Australian wages become a ward of the state

Yesterday’s labour price index for the September quarter, released by the ABS, confirmed that the public sector is driving wage growth across the Australian economy:

As shown above, public sector wages grew by 2.5% in the year to September, versus a 2.2% increase across the private sector.

This continues a long-running trend, with real public sector wages growing by 14.9% since June 2002, versus growth of only 8.3% across the private sector:

The lion’s share of recent wage growth has been driven by the Healthcare & Social Assistance sector, where wages surged by 3.2% in the year to September, dwarfing the wage growth experienced across all other industries:

Much of this increase can be attributed to the ongoing rollout of the $22 billion a year National Disability Insurance Scheme.

As we already know, the Healthcare & Social Assistance sector has already been by far the biggest jobs driver since the Global Financial Crisis in 2008:

And the Department of Employment projects this to remain the case over the next five years:

Clearly, Australia’s bedpan economy has become a ward of the state, heavily reliant on the Australian taxpayer to deliver both jobs and wage growth.

It’s the economy you have when you don’t have an economy.

Leith van Onselen

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