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Austerity in Australia: A Threat to Gender Equality and Economic Growth

In the last few decades, developments in labour market participation by women have to a great extent been in the public service. One reason is that the majority of university graduates currently are female. These days, public service requires a university education, as it has become more knowledge based and professional. Another important reason public service is popular among women is that it provides a secured, standard job and better work/life balance. Surely this is not a universal development, but in most developed countries like Australia this is undoubtedly a notable change towards women’s empowerment and minimizing the gender gap in society.

However, the recent retrenchments and redundancies in public service make us doubtful about the sustenance of this development. News like, “Another 1,000 jobs cut from South Australia’s public sector” in The Advertiser, 30 May, 2012 or “A tough time to be a public servant: the 38k forgotten jobless” in Crikey, 10 July, 2012, make evident that whenever a government is in financial crisis public administration is always the easiest target to be adjusted. The Crikey report shows that 38,000 jobs have been culled from state and federal public service over the past few years, and a further 24,000 positions may follow. It becomes more shocking when the South Australian opposition leader announces a plan to cut an additional 20,000 public sector jobs, and Hon. Joe Hockey warns his party will cut another 12,000 public servants from Canberra if elected in upcoming election in September this year.

The present government argues that they are culling jobs, wages and expenditures in public service to control deficits in the financial crisis; because, they say, bureaucrats are bloated and they must learn to do more with less. This demonstrates that the political climate in Australia is blatantly influenced by the austerity strategy of Europe and America for rapid fiscal consolidation after the great recession, without even assessing the consequence.

Now, is austerity appropriate for Australia? After a careful cross-country review of literature, some important arguments are explored:

 

Firstly, Is Slim Public Service Also Healthy?

Public sector efficacy and capacity is determined by its staffing pattern and available funding. The State of the Public Service: An alternative report, 2011, shows that in Australia public sector funding represents only 35 percent of Australia’s GDP, whereas the United Kingdom spends 47 percent. Nevertheless, Australia already spends a very moderate share of its GDP on public sector investment.

Again economists argue that Australia has a low national net debt, and therefore, job and expenditure cuts in the public sector are not a timely attempt to stimulate the economy. Rather, they will only affect the government services and programme delivery. Although ‘big-government’ critiques assert that governments are prone to be sluggish, corrupted and inefficient, studies consistently indicate that citizens still prefer and trust government for services and security. However, statistics show that in Australia in 1991, there was one public servant for every 106 Australians, but in 2009 there was one for every 135 Australians. Therefore, more job cuts will surely compromise service delivery quite largely.

 

Secondly, Is Public Service Really Bloated?

Job cuts in crisis times are not necessarily a bad thing. But, the scale and necessity have to be assessed first. In the Australian context, the bloated public sector concept is criticized on the ground that Australian Public Service (APS) employees are not excessive at all if comparing with population growth. The State of the Australian Public Service: An alternative report, 2011, argues that if the politicians are committed to downsize government, they must establish that:

  • Citizen’s preferences are shifting towards private alternate services
  • An increasing population does not require an increase in public sector staff
  • Government agencies will be efficient enough for service delivery and other purposes with fewer staffs and reduced budget.

 

Thirdly, Does Austerity Boost Growth?

It has already been exposed in Europe that austerity measures are not effective for boosting economic growth, rather they have caused slow to negative growth by worsening the overall unemployment situation. Workers find themselves in an age of transition driven by increased job insecurity, lower pay, worse working conditions, stress, time poverty and an unpredictable work/life balance coupled with increased spending in matters like childcare and elderly care from market supported alternatives.

Hence, government investments as well as efficient public service are proving to be indispensible for a country’s growth and prosperity.

 

Finally, When Gender Equality is a Concern…

Researchers have found that initially the recession may have impacted male employment more, with male-dominated fields such as manufacturing and construction suffering. The policy changes in the second phase have crucially impacted more female concentrated occupations such as health, education and public service. In 2012, the International Labor Organization commented that the unprecedented public sector adjustments (primarily quantitative) combined with lack of social dialogue between government and employees had lowered job security, wages and work conditions in European public sectors and therefore, had affected women’s employment most (as women are the majority in public service).

Diane Elson in a 2012 Conversation article titled, “Women are paying the price for economic austerity,” points out that because of massive austerity measures in the UK’s public sector, unemployment for women rose to an unprecedented level of 7.7 percent in first quarter of 2012, and women’s labour force participation fell at the same time due to a discouraging lack of job opportunities and the issue of combining work with family responsibilities. She also argues that women’s incomes will be hit harder even though their income still remains lower than men. Women will pay the price of austerity in 5.8 billion pounds, while men will in 2.2 billion pounds.

Jill Rubery has summarized the importance of continued public sector investments for sustaining gender equality, in the following points:

  • High quality jobs with premium pay for higher educated women
  • Regular and available family-friendly provisions and leave entitlements to enable better work/life balance
  • Good pensions and compensation for women’s interrupted careers
  • Showcasing public sector policies and funding for promoting gender equality for the private sector
  • Employment cuts, pay cuts, contract changes, outsourcing, less available job opportunities will discourage women from seeking employment, and therefore, these will create a shortage of skilled and educated workers.

Therefore, from international experience Australia should note that austerity is not only detrimental for economic growth, but also harmful for gender equality.  Also, it is evident that the APS has not grown out of control. The bottom line is austerity is neither expected nor appropriate for Australia in regard to its present economic circumstances.

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Author: Syeda Nuzhat-E-Ibrat, MPhil student, Politics and International Studies, University of Adelaide, South Australia. Email: [email protected]

 

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The American Society for Public Administration is the largest and most prominent professional association for public administration. It is dedicated to advancing the art, science, teaching and practice of public and non-profit administration.

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