President Trump sure is getting a lot done and he hasn’t even reached his first 100 days yet. This one in particular caught my eye.
President Trump signed an executive order instituting a federal hiring freeze, although there is an exemption for the military. A federal hiring freeze was the second point in President Trump’s “Contract with the American Voter.” During his inaugural address, the president said, “For too long, a small group in our nation’s capital has reaped the rewards of government while the people have borne the cost. Washington flourished, but the people did not share in its wealth.”
There is another capital city in the world that is flourishing at the expense of a nation’s citizens, and that city is Canberra.
I have to confess that I have never stepped foot in my nation’s capital. A city of public servants has no appeal to me. In days gone by Canberra was best known for its large number of heroin addicts as well as its legalised pornography. But more and more it is becoming known in Australia as a weekend getaway destination, at least amongst the upwardly mobile middle class.
During my weekly shopping last Saturday morning I bumped into a couple that I know socially. We ended up talking about their amazing weekend away which they had enjoyed a few weeks previously. I knew what was coming before they even said it as I have heard it so many times lately. Sure enough they had stayed in Canberra, and I stood patiently while they enthused about the fantastic hotel, the beautiful restaurants and bars, and the sheer amount of energy that the city enjoys.
“Much more going on there than here in Melbourne,” my acquaintance concluded with a wry smile.
That might have something to do with the huge numbers of well paid public servants that dwell in that city. Australia isn’t doing so well at the moment with living standards in decline due to wage stagnation.
There has not been such an extended period of stagnation in household incomes for 25 years, since the depths of Australia’s last recession, according to analysis by the ANU Centre for Social Research and Methods researcher, Ben Phillips.
After allowing for population growth and inflation, household disposable income in the December quarter was actually 0.1 per cent lower than it was in the same period of 2011, the first such fall since 1991.
It’s fortunate for the government that the analysis included public sector wages. If it had only been private sector income included in the study then the figures would have been a great deal uglier. The latest figures from the ABS show a 3.1% average wage increase for public servants while the private sector increased by only 1.2%. Here’s a nice little graph from the link:
Notice the flat-lining trend in the private sector while the public sector is shooting up.
Perhaps you think that this is an anomaly. Back in May 2013 the private sector had a slightly larger increase of a 5.4% yearly change as opposed to a 3.9% increase in the public sector. But comparing the May 2013 figures to the November 2016 figures we find that the public sector average weekly wage has gone from $1269.70 to $1390.80, an increase of $121.10. The private sector has enjoyed an increase of $44.10 in the weekly wage over the same time period, going from $1066.30 to $1110.40.
The general analysis of this data from the ABS shows the following:
Average weekly total cash earnings for all employees was higher in the public sector ($1,489.00) than in the private sector ($1,170.00).
That’s more than I thought. I wonder which state in Australia enjoys the highest average income?
The average weekly total cash earnings of all employees was highest in the Australian Capital Territory ($1,461.90). The average weekly total cash earnings of all employees was lowest in Tasmania ($1,041.00) and South Australia ($1,077.00).
The ACT of course is comprised almost entirely of one city – Canberra.
When you consider that the public sector has a minimum superannuation of 15.4% compared to the 9.5% of the private sector then it becomes even more economically unhealthy. The kicker of course is that 15.4% superannuation is paid for by the taxpayer. The other kicker is the 9.5% private sector super is paid for by employers which adds to the constraint on wages due to its effect on company profits.
Perhaps there are so many wonderful places to eat and drink in Canberra due to the “salary sacrifice” perks that public servants enjoy for things such as meals and entertainment, the end result being that these are paid tax free which adds thousands of dollars to their average yearly wage. Add to that the amount of holidays and flexible working hours and it really is a dream job to go and work for the government, all while apparently “serving” the Australian taxpayer.
Like Washington DC, Canberra is flourishing but the rest of Australia is not sharing its wealth. On the contrary, a city that was intended to serve Australia is doing so well at the expense of the nation. This is simply obscene. But unlike the USA, we do not have a leader here who is committed to draining the swamp. Locked away in our nation’s capital, the people employed to serve the country enjoy ever greater largesse as Australia slips further and further behind.