Why is our media so bad at accounting for inflation? In The Post today is a story about public sector job cuts (and Stuff is doing a good job trying to track all the announcements.) The story says the mean salary in the public service in 2017 when the Labour Government took office was $75,400, and now it is $97,200. The conclusion drawn is "there are more people in the core public service... and they are paid better". The first assertion is true. The second is not. Using the Reserve Bank calculator shows that a salary of $75,400 in 2017 would now have (on average) increased to $101,403. That suggests average public sector salaries have increased slower than those across the wider economy in the past 7 years. So the correct conclusion would have been: "there are more people in the core public sector...and they are paid, on average, slightly less than they were 7 years ago".
Greg Ellis
9mo
The media loves inflation when it suits some stories - like interest rates but in other situations inflation only gets in the way....
Carolyn Parker
9mo
Likewise population growth. Our population has grown around 10% since 2017, so some growth in the public service might be expected to maintain at least the same level of service. This tends not to be factored out when talking about increases in staffing levels.
Linda Meade
9mo
I'm also surprised no-one (?) appears to have worked out that when you effectively place a ban on the use of contractors and consultants (other than in very specific circumstances), that might lead to an increase in staff hired.
Thank you for your interesting post and all the comments that it generated. Much seems to be being said about “input” or “output” but little about “outcome” or “Level of Service”. I think that I could make my above observation as a general comment and alas it would still be true.
Nick Miller
9mo
Basic maths plus a bit of research seems to beyond some of our journalists
Jo Mackie
9mo
Nice analysis Chris Roberts! 🙌 I’m also struggling with negative references to ‘admin and back office staff’…as if they make no meaningful contribution to our public service?! 🤷🏻♀️
Steven Edelman
7mo
Are you familiar with current value accounting? It was a very popular and interesting area in the county years ago.
But there wouldn’t be a story in public sector pay cuts would there Chris?
MA Counselling (1st Class), PG Dip Education, BA
9moI similarly keep wondering about “back to 2017 levels” with no comments on if 2017 the public sector were at an appropriate level - and how much the need and population has increased since then.