Why does public administration capture 8.8% of employee compensation from 5.9% of hours worked?
Public Administration and Safety accounts for less than 6% of Australian hours worked but almost 9% of employee compensation — the largest positive gap of any industry. The statistic raises an intriguing question about why.
Australia’s Labour Account reveals an unusual mismatch in Public Administration and Safety.
In the June quarter 2026, the industry accounted for 5.85% of all hours actually worked but 8.80% of total employee compensation. The resulting +2.95 percentage-point gap is the largest of any Australian industry.
Put another way, employee compensation equated to about $89.75 for each hour worked in Public Administration and Safety, compared with $59.69 across all industries — a premium of roughly 50%.
For some industries, a large premium has an intuitive economic explanation. Mining, for example, generated 3.38% of employee compensation from 2.07% of hours worked. Mining is extraordinarily capital intensive and uses scarce specialised labour.
Public administration is less obvious.
The ABS category is broader than office-based bureaucracy: it includes government administration and courts, defence, police, fire and emergency services, corrections, regulation and border control.
Possible explanations include a relatively highly skilled workforce, public-sector wage structures and bargaining, overtime and allowances in safety occupations, higher employer superannuation contributions, or the outsourcing of lower-paid support functions into other industries.
None necessarily provides the full explanation.
Nor should the statistic be interpreted as proof of excessive public-sector pay or unusually high productivity. Public administration largely produces non-market services, making economic output and productivity particularly difficult to value.
But the question remains intriguing: why does an industry responsible for less than 6% of Australia’s working hours receive almost 9% of employee compensation?
Source: ABS, Labour Account Australia, June 2026, released 4 September 2026; seasonally adjusted industry series. Compensation of employees includes wages and salaries plus employer social contributions. Benchmark Analytics calculations from the industry data.