Australia’s Culture of Entitlement Is About to Change

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Good news.

Wage growth is finally exceeding the inflation rate.

As reported in Business Insider:

According to the Australian Bureau of Statistics (ABS), hourly wages excluding bonuses grew by 0.62% in the three months to September in seasonally adjusted terms, the fastest increase since early 2014.

The quarterly figure left growth over the year at 2.29%, the largest annual increase in three years.

But where did the growth in wages come from? (Emphasis is mine.)

Public sector workers enjoyed larger average pay rises over the year than those in the private sector, increasing by 2.47% and 2.14% respectively.

Is this the Government’s strategy to boost wages…employ more public servants and grant them higher wages?

If that’s the case — and I suspect it is — Queensland is setting the example for all other governments to follow.

The Australian, on 1 October 2018, published an article titled:

Public service growing twice as quickly as population in Queensland

Lucky us in the Sunshine State.

According to the article:

Over three years, the total public workforce has expanded by almost 11 per cent — equivalent to more than 23,000 full-time jobs — compared with population growth of less than 5 per cent.

And in spite of our Premier’s determination to build an overpaid and underworked bureaucracy, the latest ABS data states…

Queensland had the highest unemployment rate in the nation in both trend (6.2 per cent) and seasonally adjusted (6.3 per cent) terms.

Brisbane Times 15 November 2018

In case Governments — of all stripes — have forgotten, it’s the private sector that adds real value to the economy. Governments are roadblocks to productivity.

The greater the number of public servants, the higher the barriers to efficiency.

Government is the parasite that feeds off the private sector host.

The more you distort the reward versus risk equation in the employment stakes, the greater the number of people who’ll be inclined to drift from the private to public sector. You can’t blame people.

With better pay and all those taxpayer-funded perks, why wouldn’t they?

And if you’re asked to work a little harder in the public sector to justify your income, don’t worry, there are all sorts of ways to make sure this inconvenience can be avoided.

You can go on stress leave, make a claim of discrimination, or appeal to some obscure tribunal that’s been established to uphold worker’s rights.

Can’t lose.

It’s interesting to see the change in terminology from the ‘Public Service’ to the ‘Public Sector’. And with good reason.

Anyone who’s been into a government agency knows there’s precious little service given to the public these days.

The attitude of those behind the counter is more like that of a ‘master servant’ relationship…it’s as if they’re doing you a favour.

It seems to be lost on them that it’s your levies, fees, rates, registration costs, taxes and whatever other extortionist means they use to put their grubby fingers in your pocket, that’s keeping them in a job.

Personal note, my annoyance (partly) stems from a recent bad experience with a public ‘master’.

My frustration is with the culture of ‘entitlement’ that’s crept into society. The bloated public sector is just a symptom of a greater disease.

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Aussie’s are living beyond their means

After decades of living beyond our means, we (as a society) have become divorced from reality.

Indebted households demand more income to maintain the living standard they believe they’re entitled to. Sorry. That’s not how it works. Lower your sights. Borrow less.

Governments go deeper into debt to maintain the deeply entrenched Ponzi scheme called…welfare. We then need an overpaid bureaucracy — with staffing numbers to rival the size of a regional city — to manage this flawed model.

Governments need to exercise some ‘tough love’ because this system — besides being unaffordable and unsustainable — crushes the spirit of independence and promotes a culture of need and dependence.

But what Government is going to have the ‘kahunas’ to act with foresight?


The corporate sector borrows heavily to finance share buyback schemes and to fund higher dividend payments. These short-term ‘strategies’ are designed to deliver the bonuses the executives believe they’re entitled to and give shareholders the income and growth they’ve been told by the investment industry to expect.

The depressing reality is the higher the debt heap goes, the further we (as a society) become detached from reality.

The illusion has bred delusion.

The Government and its agencies are complicit in maintaining the illusion.

The ABS rolls out another set of ‘beautiful’ numbers…

Australia’s jobs boom has rolled on for another month, with a better-than-expected 32,800 jobs created in October.

That was enough to keep the unemployment rate steady at a six-and-a-half year low of 5 per cent.

ABC News 15 November 2018

Australia’s REAL employment figures

But, according to Roy Morgan Research, the ‘un and under’ employment picture is much bleaker that what the ABS is telling us.

The numbers compiled by Roy Morgan Research are based on a more realistic description of what constitutes real employment.

The following table is the last quarter data (August, September and October 2018) from Roy Morgan Research.

MoneyMorning 19-11-18

Source: Roy Morgan Research

[Click to open in a new window]

Unemployment — for October — is 9.4% and Under-employment is 9.2%.

In total, Roy Morgan Research estimates that 18.6% of employed persons in Australia are actually ‘un and under’ employed.

Here’s a tip for those looking for work, move to Queensland…our Premier will give you a very well-paid job.

When it comes to official data, there are so many false readings that it’s easy to see why the average person struggles with understanding what’s going on.

And so the ‘debt funded growth model’ splutters on.

However, you cannot fool all the people all the time.

According to ANZ’s Head of Australian Economics, David Plank, on 23 October 2018:

Confidence plunged by 6% last week, bringing the index to its lowest level since September 2017. There was no glimmer of better news in the subindices, with all confidence measures down sharply.

While the doctored data paints a rosy picture, people know something is not quite right.

Our economy is growing. True.

But it’s only growing because we keep borrowing more.

Higher debt levels and rising interest rates means the belt needs to tighten a little more.

Finding that extra notch in the belt is getting more difficult with higher energy costs AND governments (local, state and federal) hiking up their charges to pay for their bloated bureaucracies.

The ballooning [Queensland] public service has come at a big cost for taxpayers.

Public service employee expenses and superannuation were expected to cost $27.36 billion next year, about 47 per cent of total expenses, according to the budget.

That was expected to increase to $30.25 billion by 2021-22.

Brisbane Times 20 July 2018

This fantasyland we’ve been living in, is about to receive a very rude shock.

When the recent volatility on Wall Street moves into a full-blown correction, the shock waves will be felt around the world.

Falling property values will lead to a marked reduction in stamp duty revenues and capital gains tax receipts. State and Federal budgets will be awash in (even more) red ink.

A prolonged slowdown in economic activity — due to the Fed’s inability to make Lazarus rise again — is going to shatter the carefully crafted illusion of ‘we can borrow our way to prosperity’.

When that happens, the depressing reality will be just that…depressing.

The deeply ingrained culture of entitlement will mean greater demands on government to fix the problem. But in the end, governments with reduced revenues and growing debts, will need to make some tough choices.

The culture of entitlement may in due course be replaced by a culture of enlightenment. A time when people understand there’s no such thing as a free lunch.

However, the transition period from entitlement to enlightenment is going to be extremely painful…especially for those who surrendered their independence to a system that made promises it can no longer keep.


Vern Gowdie,
Editor, The Gowdie Letter

Free Report: In this free report, economy expert reveals four ways you could cash in on the global infrastructure boom. Download now.

About Vern Gowdie

Vern is a contributing editor to Money Morning — Australia’s biggest circulation daily financial email. (To have Money Morning delivered straight to your inbox you can subscribe for free here).

Vern has been involved in financial planning since 1986. In 1999, Personal Investor magazine ranked Vern as one of…

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