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Finance and Public Administration Legislation Committee
18/02/2019
Estimates
PRIME MINISTER AND CABINET PORTFOLIO
Australian Public Service Commission

Australian Public Service Commission

[11:02]

CHAIR ( Senator Paterson ): I welcome the Minister for Finance and the Public Service, Senator Hon. Mathias Cormann, representing the Prime Minister, and Mr Peter Woolcott, Australian Public Service Commissioner. The committee has set 29 March 2019 as the date by which answers to questions on notice are to be returned. Minister, do you wish to make an opening statement?

Senator Cormann: No, thank you.

CHAIR: Mr Woolcott, do you wish to make an opening statement?

Mr Woolcott : No, thank you.

Senator McALLISTER: The Prime Minister announced on 29 January in Brisbane that, as part of the 'Stronger Economy. Secure Future' plan the government would create 1.25 million jobs over the next five years. How many of those jobs will be public sector jobs?

Senator Cormann: I'll take that on notice.

Senator McALLISTER: You don't know?

Senator Cormann: What I can say to you, if you look at the ABS data, is that across the economy nine out of 10 jobs are private sector jobs—jobs where Australians work either for themselves or for a private sector business—and that just over one out of 10 jobs are public sector jobs. That is across the Australian economy as a whole. So I don't have any reason to believe that the proportions across the country as a whole are going to fundamentally alter, but what I can say is that, having promised back in 2013 to deliver one million jobs in the first five years of our period in government, it is a matter of public record that we have exceeded that. Indeed, more than 1.1 million jobs were created over the first five years and we have, of course, now passed 1.2 million additional jobs.

Senator McALLISTER: I understand your answer relates to the total proportion of jobs in the public and private sectors. The rate of jobs growth, though, has been different to that. The ratio hasn't been one in 10 new jobs created being in the public sector.

Senator Cormann: If you're talking about the federal Public Service, you're right. Given that when we came into government we inherited a deteriorating budget position and there was a need for budget repair, we made a decision—

Senator McALLISTER: Minister, I'm asking about the ABS statistics.

Senator Cormann: Well, I—

Senator McALLISTER: My question is—and you may not know the answer: what does the ABS tell us about the rate of growth?

Senator Cormann: Please, you've asked me a question, so I would like to answer it.

Senator McALLISTER: You're answering a different question. You are not answering the question I asked you.

CHAIR: It's five minutes past 11. Let's start on a better note than that, if we can. We have two days together.

Senator McALLISTER: We do.

Senator Cormann: Let's at least start somewhat constructively. As I've indicated, the proportions are roughly just under nine out of 10. Nine out of 10 jobs are private sector jobs across the economy. That is ABS data. Just over one out of ten jobs are public sector jobs. What I understood you're asking me is whether jobs growth in the public sector had been the same as jobs growth in the private sector. The answer is no on the basis that we have made a decision to first, on coming into government, reduce the size of the federal Public Service back down to 06-07 levels and to maintain it at that level while the budget is in deficit. In 2019-20, the budget is forecast to return to surplus. If you refer to budget paper 4 what it'll show is that it continues to be our intention to maintain the size of the federal public sector at 06-07 levels until such time as the budget is back in surplus, which is expected to be 2019-20.

Senator McALLISTER: Minister, the AFR on 8 January this year published an article by Tim Boyd saying:

The 2018 jobs boom in Australia was almost entirely driven by growth in public sector jobs, with private sector employment contracting through the year, analysis of ABS data has shown.

So the question I'm asking you is—you've released a strategy to create 1.25 million jobs—how do you consider the role of public sector employment in that strategy?

Senator Cormann: It depends on how much the public sector can afford to pay for additional public servants. When we came into government we inherited from the Labor Party a rapidly deteriorating budget position. It was a budget that was about three per cent as a share of GDP and deficit. This financial year we are at 0.3 per cent as a share of GDP and deficit, but we're projected to return to surplus. Obviously, our capacity to grow federal public sector employment was somewhat constrained by our difficult fiscal position, but, of course, across the economy it's a matter of public record and it's also consistent with ABS statistics that more than 1.2 million new jobs were created across the economy since September 2013.

Senator McALLISTER: Mr Woolcott, the previous APSC Commissioner once said that he believed the public sector should neither lead nor lag the private sector's wages and conditions. Do you agree?

Mr Woolcott : Yes, I think that's a fair comment.

