On the face of it, the Queensland government’s 2023-24 Budget is nothing but good news for the state’s public servants.
It pledges more hirings and more pay with no mention of productivity trade-offs or departmental efficiency dividends.
Premier Annastacia Palaszczuk’s eight-year-old government continues to make a virtue of its ever-expanding workforce, which Campbell Newman’s previous one-term LNP administration cut by about 20,000.
“The government is delivering on its commitment to revitalise frontline service delivery,” the Budget papers say, a strategy that has seen the state’s public sector grow by nearly 45,000, or around 20% since Labor won office in early 2015.
This year’s Budget adds another 4,666 full-time equivalent positions, largely reflecting growth in Department of Youth Justice, Employment, Small Business and Training, Queensland Health and Queensland Police Service numbers.
The Budget also restates the government’s approach to renegotiating public sector enterprise agreements, most of which expire this year.
Its new public sector wages offer includes three-year agreements with a wage increase of 4% in years one and two and 3% in year three.
“This is higher than the previous 2.5% in recognition of prevailing economic circumstances and maintains capacity for strong frontline service delivery,” the Budget papers say.
The new offer also includes a cost-of-living adjustment payment for employees where inflation exceeds headline wage increases established in agreements.
More broadly, Queensland public servants will also benefit from the wide range of cost-of-living-busting initiatives announced by treasurer Cameron Dick – from power bill subsidies to free kindergarten.
The Budget provides a record $8.2 billion in concessions, a 21% increase from the previous year.
However, the Budget also includes a record capital works program and ambitious service delivery targets in the politically sensitive areas of public housing and health, which will fully test the Queensland public sector’s ability to manage and deliver big programs.
The government is planning to spend a record $89 billion on capital works over the next four years – a 20% hike on 2022-23’s four-year total.
“This unprecedented peak is the result of accelerated works for the Queensland Energy and Jobs Plan and the Queensland Health and Hospitals Plan and also takes into account higher prices for construction, wagers and material,” Dick said in his Budget speech.
He said it was a “deliberate decision” by the government to continue with its proposed investments.
“Government either backs these projects and accepts their higher costs or the government has to walk away.
“And our government would never walk away from the needs of Queenslanders.”
Not only is Queensland’s capital spending program now at record levels, it includes such challenging projects as two massive hydro schemes in central and northern Queensland and the 1,100 km Copperstring 2 transmission line from Townsville to Mount Isa.
There are also the rapidly growing and necessary capital works demands of the fast-approaching Brisbane 2032 Olympic and Paralympic Games.
With the state election less than 18 months away, the pressure on Queensland public servants to make sure this massive spending program remains on track will be enormous.
So, too, will be the need to control cost blowouts. The government has been able to fund its newly expanded capital program and cost-of-living handouts only because of a completely unexpected but doubtless temporary surge in coal royalties.
Indeed, the only obvious losers are the state’s coal miners who, thanks to what they claim are now the world’s highest royalties and Ukraine War-fuelled record-high prices, helped deliver a $12.3 billion Budget surplus – an unexpected $13 billion turnaround from the forecasts of just a year earlier.
Dick had modest expectations when he introduced the state’s new progressive coal royalty structure in last year’s state Budget – an estimated $1.2 billion over four years.
In fact, the miners say they’ve paid more than $5.7 billion this year alone.
But it’s a windfall that can only be temporary. Coal prices will inevitably return to more realistic prices, and the government and its public sector workforce will be under even more pressure to live within their means.
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