“The only boom sector of the Australian economy is the public service, with the latest data revealing an explosion in the number and wages of bureaucrats across Australia,” said Dr Kevin You, Senior Research Fellow at the Institute of Public Affairs.
Today, an update to the Australian Bureau of Statistics’ Public Sector Employment and Earnings database, with the reference period up to the financial year ending June 2025, shows:
- Public sector employment across all levels of government grew by 82,000 over the financial year ending 2025.
- As of June 2025, there were almost 2.6 million federal, state, and local public sector employees, making up 18 per cent of all employees in Australia.
- The growth in public sector employees sits at approximately 3.26 per cent – more than double Australia’s population growth over the same period, approximately 1.60 per cent.
“It is not a coincidence that the growth of the public sector has occurred hand-in-hand with the collapse and stagnation in Australia’s economic productivity and per capita economic growth. Australia’s economy is increasingly becoming dominated by the public sector,” Dr You said.
The latest data from the ABS’ Average Weekly Earnings database, with the reference period of May 2025, further shows:
- Public sector employees earn approximately $96,309 per annum on average.
- Private sector employees earn approximately $76,424 per annum on average.
- This reflects a 26 per cent public sector premium. Even if just adult full-time employees are counted, public sector workers still earn roughly 10 per cent more than private sector workers on average.
“While frontline public sector jobs play a key role in maintaining a civil society, many bureaucratic roles are inefficient and counterproductive. These roles restrict, rather than expand, economic output, and are an increasing burden on taxpayers,” Dr You said.
“Worryingly, even the private sector is now increasingly reliant on taxpayer funding, with renewable handouts, consultancy fees, and subsidies for the support sector propping up private sector growth.”
Previous IPA research revealed that the federal government is set to employ more than 107,000 people in regulatory roles alone by the end of the 2026 financial year, which was more than half the entire federal workforce.
“The private sector is the engine of economic growth. A growing public sector means businesses spending more time in red tape compliance, and less time growing and employing more people, with increased costs passed on to customers,” Dr You said.
To download the IPA’s previous research click here.
