The Importance of Public Services in Regional NSW

Jobs providing essential public services – like health care, education, safety, parks, and more – are a pillar of strength in Australia's labour market.  Public sector jobs are generally good jobs, with decent pay and more security than is typical of many private sector positions.  The strategic importance of public sector work is all the more visible in regional communities.  Job-creation in private businesses hasn't been adequate to meet the needs of most regional communities, as private activity is increasingly concentrated in the major cities.  So good jobs in schools, hospitals, and public administration are essential to the well-being of regional towns.  Public service workplaces in smaller communities also function as economic "anchors": keeping the local economy well grounded, and supporting many spin-off jobs in the private sector (in consumer goods and services, transportation, construction, and more).

Unfortunately, the positive economic potential of public sector work in regional communities has been undermined in recent years by misguided policies of fiscal austerity, which have placed more emphasis on cutting government spending than on supporting regional communities.  A new report from the Centre for Future Work documents the erosion of public sector work in regional communities in NSW, relative to overall labour market growth.  From 2011 to 2016 alone, this relative shrinkage was equivalent to the loss of 6000 public sector jobs in regional communities in the state.  Of the 20 communities which experienced the greatest loss of public sector jobs in NSW in that period, 18 were located in regional NSW.

And the total economic and fiscal costs from the relative erosion of public services across regional NSW extend far beyond those 6000 foregone jobs.  Consumer spending is reduced, because fewer people have good jobs with decent incomes.  Total regional economic activity is held back: there is less business "upstream" for the hundreds of businesses which supply public facilities with goods and services, and less business "downstream" for consumer spending because of foregone wages and salaries.  Even government itself experiences lost revenue: taxes that are not collected on foregone incomes, consumer spending, and value added.

The full report, The Economic Importance of Public Services in Regional Communities in NSW by Troy Henderson (Economist at the Centre for Future Work) provides a detailed breakdown of the shrinkage of public sector employment, and its economic and social consequences.  Instead of seeing public services as a "cost" or a "drain," government needs to see them as a productive, leading engine of economic activity.  By rebuilding public sector employment in regional NSW, the state government would significantly strengthen regional labour markets – and improve the quality of life in regional communities.

Please read the full report: The Economic Importance of Public Services in Regional Communities in NSW.


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