IPA Commends Government For Addressing Australia’s K-Shaped Recession

“The Morrison Government should be congratulated for ensuring that public servants have a stake in the performance of the broader economy. Throughout the lockdown-induced recession, public servants have been completely insulated from negative economic impacts while private sector workers lost jobs and wages at an astonishing rate,” said Cian Hussey, Research Fellow at free market think tank the Institute of Public Affairs.

Today Assistant Minister to the Prime Minister and Cabinet, the Hon Ben Morton MP announced a new public sector wages policy to ensure Commonwealth public sector wage rises can no longer exceed wage rises in the private sector and allow Commonwealth public sector wage rises to follow private sector wage growth.

This comes after extensive research from the IPA highlighting Australia’s K-Shaped recession.

“Australia is experiencing a K-shaped recession, where public servants have been protected on the upward arm and mainstream Australians in the private sector, on the downward arm, have been hammered by lockdown measures,” said Mr Hussey

IPA analysis has found that since 14 March, 605,900 private sector workers have been thrown out of work while 23,700 public sector workers have been hired. This means that for every new public servant hired, 25 private sector workers have lost their job.

“This is the type of visionary leadership from Ben Morton that Australia requires during this private sector, small business recession. The Morrison government should be commended on its efforts to close the gap between the two Australias.”

“’To further enhance this bold reform, the public sector superannuation guarantee should be reduced from 15.4% to the private sector rate of 9.5%,” said Mr Hussey.