Ending the metropolitan monopoly on public power
The image of the typical Public Servant is distinctly urban. This is hardly a surprise with 83 per cent of Australian Public Service (APS) jobs currently located in the big cities. APS jobs based elsewhere are generally lower paid with little influence over government policies impacting regional Australians. It’s time for the metropolitan monopoly on APS jobs and public power to end.
For the last few years, the growth in our inner cities has led to Australia’s leaders spending big on our largest cities. For Commonwealth Public Servants, this means of the estimated $16.7 billion spent annually in Public Sector remuneration, only 15 per cent or $2.5 billion was spent outside Canberra and the big five cities. On a per capita basis, the APS spends four times more on wages in metropolitan areas than in regions ($1001 vs $281). For senior roles, the spend is 12 times higher per person ($436 vs $36) due to their concentration in Canberra. This gap is also growing as rates of urban public sector employment growth outpace new jobs in the bush.
But where is the evidence that just doubling down on big city spending is the best strategy for our future?
The 2017 report on global housing affordability by US-based consultancy Demographia ranks Sydney second worst in the world. The median house price in Sydney is now $1.077 million with the median household income sitting at a paltry $88,000.
Concentrating public service employment in inner cities makes this problem worse and means that well paid and interesting careers in the public service are only accessible for some Australians.
In France, Finland, Ireland and the UK, the decentralisation of the Public Service has been used to create jobs and encourage economic development in provincial regions while simultaneously reducing inflationary pressures in the property and labour markets of capital cities. There is no reason to believe the same could not be achieved here in Australia.
The Regional Australia Institute (RAI) estimates that for every additional 100,000 Australians who choose to live in small cities rather than capital cities, around $42 billion dollars will be released into the economy over 30 years through reduced interest payments on mortgages alone. While it is true a balance needs to be struck between regional and metropolitan growth, the relocation of some APS departments to regional centres could help regain some equilibrium.
Some examples of where decentralisation has already worked in Australia include the regional centres of Geelong, Ballarat, Newcastle and Gosford, which have each benefited from the relocation of state and federal government departments.
Gosford for example has seen several sizeable government service relocations – starting with the relocation of 480 staff from what was the WorkCover Authority NSW (now Safe Work NSW) in 2002. This was the beginning of a growing specialisation in insurance and legal services in Gosford. There are now over 620 staff in a building housing not only Safe Work NSW but also the State Insurance Regulatory Authority, Insurance and Care NSW, and Legal Aid NSW.
The NSW Central Coast has since seen a lower unemployment rate as a result of the relocation of government departments. Moreover, the lifestyle offered by living in a regional centre in addition to the lower-cost of housing has led to a large number of commuters living in Gosford but working in Sydney.
However, despite the benefits to regional centres from the relocation of some government departments, there are significant risks that should be considered before rushing headfirst into a one-size-fits-all policy position on decentralisation.
The costs of change and disruption to public services occur in the first few years but the benefits take longer. If we make a change we need to stick to it. A ten year, bipartisan strategy is needed to make this work.
Relocation is also not always an effective response to economic problems in regional Australia. Relocation can alleviate local economic weakness in the short term, if the decision is reversed in the future it leaves regional centres high and dry with a gaping hole in the housing and labour markets.
If the Government is going to go ahead with a wider relocation of the APS, it need to show caution about using the relocations to respond to economic problems in regions. Instead, relocation strategy should seek to put agency functions in regions with complementary industries and workforces to assist in achieving scale and a diverse set of career options locally.
The other priority must be to bring decision making closer to the people affected. The proposal to move a substantial part of the indigenous administration to central Australia is a much needed example of this. It’s also an area where a centralised public service has failed to make progress on regional issues.
Whatever path the Government takes, it needs to be looking forward to an Australia where regional Australia is considered an equal to our big cities as a driver of our national economy. Our national leaders should reject this false choice of city over country and see our regions as equal partners in our housing and labour markets.
Click here to read the Regional Australia Institute’s Inquiry into the operation, effectiveness, and consequences of the Public Governance, Performance and Accountability (Location of Corporate Commonwealth Entities) Order 2016 submission