GFC puts focus back on government services

For most of the past decade, Australia was basking in the sunshine of good economic times. It was easy to think these good times would last forever.

The sudden collapse of the global financial system last year, however, was a reminder that we take economic prosperity for granted.

It also reminded us of the critical role of government in providing essential services.

We were reminded that leaving things to the ‘market’ means leaving things to chance.  And some things are simply too important for that.

In May this year the Public Service Association commissioned a report by independent economics consultancy Access Economics, asking them to determine the impact of the Global Financial Crisis on government services in New South Wales.

The report said that in the next few years, demand for public services would continue to rise.

Read the attached report

And as more people are affected by the GFC, and unemployment peaks, public services will become more important.

The report also warned the State Government against cutting public sector jobs and reducing government services.

In fact, the report by Access Economics actually said that the Government should not be afraid of short-term deficits to avoid the effects of an economic downturn. And that cutting spending during a downturn simply adds pressures to the broader economy and prolongs the time until recovery.

Therefore we need a Government not afraid to make the hard decisions.

If the Government is serious about mitigating the effects of the financial downturn on the New South Wales economy, it should not be afraid to increase spending and go into a temporary deficit.

In other words, shouldn’t privatisation and job cuts be the last thing on any Government’s mind?

With demand for Government services on the rise, maintaining or increasing public service employment levels will also be needed.

We cannot afford to sit back and continue to cut spending, freeze public sector jobs and outsource services at a time when the New South Wales community is most vulnerable, and public services are in most demand.

John Cahill
General Secretary,
Public Service Association of NSW