2.5 Million Australians Working in Public Sector Roles, Costing Taxpayers $232 Billion

Office workers are seen at lunch break at Martin Place in Sydney, Australia Dec. 12, 2018. AAP Image/Mick Tsikas

More than 2.5 million Australians work in government roles, costing the taxpayers $232 billion (US$150 billion), the Australian Bureau of Statistics (ABS) revealed.

Separate ABS data shows that 14.5 million people are employed in Australia. This means more than 17 percent of Australians work in public service, which equates to nearly one in six Australians.

Out of the public sector workers, 1.9 million were employed by state governments, 365,400 by the federal government (including defence personnel), and 213,500 by local governments.

New South Wales was the state that hired the most public servants across all levels of government at 707,600 employees, followed by Victoria 606,200, Queensland 506,900, and Western Australia 264,300.

The wage bill for public servants employed by state governments was $178.4 billion, federal $37.3 billion, and local $16.4 billion.

Total public sector employees in Australia increased by 3.6 percent between June 2023 and June 2024 with every jurisdiction employing more public servants.

Public Sector Jobs Are ‘Straight Out Costs to Government’: MP

Meanwhile, Liberal National Party MP Terry Young expressed concern about short term fixes and the cost of new public sector employees to the taxpayer.

“As the unemployment rate rises, Labor governments are forced to employ more public servants to keep the unemployment rate down,” he told Parliament on Nov. 18 (pdf).

“As evidenced in this term, for which data from the ABS shows that around 90 percent of new jobs in 2024 were in the public sector or industries like aged care or the NDIS, which are funded by the federal government.

“Of course, we need a healthy Public Service, but private sector jobs create revenue for government through taxes paid, whereas Public Service jobs are just straight out costs to government.”

Young said that with the fall in business confidence and tightening of their purse strings, Labor governments “begin to spend taxpayers money on splashing tax to help alleviate the inevitable hard times.” He described this as a “short-term fix” that just increases debt and inflation, only compounding the problem.

However, Treasurer Jim Chalmers said the government recognises its fiscal constraints when managing the federal budget.

“From budget to budget, we try ... to make sure that we’re striking the right balance, providing cost‑of‑living relief, putting downward pressure on inflation, fixing the budget, investing in the future, we’ve made clear those are our priorities,” he said.

Meanwhile, Shadow Finance Minister Jane Hume linked public sector spending at both the state and federal level to inflation.

“The biggest driver of inflation has been public sector spending at both state and federal levels. And it’s not just the Coalition saying this, it’s the IMF, it’s the Reserve Bank. And the only way to deal with a national crisis is with a national response.” she told Sky News.

“It is public sector spending across both state and federal that have kept pushing inflation higher and higher. We are now up to about 27.5 percent of GDP as public sector spending, that’s well up from the 22.5 percent of the previous decade before COVID.

“Just in my home state of Victoria, public sector spending has increased 7.7 percent in the last 12 months alone.”