We must create more jobs, not give extra money to public servants

29 May 2020, 14:05 by Dominic Perrottet

This week the NSW government made the difficult call to temporarily pause pay rises for NSW public servants, as well as for politicians, executives and staffers.

Any suggestion that this is about slashing costs misses the point.

It's about creating jobs in response to the worst jobs crisis in living memory.

The global economy is taking a battering. Australia is headed for its worst recession in a century. NSW has just experienced its biggest monthly spike in job losses in recorded history.

In April, more than 221,000 people lost their jobs in NSW - enough people to fill The Domain almost three times over - or more than half the entire NSW public sector workforce.

https://static.ffx.io/images/$zoom_0.694%2C$multiply_1.5109%2C$ratio_1.776846%2C$width_1059%2C$x_5%2C$y_333/t_crop_custom/q_62%2Cf_auto/8a5a5b2ecddf2a078f5fe785591464700b651bd4 — People queue outside a Centrelink office in Sydney. In April alone, more than 221,000 people lost their jobs in NSW.Janie Barrett

When you add in the people on JobSeeker, the number of unemployed people in NSW is close to half a million.

Yet in the face of this deeply human crisis, somehow we can't agree that temporarily focusing public spending on getting as many of our 500,000 unemployed fellow citizens as possible back into work is more important than giving almost 410,000 public servants more public money.

The scary thing is, while April's job numbers were devastating, May could be worse. Unemployment is projected to rise further. When JobKeeper runs out in September the economic fallout could be catastrophic, unless we focus every spare dollar on creating opportunities that get people back into work.

We are rowing against a roaring tide. The argument that awarding a pay rise will stimulate the economy only holds water if the money gets spent. But in the current environment of uncertainty, people are far less likely to go out and spend up big.

What's more, while giving people more taxpayer money to spend might be appropriate in an “ordinary”, slow-burn recession, the current economic challenge is unlike anything we have seen.

This shock came suddenly, without warning, and to recover we need a shock of similar force in the opposite direction. Fiscal stimulus must get the biggest economic bang for the buck, creating as many jobs as possible, in the shortest time frame.

https://static.ffx.io/images/$zoom_0.53%2C$multiply_1.5109%2C$ratio_1.776846%2C$width_1059%2C$x_0%2C$y_8/t_crop_custom/q_62%2Cf_auto/0b881b7d58eb3fb52e989f47f8a79afb7737857b — Fiscal stimulus should aim to get the most people back into work as possible, as quickly as possible.Jason South

Our best hope is to inject that money directly into job-creating projects and programs, so for the greater good of the people of our state, that is the choice we have made.

Granted, it's not an easy choice. But it’s the least-worst option.

I know first-hand how hard our front-line workers have worked through this crisis. I think they deserve more than just a pay rise. But COVID-19 has no regard for what anyone deserves. Just ask the people queuing up outside Centrelink.

As a government, we have a limited amount of money to spend. It belongs to the 8 million people of NSW. For the greater good, we will spend it on what is best for everyone, not pay rises in a pandemic.

Dominic Perrottet is the Treasurer of NSW.