APS dollars staved off the worst of cost of living crisis: report

A growing number of federal public servants, and their salaries, are predicted to boost ACT's economy on par with the rest of the country, a new report from Deloitte Access Economics says.

The ACT's economy is expected to grow by 2 per cent in the 2024-25 financial year on the back of "strong growth" in public sector spending, combined with "a rebound" in household spending.

"Household consumption in the ACT has remained more resilient than in other states and territories due to the high proportion of workers employed by the Commonwealth public sector," Deloitte Access Economics partner and report author Stephen Smith said.

"Higher average wages and better job security in the ACT have helped to stave off the worst of the cost of living crisis."

The forecast comes after the size of the Australian Public Service workforce reached its decade peak while household spending in Canberra climbed to double the national average according to government data.

"Rising public sector employment and recovering household consumption are expected to underpin solid rates of economic growth in the ACT over the coming few years," Mr Smith said. "The [ACT's] economy is expected to grow at around the same pace as the wider Australian economy."

Canberra public servants in red shirts in support of Wear it Red day in June 2023, to get a better pay deal from the federal government. Picture by Karleen Minney.

The report found total household consumption increased by 0.3% in the December 2023 quarter, not only due to Canberrans spending more on essentials but also buying more recreation services.

During the same quarter, rental prices were "flat" and the rate of growth through the year was much lower than across the larger capital cities.

As one of the main reasons for overall inflation, fewer rent increases means the prices for goods and services in Canberra are expected to go up slower than national inflation rate in the 2024-25 financial year.

The report also stated international education was an important industry for the territory and made up the bulk of its overseas exports. As services exports increased by 1.8 per cent last quarter, further growth was likely as international student numbers returned to pre-pandemic levels.