The contribution of public sector wages to Shoalhaven’s economy grew during the prolonged crises of Black Summer bushfires and COVID-19, according to a new University of Wollongong report which for the first time has measured the impact of the wages at a local government level.

The report, commissioned by the South Coast Labour Council, measured the annual contribution of public sector income to the Gross Regional Product (GRP) of Bega Valley, Eurobodalla, Snowy Monaro, Queanbeyan-Palerang, Shoalhaven, Wingecarribee, Kiama, Shellharbour, and Wollongong between 2015/16 to 2020/21.  The report is available here. 

“This is the most granular we have ever seen the impact of the public sector measured,” said the report author, Associate Professor Martin O’Brien. “This is the first time we’ve looked at it at an LGA level, and the data shows secure public sector employment doesn’t just benefit the worker, it actually flows through to the whole community.” 

The report found not only was public sector employment a greater proportion of the labour market in the nine LGAs, during the extended crises of the bushfires and COVID-19 the public services contribution to the regional economy also grew. It found in Shoalhaven the contribution grew 2.2%, to contribute 12.1% to the area’s GRP. By comparison the contribution in Greater Sydney grew 0.8% over the same period. 

“We know public sector workers spend 80% of their wage in their community – when you’re in a tourist town hit with the double whammy of bushfires and then a global pandemic the customer who is a local teacher, nurse, fiery or Service NSW worker becomes your lifeline,” said South Coast Labour Council Secretary, Arthur Rorris.

“Public sector employees work, live, and spend all year round. This report demonstrates, during prolonged crises such as bushfires and COVID-19 their paychecks actually provide stimulus to their communities.”

Shaye Candish, Assistant Secretary of the NSW Nurses and Midwives Association said: “We have long argued the overwhelming benefits of investing in nurses and midwives’ wages to secure the future of our public health workforce. This report further demonstrates why appropriately renumerating public sector nurses and midwives is vital for Shoalhaven’s regional economy.

“Despite the bushfires and ongoing COVID-19 pandemic, our members still aspire to a work-life balance, but low wages growth forces them to carefully consider their contributions in local shops, cafes and businesses. After all our members have endured and persevered through, we’re calling on the NSW government to invest in public health workers through fair pay and conditions, ensuring regions like Shoalhaven can prosper.”

Overall public sector employment makes up 13.36% of the Greater Sydney labour market and 15.37% of the Australian labour market, but this study shows that in regional labour markets it is much higher. In the Shoalhaven it accounts for 17.82% and in Queanbeyan-Palerang, for example, these workers account for almost a third of the entire labour market.

The report found public sector wages provide a solid economic base during annual fluctuations, such as seasonal tourism or agriculture, and during crises this impact is amplified. Ultimately the report says the contribution public sector income makes to the GRP could have been higher and provided greater stimulus had the NSW government not frozen public sector wages.

“A modest 2.5% pay increase would have likely been significantly amplified across the regions. Instead the government chose the path of austerity which hurt all workers, not just the ones with the frozen wages” said Troy Wright, Assistant Secretary of the Public Service Association of NSW.