Public servant paradise

Stop the presses, I've found a valid beneficiary to bash; public sector superannuation scheme recipients. While Lindsay Mitchell takes aim at drug abusing invalids beneficiaries (no, I'm not taking it personally), perhaps a look at the Labour Cost Index might show where a lot of public spending growth has gone. The trend is Billy bolded.

From the June 2004 quarter to the June 2005 quarter:

Surveyed labour costs rose 2.7 percent.
Non-wage labour costs rose 3.0 percent.
Annual leave and statutory holiday costs rose 2.9 percent.
Superannuation costs rose 7.3 percent.
Workplace accident insurance costs rose 7.2 percent.
Other non-wage labour costs (vehicles, medical insurance and low interest loans) fell 2.8 percent.
These results are final and revisions have been made to the indexes. Please see the Commentary for further details.

Biggest rises in Super and ACC.The commentary sez:

Employer superannuation costs increased 7.3 percent from the June 2004 quarter to the June 2005 quarter. This follows no change in the previous June year. The latest increase in superannuation costs was influenced by a 2.6 percent increase in salary and ordinary time wage rates.

In the public sector, superannuation costs rose by 15.2 percent, mainly due to the introduction of the State Sector Retirement Savings Scheme (SSRSS) and greater membership by teachers of retirement savings' schemes. From the June 2003 quarter to the June 2004 quarter, public sector superannuation costs decreased 3.1 percent.

Superannuation costs for the private sector increased 1.3 percent from the June 2004 quarter to the June 2005 quarter. This follows an increase of 2.5 percent in the previous June year.

From the June 2005 to the June 2006 quarter:

Surveyed labour costs rose 3.7 percent.
Non-wage labour costs rose 6.2 percent.
Annual leave and statutory holiday costs rose 7.1 percent.
Superannuation costs rose 6.6 percent.
Workplace accident insurance costs rose 4.8 percent.
Other non-wage labour costs (vehicles, medical insurance and low interest loans) rose 0.7 percent.

The two biggest rises that year were Holidays and Super. The commentary sez:

Employer superannuation costs increased 6.6 percent from the June 2005 quarter to the June 2006 quarter. This follows an increase of 7.3 percent in the previous June year. The latest increase in superannuation costs was influenced by a 3.3 percent increase in salary and ordinary time wage rates.

In the public sector, superannuation costs rose 12.3 percent, mainly due to the increase in the employer contribution rate of the State Sector Retirement Savings Scheme (SSRSS), which took effect from 1 July 2005. From the June 2004 quarter to the June 2005 quarter, public sector superannuation costs increased 15.2 percent, mainly reflecting the SSRSS, which was introduced from 1 July 2004.

Superannuation costs for the private sector increased 1.7 percent from the June 2005 quarter to the June 2006 quarter.

Can you spot the trend yet? Twenty-seven percent increases in public sector superannuation bonuses over two years and counting... Here comes another one...

From the June 2006 to the June 2007 quarter:

All labour costs rose 3.9 percent.
Salary and wage rates rose 3.2 percent.
Non-wage labour costs rose 8.1 percent.
Annual leave and statutory holiday costs rose 9.3 percent as a result of an increase in minimum annual leave entitlement.
Workplace accident insurance costs rose 9.3 percent.
Superannuation costs rose 4.2 percent.
Other non-wage labour costs (vehicles, medical insurance and low interest loans) rose 1.8 percent.

Super takes a break from blowing out the costs. This was the year that annual leave was raised from three weeks to four. The commentary explains:

Annual leave and statutory holiday costs increased 6.3 percent for public sector employees, down from the record 7.8 percent increase in the year to the June 2006 quarter. For the private sector, annual leave and statutory holiday costs rose 10.6 percent, the largest increase recorded for the private sector since the series began in the December 1992 quarter. One reason for the private sector increase being greater than the public sector increase was that fewer employees in the private sector were previously entitled to four weeks or more annual leave than in the public sector.

One thing to note about those ACC levies by the way, which in those three years have risen by 25 percent. Public sector pay level negotiations would not be nearly as affected by these levies half as much as their private sector counterparts. This is solely because public sector employers (the gummint) have the biggest taxpayer-augmented tits in the country. As for the private sector, it's much more zero sum for the workers, seeing as their smaller employers have less tit to hand around.

OK, back to the numbers. From the June 2007 quarter to the June 2008 quarter:

All labour costs rose 3.7 percent.
Salary and wage rates rose 3.5 percent.
Non-wage labour costs rose 4.1 percent.
Annual leave and statutory holiday costs rose 4.7 percent.
Workplace accident insurance costs rose 4.7 percent.
Superannuation costs rose 2.7 percent.
Other non-wage labour costs (vehicles, medical insurance and low interest loans) rose 0.3 percent.

Blah. Costs in line with the CPI. Not surprising seeing how there's a recession and an election year on the plate. KiwiSaver was also introduced, and the commentary makes an interesting observation on that:

In the four months from April 2008 to July 2008, employers reclaimed, on average, about 70 percent of their contributions to KiwiSaver schemes. In some industries, the proportion of  contributions reclaimed averaged about 90 percent, and in other industries, only about half was covered by tax credits.

That doesn't sound like a very egalitarian outcome! Anyway, on to this year. From the June 2008 quarter to the June 2009 quarter:

Surveyed labour costs rose 2.8 percent.
Non-wage labour costs rose 2.6 percent.
Annual leave and statutory holiday costs rose 0.3 percent.
Superannuation costs rose 30.8 percent.
Workplace accident insurance costs fell 2.5 percent.
Other non-wage labour costs (vehicles, medical insurance, and low interest loans) rose 1.7 percent. 
The LCI (all labour costs) indexes have been reweighted. For more information see the commentary section of this release.

Sweet Zombie Jesus in aspic, a 30 percent increase in superannuation costs. The commentary explains:

The main reason for the large increase in employer superannuation costs was the changes to employer contributions to employees' KiwiSaver schemes which took effect on 1 April 2009. Part of these changes involved an increase from 1 percent to 2 percent in employer compulsory minimum contributions to their employees' KiwiSaver schemes.

So it was the big switcheroo from tax credit to tax cut, which will be back out the door again as next year's ACC levy increase. Back to the commentary:

In the public sector, superannuation costs rose by 14.2 percent. Superannuation costs for the private sector increased 40.0 percent from the June 2008 quarter to the June 2009 quarter.

OK, public sector superannuation is a bit like the ACC story; largely unaffected by the tax cut swaparoo. Even so, the public sector still managed a 14 percent increase in super costs.

Over five years, public sector superannuation costs have risen over 50 percent cumulatively. When will the Benny bashers tame public sector superannuation? There's no PERFect storm of disapproval with this rort, just the usual easy targets.