After a recent blog that showed how the relative size of the Australian Federal Government is near an all-time low I was curious as to how the state and territory governments staked up.
Consider the most recent (2014) government employment figures from the Australian Bureau of Statistics. Nationally 8.1% of the population is employed by government (1% federal, 0.8% local and 6.3% state). For a comparison, consider the USA with a similar three tiered system (federal, State, Local) where about 16% of the population is employed by government (14% state and local and 2% Federal).[pullquote]Australia has about half as many bureaucrats per capita as the USA[/pullquote]Australia has about half as many bureaucrats per capita as the USA, and if I make the bold assumption that the number of government employees relates directly to the amount of red tape for businesses to wade through, then depending on your perspective this may demonstrate how over governed the USA is or explain why Australians are a bunch of free range yahoos.
Whilst Australia seems to keep the administration at controllable levels, your parochial side is curious about the difference between the states. Well, the percentage of the population employed by government it is remarkably consistent between the states (Figure 1). Tasmania has the highest percentage (9.4% of the population) and Victoria has the lowest (7.4%). For the territories (NT and ACT), the Northern territory has a pretty high percentage of the population on the government pay role (14%), but with a population around 250,000 it lacks the economies of scale that some of the larger states do. It will come as no surprise to anyone who has ever visited our nation’s capital that nearly 26% of the Australian Capital Territory population are government employees.
Figure 1: Government employees by state and territory as a percentage of population
I can see why the number of federal government employees is high in Canberra (19.6%), but I don’t understand why 6.3% of the population are employed by the ACT government. Hang on, it is about the same percentage as the other states you say, and ACT doesn’t have a local government plus they have to provide schools and hospitals just like the states, so ease up on the Canberra bashing. However the other states have huge areas to cover and lots of regional centres to service. Surely there are tremendous savings to be had in the ACT because it is just a single city. Western Australia for example is over 2.5M km2, Queensland is 1.7M km2. ACT by contrast is just over 2000km2. That is a state government employee for about every 15km2 in WA or one every 5.6km2 in Qld. By contrast there are over 10 ACT government employees for every square kilometre of the ACT.
So which Australian state is the most over governed? – The winner is ACT – OK it’s not actually a state, and neither is the Northern Territory (yet), so congratulations / commiserations go to Tasmania.
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