In Victoria’s lockdowns, it pays to be a public servant

“The significance of this is we have seen Victoria become divided,” IPA research fellow Cian Hussey said. “There is one group which is extremely affected by lockdowns and one group sheltered from the economic impact of lockdowns.

“The public sector workers are the ones who decided when to implement lockdowns and when to end them. and they haven’t suffered the economic fallout caused by lockdowns.”

The office of Victorian Employment Minister Jaala Pulford did not respond to a request for comment.

21 leave types

Two weeks ago the Victorian government said it would increase payroll taxes by $2.9 billion over four years to help fund mental health services in response to the pandemic.

Prominent psychiatrist Patrick McGorry said the funding increase was not enough because, in part, mental health workers needed to be paid more to make their working environments more pleasant.

Last week, public servants at Film Victoria, which subsidises movies and computer games, secured a 3.25 per cent pay rise and improved parental leave and long service leave. Movie theatres are closed, along with most other businesses in Victoria.

The Victorian public service workplace agreement has 21 sections covering different leave types. They include time off work for community activities, cultural ceremonies, gender transition, kinship care, personal rehabilitation, surrogacy and the Victoria First Peoples’ Assembly.

First-quarter reversal

Independent economist Saul Eslake said the IPA analysis was “undoubtedly correct” and demonstrated why the federal JobKeeper wage subsidy was introduced.

The situation was reversed, though, in the first three months of this year. Payments to private sector employees in Victoria rose 4.8 per cent and payments to public sector employees in the state fell 1 per cent in the quarter, Mr Eslake said.

The payments probably reflected the state government laying off casual and contract staff, and companies hiring.

Mr Eslake recently calculated that Victorians had lower disposable incomes than the residents of every state except South Australia.

At the turn of the century, Victorians had the third-highest disposable incomes, Mr Eslake said. The decline was because of poor administration by Liberal and Labor governments, he said.

One measure of economic health, state final demand, is higher in every state than before the pandemic except Victoria, according to the Bureau of Statistics. (State final demand is defined as a measurement of the total value of goods and services that are sold in a state to buyers who wish to either consume them or retain them in the form of capital assets.)

“The worry is that private demand will not recover as quickly in Victoria as elsewhere because of the dent in confidence from the higher number of the state’s COVID cases, the lockdowns and the uncertainty this has created for businesses,” said Innes Willox, chief executive of the Australian Industry Group.

“We are already seeing evidence of this in the official data. [Victoria] risks being lapped by NSW.”