growth over the same period of 1.6%.
If we include health and education then the annual rate of growth jumps to 3.2%. Queensland Health FTEs have grown at a rate of 4.7% pa over the period while Dept of Education has seen 3.0% pa growth.
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October 1st, 2019 at 9:37 pm
What a terrible way to justify increases in public service numbers by linking it to increases in population, what they should be linking the numbers to is the increase in revenue, as that’s all that really counts, these people have to be paid, if the govt isn’t increasing revenue then it shouldn’t be increasing public sector numbers.
October 1st, 2019 at 10:56 pm
Glen, while I agree that there are arguments about how we measure and regulate growth in the Public Sector workforce I don’t agree that it’s not linked to population growth. Demand for many services provided by the public sector (think health, education, law and order, which is where the vast majority of public sector employees are) are directly linked to population growth. We need more doctors, nurses, teachers, police officers and others as our population grows…to suggest otheriwse seems to me to miss what public sector services are all about.
BTW…your suggestion that numbers should be linked to revenue growth could result in a faster growth in Public Sector labour force. Revenues have grown at 3.8% pa since 2015…population by just 1.6%. Even adjusting for inflation the real increase in revenue comes out at 1.6% pa….the same as population growth.
Thanks for the comment. Pete