New research finds that public sector employment is an important foundation of regional economies and is particularly important during crises such as the bushfires and COVID-19 pandemic.

Nurses, teachers, police, firefighters and other public servants not only protect us, keep us healthy, safe and educated; they are also the backbone of regional economies, according to a report just released by the University of Wollongong.

In particular, the income and spending from public sector employment in times of economic downturn and crisis is critical to regional economic survival, it says.

But the report warns that “The stimulus to regional economies from public sector employment and income in times of crises, when many are working longer and often unpaid hours, is also at risk from government-imposed wage freezes imposed in these same times under the guise of austerity.”

The study, commissioned by the South Coast Labour Council, focused on nine regional economies and communities in the south east of New South Wales. Many of these regions were heavily affected by the bushfires of 2019–20, leaving little time for recovery before all regions were affected by COVID-19’s economic impact.

The author of the report, Associate Professor Martin O’Brien, said public sector income was a stable feature of regional economies, which are vulnerable to weather events or unpredictable crises.

“A characteristic of Shoalhaven and other South Coast LGAs is their reliance on tourism. Tourism can be quite volatile and go through many economic fluctuations throughout the year. So in 2019–20 when the bushfires hit, the tourism season didn’t exist for many businesses and then the same when COVID-19 hit as well,” he said.

NSWNMA Shoalhaven Branch President Michael Clarke says the report confirms what nurses and midwives in the area have long felt.

“They appreciate that public sector pay rises go a long way to supporting the villages and towns that rely on visitors to our region,” he said.

The report highlights how public sector income in these areas is much more significant to the regional economy than otherwise found in the Greater Sydney area or Australia.

While public sector income contributes approximately 6.37 per cent to the Greater Sydney economy and 7.8 per cent Australia-wide, the research estimates public sector income exceeds 9 per cent of Eurobodalla and Shoalhaven’s economy; over 10 per cent in Snowy Monaro, Shellharbour and Wollongong; approximately 20 per cent in Kiama; and over 35 per cent of Queanbeyan-Palerang’s economy.

Universities, schools and hospitals are big employers

The report points out that these areas have public sector workplaces that are very large individual employers. For example, the University of Wollongong has more than 2500 direct employees, as well as contractors on campus and other indirect employment flow-on effects.

Likewise, hospitals and high schools are large individual employers.

One public health system nurse from Shoalhaven told the researchers that there were more than 500 nurses who worked at
her hospital.

“You wouldn’t want to close the hospital and lose 500 people who could contribute to your local economy, because I’m sure that would have an impact,” she said.

NSWNMA Assistant Secretary Shaye Candish says regional communities are indirect casualties of the NSW Government’s rigid policies on pay and staffing.

“Nurses and midwives have experienced low wages growth for the last decade, largely due to the NSW Government’s draconian wages cap.

“Just last year our members were forced to suffer the impact of an insulting 0.3 per cent wage rise, despite grappling with a health pandemic and the significant events of the summertime bushfires.

“Low wages force nurses and midwives to reconsider their personal budgets and the contributions they can make in local shops, cafes and businesses,” she said.

“As a community we must demand that this government adequately invests in public sector wages and implements nurse-to-patient ratios, to ensure that regions like Shoalhaven can prosper well into the future.”

How public sector workers boost local economies:

• most public sector workers spent approximately 80 per cent of their income at local businesses
• the relative stability of public sector employment and income throughout the year provides sustained stimulus
  to regional economies in months when business is traditionally slow
• resourcing large public sector organisations such as high school and hospitals in regions has a positive flow on effect to local business
• the relocation of public sector offices to regional areas can boost a variety of sectors in the local economy.

You can read the full report here