The wages of entitlement


2013-04-24 04.49.50 amNICK CATER

The Australian, February 17, 2015


TROUBLE is brewing in the entitlement industry. Public servants at the Department of Human Services are so angry at the government’s derisory pay offer that they have taken off for lunch.

The 1.15 per cent rise on the table falls somewhat short of the 12 per cent the Community and Public Sector Union thinks its members are worth. What’s more, the department wants to add nine minutes to the working day, requiring staff to stay at their desks for a full 7½ hours. No wonder they’re upset.

Last week DHS staff escalated the dispute by switching their email accounts to bounce-back while they took co-ordinated meal breaks. Unmoved, the department is refusing to budge.

Just how productive are the 30,000 DHS workers who administer the nation’s biggest welfare programs? Arguably a little too productive. Last year they redistributed $159 billion of other people’s money, about 10 per cent of Australia’s gross domestic product. That means each staff member doled out about $5.3 million in welfare in 2013-14, or 62 times what they are paid.

It’s not public service salaries that are sending us on the road to Athens, it’s the quantities of cash they are spending. The budget cannot be returned to surplus by simply cutting bureaucracy, as Finance Department secretary Jane Halton pointed out on Friday.

The government’s running costs were on track to fall to 6 per cent of total spending in 2017-18, Halton told the Committee for Economic Development of Australia. “Evidence suggests that (inefficiency) is not the major source and major driver of growth in government outlays,” she said.

A truly disheartening piece in The Weekend Australian by Tony Shepherd listed the fast-growing expenditure items that a courageous government would be tackling. Medicare costs $19bn a year and costs are rising at 7.1 per cent a year. When Andrew Leigh, Labor’s assistant Treasury spokes­man, tells us “this notion of a crisis in Medicare is just a fabrication by the government”, the man is talking through his hat.

The aged pension costs us $40bn and is rising at 6.2 per cent a year. We spend $14bn on hospitals and the cost is rising by 10.4 per cent a year. On and on it goes. Schools: $13bn, rising at 9.2 per cent a year. Higher education: $7.1bn, rising at 5.8 per cent. If these numbers are not giving Joe Hockey sleepless nights, they should. Few if any of the cuts that need to be made will improve this government’s chances of winning a second term, yet if the Abbott government goes soft it will leave voters confused about what, if anything, it stands for.

Were an election to be held this week, Newspoll tells us, the Treasurer would be put out to grass. The member for McMahon, Chris Bowen, would be the favourite to replace him.

On Sunday when Paul Kelly tried to establish what the incoming Labor treasurer’s first budget might look like, Bowen switched to auto-reply.

“We’ve said that 2015 will be the year of ideas,” Bowen told Australian Agenda on Sky News.

Kelly, naturally, was not content to let it rest: “Presumably Labor will look for savings in the big areas: health, education and welfare. Can you just confirm that for us?”

Bowen: “Well, Paul, I’ve said … the Labor Party will be considering expenditure items …”

Kelly: “Will you looking for savings in the big areas … ?”

Bowen: “We will be considering revenue and expenditure measures, and we will be announcing them.”

Kelly: “So that includes health, education and welfare?”

Bowen: “Well, obviously health and education will be better off under a Labor government than … under (the Liberals).”

Well obviously, because Labor is no longer the party of the workers, those who eke out a living in the productive economy and dutifully pay their taxes. Labor has become the party of the public sector, harvesting the grievances of those who spend other people’s money in ever larger amounts.

If a corporate donor to the Liberal Party were given favourable government treatment, the ALP and its supporters would justifiably complain. Yet since 2007 the CPSU, which has a material interest in preserving public sector jobs, has donated more than $800,000 to Labor.

The kind of Labor leader who would have confronted the precarious situation with courage — Bill Hayden, Peter Walsh, Bob Hawke, Paul Keating, Simon Crean or Martin Ferguson, for example — has long since vanished from public life. Leigh, Bowen and Bill Shorten are all we have left to tackle the most serious structural crisis in a generation.

Last week the ABC’s Barrie Cassidy put it to the Opposition Leader that he presented as “a blank sheet of paper”. “Well it’s not right,” said Shorten, “and what we are doing is we’re working on our ideas … we’ll have a full slate of policies in good time before the next election … Slashing, burning, cutting, sacking public servants, this country can’t shrink its way to its future.”

Shepherd, meanwhile, writes that achieving a modest surplus of 1 per cent within 10 years requires annual savings of $65bn. That’s 40 per cent of the DHS’s budget.

Do Shorten and Bowen have any idea where savings of that magnitude could come from? Perhaps they’d like to tell us when they return from their co-ordin­ated lunch.