Wednesday, February 12, 2025

New research finds SA public servants left behind

South Australian public servants are 10% worse off now than they were five years ago, despite the state’s booming economy, according to new research by The Australia Institute.

SA’s 2024/2025 budget papers laud the state’s economic growth as “the number one performing economy in the nation”.  

In per capita terms, South Australia’s prosperity has improved twice as fast as the national average.

Yet, new research reveals state funding for services and infrastructure has not kept up with this growth.

State public sector workers have borne the brunt of this restraint: their wages have lagged far behind inflation, resulting in a painful real wage cut for thousands of employees, says the report’s author, Research Economist, Jack Thrower.

He says South Australia enjoys a stable, diversified economic base, with the state’s labour market operating at or near-record low levels of unemployment.

Unfortunately, this economic progress has not been reflected in improvements in state-funded public services, a new research report by the Centre for Future Work at The Australia Institute shows, he says.

The research found that real wages for state public servants in SA have declined by as much as 10% since 2019.

“This represents a one-tenth reduction in the real purchasing power of their salaries, imposing severe financial stress on tens of thousands of households – and undermining consumer spending and economic growth,” said Mr Thrower (pictured).

“It doesn’t have to be this way. South Australia has abundant fiscal capacity to repair this damage to real compensation for public sector workers.

“Rebuilding public employees’ wages to catch up to past inflation should be a vital priority for the South Australian government.”

The report also confirms that the State possesses abundant fiscal capacity to repair this damage to real compensation for public sector workers.

“The state government’s core revenues are growing much faster than core expenses, and the budget is projected to return to surplus this year – faster than any other state other than Western Australia. Rebuilding public servant wages to catch up to past inflation should be a vital priority for the state government,” said Mr Thrower.

Read the full report, Economic Prosperity, Public Sector Restraint: Unpacking South Australia’s Economic and Fiscal Advantages in the Shadow of Public Sector Pay Erosion by Jack Thrower at The Australia Institute here.

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