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Bricks and bureaucrats

Many public servants already have some idea of how the federal budget will affect their workplace. Several departments have asked staff to consider applying for a redundancy pay-out, saying the government's efficiency drive leaves them no choice but to shed a large number of jobs.

The spending cuts in next week's federal budget will clearly make life more difficult for Canberrans, though it's impossible to divine their precise effects on the ACT economy. Deloitte Access Economics isn't too worried, saying last week "we merely project poor growth in the short term"  rather than a contraction. On the other hand, when I used the Mid-Year Economic and Fiscal Outlook's projections of wage spending to guesstimate government employment levels, the data suggested the government would employ about 14,000 fewer full-time staff in three years' time.

Bricks and bureaucrats

One obvious effect, however, will be a lull, or even a drop, in Canberra's property prices. ACT housing prices don't tend to move in sync with markets elsewhere in Australia. Rather, the size of the Australian Public Service (which is roughly proportional to the number of Canberra-based jobs) is a pretty useful indicator of how the ACT's housing price index will move. It's a no-brainer, really: APS job levels are just another way of measuring housing demand.

If you're looking to buy or sell a home in Canberra, I'd look very closely at the budget's projected average staffing levels (you'll find them in Budget Paper No 1, statement 6).

1 comment so far

  • The figures show federal governments have added a combined total of about 60,000 public servants to the national payroll since 1997. Conservatively, this has added about $6 billion per annum to the cost of federal administration. Not counting the cost of the combined activities and inputs of such a large number of people. Mr Swan, a smaller administration would be more cost effective, and probably more capable. I wonder if you have considered this.

    Commenter
    Colin
    Location
    Kangaroo Ground Vic
    Date and time
    May 05, 2012, 12:49PM

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