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Newman could do better

By Mikayla Novak - posted Friday, 31 August 2012

Renewed questions have been raised about the merits of public sector employment reductions in light of worsening opinion polls for the three-month old Newman Queensland government.

A recent Galaxy poll revealed that state Labor's primary vote in the opinion polls has increased by seven percentage points to 30 per cent, a considerable improvement for a state party literally on its deathbed since the election of 24 March 2012.

Other polls show that the popularity of Premier Newman has appreciably declined, with some figures suggesting that the Premier could lose his own seat if another election were to be held today.


There is suggestion that the Newman government's stance on public service jobs might even be contributing to the slight bounce in federal Labor's parlous opinion poll standings.

Unquestionably the organisational ability of public sector unions to get out a protestor crowd in relatively short notice has presented the political optic of growing animosity toward trimming the size of the state government.

But the truth of the matter is that the size of the Queensland public sector had grown out of control and needs to be reduced, especially under circumstances in which the jobs-generating private sector continues to feel the strain of the post-Global Financial Crisis economic stagnation.

The Costello audit commission interim report provides the tale of the tape concerning the unsustainable growth of the state government under the previous Beattie and Bligh governments.

With a key policy objective to wipe out the Bjelke-Petersen legacy of Queensland as the lowest taxing state, the Labor administration aggressively expanded public sector expenditure particularly in the areas of education, health, welfare services and housing.

From 2000-01, the first full year of the GST reforms, to 2010-11 growth in general government expenses had closely tracked the growth in revenue intake.


However it was during the Mining Boom Mark I that the state government loosened its belt allowing spending growth to escalate in unsustainable fashion.

As Treasurer and, later as Premier, Anna Bligh presided over perhaps the strongest growth in general government expenses the state had ever seen, with expenses growth averaging about 11 per cent per annum from 2006-07 to 2010-11 and almost double that of revenue intake growth.

Far from all of the proceeds of this spending growth trickling down in the form of services to final consumers, a significant share of additional spending since 2000-01 was siphoned off through additional public sector workers employed and higher salaries and benefits for these workers.

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About the Author

Mikayla Novak is a Research Fellow with the Institute of Public Affairs. She has previously worked for Commonwealth and State public sector agencies, including the Commonwealth Treasury and Productivity Commission. Mikayla was also previously advisor to the Queensland Chamber of Commerce and Industry. Her opinion pieces have been published in The Australian, Australian Financial Review, The Age, and The Courier-Mail, on issues ranging from state public finances to social services reform.

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