For more than a decade, Australia’s economic growth story has been written with the steady hum of a jobs printer in the background—one powered largely by taxpayer dollars. But that machine is beginning to stutter. And what comes next may say more about the country’s economic resilience than any budget paper or inflation target ever could.
The latest ABS Labour Account figures have delivered an unfamiliar message: the total number of filled jobs in the economy fell last quarter, marking the first contraction since the depths of the pandemic in early 2021. The surprise wasn’t just that the labour market paused, but where the loss came from.
According to Tarric Brooker, the journalist and analyst behind Burnout Economics, the slowdown has occurred in what he calls the “non-market” sector—public administration, education, health, and social assistance. These roles are almost entirely taxpayer-funded. “This has come to be known in some circles as the taxpayer-funded jobs printer,” he wrote in his latest Substack post. “And right now, it’s jammed.”
Australia’s reliance on non-market jobs is no minor subplot. In the early 2000s, such roles hovered around 22–23% of total employment. Now, they account for 30%, the fastest growth in the Anglosphere. That’s a structural shift, not a rounding error.
When that part of the economy goes quiet, it leaves a noticeable silence. Last quarter, the non-market sector lost 11,800 jobs. For context, since its last dip in Q1 2021, it had been adding an average of over 66,000 jobs each quarter. If you exclude the pandemic’s immediate distortions, Brooker says the average actually rises to 81,000.
This creates a concerning gap. Since Q2 2022—the quarter before the Albanese government took office—Australia added 1.05 million jobs. Nearly 70% of them were in the non-market sector. The private economy contributed just 337,100. “While this figure is not unprecedented,” Brooker notes, “the only time it has been achieved outside of the pandemic was during the slowdown in employment growth during the GFC.”
The figures since Q3 2023 are more lopsided. Just 39,700 private-sector jobs have been added, compared to 383,300 in the public-funded sphere. That’s roughly ten government-backed jobs for every private one.
Meanwhile, the working-age population keeps growing. From Q3 2023 to Q1 2025, it increased by 728,900. In the last six months alone, 256,800 more people entered working age. The jobs added across both market and non-market sectors during that time? Just 23,400.
This divergence—between population growth and employment creation—has an inevitable destination: rising unemployment. “If the trend seen over the last 6 months continues,” warns Brooker, “it will be just a matter of time before significant rises in unemployment begin to be seen in the ABS Labour Force figures.”
It’s a slow-burning warning, not yet reflected in the headline unemployment rate, but lurking beneath it.
So why has the public sector faltered now? Budgetary pressure is the short answer. Both Queensland and Victoria are pulling back on spending, attempting to rein in deficits that ballooned during the pandemic. Brooker cites the Queensland State Budget MYEFO as a signpost of what’s to come—fewer public sector expansions, more fiscal restraint.
Federal programs like the NDIS are still growing, but states and councils don’t have Canberra’s fiscal firepower. Their restraint could set the tone for job creation over the next year.
The question is whether the private economy is ready to pick up the slack.
So far, the answer appears to be no. The market-based sector has shown little sign of resurgence, and its inability to create jobs at scale during a time of high migration suggests a deeper structural weakness. From housing to energy, input costs remain high, and business confidence—while not bleak—is cautious.
Could the federal government simply fire up the jobs printer again? Technically yes. “After all,” Brooker writes, “the federal government and the states theoretically have plenty of scope to expand their debt loads at least for a time, even Victoria.”
But that option comes with baggage. For years, critics have warned of an economy becoming too reliant on taxpayer-funded jobs. If the answer to every private sector lull is another burst of hiring in healthcare or education, the structural imbalance becomes self-perpetuating. Growth looks good on paper, but risks becoming hollow.
On the other hand, a sharp pullback in public employment without a matching upswing in private hiring would quickly feed into unemployment figures, undercutting the political and economic narrative of a “soft landing.”
So the government—perhaps reluctantly—may find itself forced to choose between fuelling the debt or watching jobless queues lengthen.
What’s striking is how quiet this shift has been. The labour market, which has until recently been hailed as a pillar of post-COVID strength, is now showing the early signs of fatigue. The debate has not caught up to the data.
Brooker, whose Burnout Economics newsletter has gained a following for just this kind of granular analysis, points to the uncomfortable reality. “Whether this outcome is a temporary blip or something more serious and protracted is unclear,” he says. “But having an economy become reliant on taxpayer funded employment growth in the first place suggests that [restarting the jobs printer] would not be a surprising outcome.”
Therein lies the dilemma: if the private sector doesn’t wake up soon, the old machine may need to be restarted—despite all its flaws. Not because it’s the ideal choice, but because it may be the only one left.
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