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Category: State: NSW

  • NSW Workers’ Compensation System has Ample Resources to Maintain Benefits

    Wages & Entitlements

    NSW Workers’ Compensation System has Ample Resources to Maintain Benefits

    by Jim Stanford

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    Jim Stanford

    The workers’ compensation system in NSW has been dramatically scaled back and restructured since the current state government came to office in 2011.  Real benefit payouts have been cut by 30 percent, with the resulting “savings” passed on to employers in lower premiums (down 40 percent over the past decade).  Yet injured workers continue to bear the real cost of these changes, with benefit cuts (and further premium cuts) still occurring.  Over 4000 workers will have their monthly benefits cancelled entirely later this month.

    The changes were all justified by a supposed fiscal “emergency” that existed in 2011, but that deficit was exaggerated and mostly the result of temporary factors connected to the Global Financial Crisis.  Now the system boats a large and growing accumulated surplus.  Annual financial reports released by the NSW workers insurance scheme last week confirm that the system has ample financial reserves with which to fund the maintenance and improvement of benefits for injured workers.

    See our full 4-page fact sheet on the financial condition of the NSW Workers’ Compensation system for more details on the size of the accumulated surplus, other “hidden” financial cushions, and the extent of the benefit cuts that have been endured by injured workers in the state.



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  • Job Opportunity – Research Economist

    Job Opportunity – Research Economist

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    The Centre for Future Work invites applications for an economist to join our research team in labour market research and policy analysis, working from our offices in Sydney or Canberra.

    Deadline for applications is December 21 2017.

    It’s a chance to be part of our growing team, and to make a contribution to strong, progressive policy research on jobs, employment, fairness, and the future of work!

    Please download the full notice below for more details.


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  • False Economies: The Unintended Consequences of NSW Public Sector Wage Restraint

    Public Sector, Procurement & Privatisation, Wages & Entitlements

    False Economies: The Unintended Consequences of NSW Public Sector Wage Restraint

    by Troy Henderson and Jim Stanford

    Authors

    Troy Henderson

    Jim Stanford

    Budget-cutting political leaders regularly target the jobs and incomes of public sector workers as the first and most politically convenient target of their austerity measures. But their crusade to balance the books by downsizing headcounts, intensifying work, and freezing the pay of the workers who deliver essential public services can backfire. In this new report, Troy Henderson and Jim Stanford consider the unintended consequences of one prominent austerity measure: the cap on public sector wage increases that has been in place in New South Wales since 2011.

    The report considers the fiscal and economic context for the pay freeze, disproving claims that public sector employment was “bloated” before the freeze was imposed.  It then lists five unintended, harmful side-effects of the ongoing wage cap, including:

    1. Over the five years from 2011 through 2016, the state’s public sector wage suppression reduced consumer spending in the state by a cumulative total of some $3.4 billion, harming businesses large and small.
    2. Australia’s national GDP was reduced by an estimated cumulative total of almost $8 billion over the 2011-16 period.
    3. The NSW government’s wage austerity therefore reduced its own revenue (through that reduction in GDP) by an estimated $1.2 billion over the 2001-16 period.
    4. Each public sector worker’s “workload” increased by 7.5 percent in the last five years – yet the wages policy in fact suppresses true productivity growth in the public sector.
    5. The NSW government’s extraordinary interventions, removing normal wage bargaining rights from a significant and influential section of the state labour market, have contributed to the unprecedented stagnation of wages in the overall state labour market – one that the government itself admits is hampering both economic growth and fiscal well-being.

    The longer the wage cap remains in place, the larger will these costs (of foregone consumer spending, offsetting reductions in state revenues, and the spillover impact onto private labour market outcomes) become.

    This report was commissioned by the NSW branch of the Health Services Union.



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  • Jobs and Growth… and a Few Hard Numbers

    Jobs and Growth… and a Few Hard Numbers

    by Jim Stanford

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    Voters typically rank economic issues among their top concerns. And campaigning politicians regularly make bold (but vague) pronouncements regarding their competence and credibility as “economic managers.”  In popular discourse, economic “competence” is commonly equated with being “business-friendly.”

    However, the economy consists of more than just private businesses – and certainly more than the large businesses which attract the main attention from politicians and reporters.  Other stakeholders are at least as crucial for powering real economic progress: including workers, households, governments at all levels, small businesses, public and non-profit institutions, NGOs and the voluntary sector, and more.  So being “business-friendly” is no guarantee that the real economy (measured by employment, output, and incomes) will automatically improve.  Having a more complete understanding of all of the different ingredients required for economic progress is necessary, in order to properly analyze the likely impact of specific measures.

    To demonstrate the lack of correlation between a government’s stated economic orientation, and the actual performance of the real economy, this briefing paper compiles historical data on twelve standard indicators of economic performance: including employment, unemployment, real output, investment (of various forms), foreign trade, incomes, and debt burdens.  Consistent annual data is gathered going back to the 1950s, allowing for a statistical comparison of Australia’s economic record under the various post-war Prime Ministers.  We compare Australia’s economic performance under each Prime Minister, on the basis of these twelve selected indicators.

    There is no obvious correlation between these respective swings in Australia’s economic history, and the policy orientation of the government that oversaw them. And the statistical review indicates that the present government, regardless of its business-friendly credentials, has in fact presided over one of the weakest economic periods in Australia’s entire postwar history.


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