- The Guardian
- Issue #2131
“Unrealistic public sector pay claims risk an inflation budget hangover,” according to a recent Australian Financial Review (AFR) headline. The article is one in a number attacking “unrealistic” state government increases in public sector employment and wage rises.
“The wage rises have fed into a surge in government spending, which some economists say has added to inflation and prevented the Reserve Bank of Australia from cutting the cash rate.”
The claims do not stop there: “Ironically, public servants are seeking compensation for high inflation that has been exacerbated by the growth in the size and cost of the public sector.” Apparently the AFR can’t see the irony in the fact that public sector pay deals have “pushed public sector wages growth above the private sector.” No mention of how historically the public sector has led on wage rises or the decades where wages stagnated or declined in real terms.
Wages for many public sector workers are too low to afford housing and other essentials. Public sector wage rises are catch-up with inflation. It’s not surprising that public sector workers are taking actions across Australia seeking a living wage and better working conditions. Wages chase inflation.
It ignores the importance of the public sector to working people and their families. It fails to mention the critical role the public sector plays in the economy or the times when public spending has prevented a recession. If the ruling class the AFR speaks for had its way it would slash the public service and privatise whatever it could.
Woolworths and Coles have made a major contribution to price rises, hiking prices of food and other products by anything upwards of 15 per cent or 25 per cent in one year. Governments have to all intents and purposes destroyed public housing. With the private sector moving in, with no competition from the public sector, housing prices have gone through the roof – another source of inflation and a major contributor to the cost-of-living crisis.
The public sector supports demand through government spending on public goods and services. It creates jobs through public investment in infrastructure and other projects. Its employees create demand through the purchase of goods and services across society. Increasing the wages of public sector workers would increase demand, create jobs and so boost the economy.
Above all, the public sector provides essential services for the good of the people such as public healthcare, public education and public transport. Increasing public early childhood and education centres, residential and in-home aged care funding, and public housing would result in cheaper and high quality services. It would remove the profit motive. Directing funding from private to public education would see public education adequately staffed and resourced with better outcomes for students. Nationalising previously privatised utilities, transport, telecommunications and other essential services provides the basis for quality and affordable services.
Are all of these inflationary? No. Are workers’ wage rises inflationary? No. Are workers to blame for the Reserve Bank not lowering interest rates? No. Is the private sector to blame with its profit-driven hiking of price rises? Yes.
Under monopoly capital the government is the means to an end. It is used to hold down wages and working conditions and suppress struggle. It conducts foreign policy in the interest of the largest corporations; acts in their interests with deregulation, privatisation, free trade agreements, provision of infrastructure, tax concessions, handouts; and comes to their rescue during times of crisis.
This relationship with monopoly capital goes much deeper than just legislation and state machinery. An examination of leading policy making bodies, government inquiries, ministerial advisers, and the like reveals that corporate representatives play a critical role in the processes of government and policy making.
Put public first, award a living wage to all workers!