Senator McALLISTER: Do you think the Commonwealth's wages policy has any macro effect in terms of overall demand in the economy?

Mr Woolcott : Are you asking my opinion?

Senator McALLISTER: I'm asking: have you sought advice about that as a matter of analysis?

Mr Woolcott : No, I haven't.

Senator McALLISTER: It's not an opinion. It's a question of economic—

Mr Woolcott : No, I have not sought advice on that.

Senator McALLISTER: Your predecessor didn't seek advice on that either. Do you intend to seek advice?

Mr Woolcott : I'll take that on notice.

Senator McALLISTER: Do you think the Commonwealth has a role as a model employer?

Mr Woolcott : Yes.

Senator McALLISTER: To the best of your knowledge, are these issues around the Commonwealth's role as a model employer, the impact of the Commonwealth on employment growth generally and the impact of Commonwealth employment on overall demand in the economy being considered as part of the ongoing review of the Public Service—

Mr Woolcott : As part of the ongoing—

Senator McALLISTER: Review of the Public Service being undertaken by Mr Thodey.

Mr Woolcott : That question might better be put to the Department of the Prime Minister and Cabinet and the review team secretariat. They will have a better sense of that.

Senator McALLISTER: Sure. Has the review team raised any of these issues with you?

Mr Woolcott : Not with me.

Senator McALLISTER: Mr Woolcott, do you have any concerns about the use of contractors in the Public Service and the impact of that on the capability and capacity of the Public Service?

Mr Woolcott : Contractors do provide an important degree of flexibility in terms of the employment practice of the Public Service. They are an important element in terms of the efficiency of the Public Service. They do jobs which may be temporary in nature or which the Public Service may not have the skills for. Used wisely and sensibly, I think that they're an important part of the overall composition of the workforce in the public sector.

Senator McALLISTER: I asked you if you had any concerns. Your answer hasn't provided any indication of concerns. Can I ask you again: do you have any concerns about the impact of contractors on the capability and capacity of the Public Service?

Mr Woolcott : It is a matter for each agency head to determine how he sets up his composition of the—

Senator McALLISTER: He or she.

Mr Woolcott : He or she, obviously. I apologise for that. It is a matter for the agency head how he or she determines the workforce composition. I'm not aware of any particular concerns having been brought to my attention in relation to the composition of that workforce.

Senator McALLISTER: That is truly remarkable. Can I ask a final question before I cede to Senator Dodson, or perhaps another senator. Have you asked commission staff to prepare materials to provide to the IPAA in your time in the role?

Mr Woolcott : No.

Senator McALLISTER: Thank you. Chair, Senator Dodson has some questions.

CHAIR: Sure. Senator Dodson.

Senator DODSON: Thank you. I have two questions about Indigenous jobs in the Australian Public Service. How has the rate and number of Indigenous employment changed over the term of the Abbott-Turnbull-Morrison government?

Mr Woolcott : I can answer those questions in relation to the Australian Public Service.

Senator DODSON: Yes.

Mr Woolcott : I don't have the figures for the wider employment community.

Senator DODSON: I'm asking them in relation to the Australian Public Service over those periods of previous governments and the current government.

Mr Woolcott : Okay. Indigenous representation in 2015 was 2.2 per cent in terms of the Commonwealth. In 2018, it was 2.9 per cent in terms of the Commonwealth. In terms of the APS itself, under the act, it was 2.6 per cent in 2015, and in 2018 it was 3.3 per cent. You will recall that under the Commonwealth Aboriginal and Torres Strait Islander Employment Strategy we announced a target of some three per cent Indigenous representation in the Commonwealth public sector by 2018. We are not there yet in terms of the overall Commonwealth public sector, but in terms of the APS we have gone ahead of that. My strong sense is that, in looking at the strategy for the future—and obviously we are still giving consideration to what we replace the current strategy with—we'll need to look at issues around retention and we'll need to look at issues around the seniority of Indigenous public servants, because I think at the most senior levels it is still way too low.

Senator DODSON: That was my second question: what level in the APS are First Nations peoples employed, and has that changed over the time?

Mr Woolcott : I don't have the figures to that degree of specificity. I could take that on notice.

Senator DODSON: Thank you.

Mr Woolcott : As I say, I think the number is about 24 Indigenous employees at the SES level, and that has not grown significantly in the last few years and that is an issue, as you say.

Senator DODSON: Thank you.

CHAIR: As there are no further questions for the APSC, I thank witnesses for their time and their evidence here this morning.