Budget Review 2010-11

Budget Review 2010-11 Index

Budget 2010–11: Public Sector

Australian Public Service

Dr Nicholas Horne

Background

Australian Public Service staffing

The 2009–10 Budget estimated that the total average staffing level (ASL) for Australian Government general government sector agencies in 2009–10 would be 253 318 ASL after a estimated staffing increase of 2 750 ASL over 2009–10.[1] The 2010–11 Budget gives a revised estimate of 258 321 ASL for agencies for 2009–10.[2] ASL figures are not a headcount but rather:

... reflect the average number of employees receiving salary or wages over the financial year, with adjustments for casual and part time staff, to show the full-time equivalent. This also includes non-uniformed staff and overseas personnel.[3]

In September 2009 the Minister for Finance and Deregulation, the Hon Lindsay Tanner MP, indicated that the Government would be seeking ‘savings and efficiencies’ in government administration for the 2010–11 Budget.[4] In April 2010 Minister Tanner stated that the Government had ‘no plan to cut overall public service numbers’, and that:

… our focus will always be on getting better efficiency and on getting better targeted programs. That inevitably means that there’ll be changes upward and downward in particular agencies. That’s always going to be the case … We have no agenda to slash public service jobs.[5]

In the lead-up to the 2010–11 Budget there was some speculation concerning positions at the Department of Climate Change further to the deferment of the Government’s Carbon Pollution Reduction Scheme.[6] In April 2010 the Department of Climate Change stated that it ‘has offered no redundancies to staff’ and that there are ‘no plans in the immediate future for redundancies’.[7]

The Community and Public Sector Union (CPSU) was reported as being concerned regarding possible staff reductions at the Australian Tax Office and in the Immigration portfolio.[8] It was also reported that internal Commonwealth Scientific and Industrial Research Organisation (CSIRO) documents noted the possible reduction of 500 positions at the CSIRO due to the need to find savings.[9]

Coordinated procurement

In February 2008 the Government announced that it would be pursuing greater coordination of government procurement of goods and services.[10] A number of cooperative and whole-of-government procurement arrangements are in place or in process including procurement for government printing, data centres, telecommunications products and services, major office machines, and air travel for Australian Public Service (APS) agencies and Parliamentarians.[11]

Reform of government administration

In September 2009 the Prime Minister, the Hon Kevin Rudd MP, announced the establishment of an Advisory Group to be tasked with developing a ‘blueprint for reform’ of the APS.[12] The Advisory Group on Reform of Australian Government Administration completed its final report in March 2010 and proposed a number of reforms including restructuring and augmenting the role of the Australian Public Service Commission (APSC) and reviewing existing efficiency mechanisms within the APS such as the efficiency dividend.[13] In May 2010, shortly before the 2010–11 Budget, the Prime Minister announced that the Government had accepted the Advisory Group’s recommendations in full.[14]

2010–11 Budget measures

Administrative efficiencies and savings

As noted above, in September 2009 the Government indicated that it would be pursuing efficiencies for the 2010–11 Budget. Finance Minister Tanner has stated that efficiency measures in the Budget will generate savings of $1.2 billion over four years, and that the Rudd Government has ‘achieved savings of more than $8.5 billion from reducing waste and inefficiency’ since taking office.[15]

The Budget also identifies the following estimated savings arising from the Government’s implementation of coordinated procurement arrangements:

• $1 billion in estimated savings over the next 10–15 years arising from whole-of-government data centre procurement
• $4.2 million in estimated net savings over 2010–14 arising from whole-of-government procurement of major office machines, and
• $160 million in estimated savings over 2010–14 arising from whole-of-government air travel procurement arrangements for APS agencies and parliamentarians.[16]

The Budget further states that the Government will continue to limit real growth in government expenditure to 2 per cent per annum until a budget surplus of 1 per cent of Gross Domestic Product is achieved.[17]

In addition, it has been reported that the current annual 1.25 per cent efficiency dividend applied to agencies will be reduced to 1 per cent per annum from 2011–12.[18]

Australian Public Service staffing

For 2010–11 the Budget estimates the total ASL for Australian Government general government sector agencies to be 258 704 ASL.[19] This represents an overall estimated increase of 383 ASL on 2009–10 levels (258 321 ASL). For 2010–11 the Budget also estimates:

• total ASL reductions for agencies of 4 278 ASL, and
• total ASL gains for agencies of 4 661 ASL.[20]

The largest estimated ASL reductions are for Centrelink (–1 880 ASL), the Department of Education, Employment and Workplace Relations (–525 ASL), and Defence military personnel (–501 ASL). The largest estimated ASL gains are for Department of Defence civilian staff (+1 470 ASL), Defence reserves (+444 ASL), and the Department of Innovation, Industry, Science and Research (+315 ASL).[21] Estimated ASL changes in 2010–11 for each portfolio and for selected agencies are set out in Table 1 below.

Reform of government administration

As noted above, in May 2010 the Government accepted all of the recommendations of the Advisory Group on Reform of Australian Government Administration, including augmentation of the role of the APSC. The 2010–11 Budget provides $38.7 million for the APSC over 2010–13 to facilitate its expanded role and responsibilities.[22] The APSC will:

• be responsible for implementation of half of the Advisory Group’s recommendations and ‘have a reporting role to government on the overall implementation of the reform strategy across the APS’
• take on a ‘central, leadership role in providing expertise, guidance, performance monitoring and some centralised services to all agencies’, and
• take over the policy function for ‘agreement-making, classification structures, APS pay and employment conditions, work level standards and workplace relations advice from the Department of Education, Employment and Workplace Relations’.[23]

The APSC is also estimated to gain a staffing increase of 42 ASL in 2010–11.

Reaction to the 2010–11 Budget

Media coverage of the Budget in relation to the APS has focused on resourcing in the portfolios and agencies, including the increased resourcing for the APSC in the context of the reform of government administration.[24]

Opposition Senator Gary Humphries was reported in the media as being pleased that expected APS staff cuts did not materialise, but also concerned regarding future APS staffing levels in the context of government debt.[25] Family First Senator Steve Fielding was highly critical of the estimated ASL increases for the Department of the Prime Minister and Cabinet.[26]

The CPSU noted that the overall size of the APS would be largely unchanged. The Union endorsed the extra resourcing for Defence and the Australian Bureau of Statistics, but expressed concern over the estimated reductions at Centrelink and the Australian Customs and Border Protection Service. The CPSU further stated that it was ‘a great pity’ that the Government did not abolish the efficiency dividend in the Budget.[27]

Table 1: estimated portfolio and agency ASL changes 2010–11

The following table, extracted from Budget Strategy and Outlook: Budget Paper No. 1: 2010–11, sets out the estimated ASL changes (reductions or gains) in 2010–11 for each portfolio and for selected agencies. As the table indicates, ASL reductions and gains vary considerably among agencies and both within and across portfolios.

While the estimated ASL changes in the Budget papers draw on figures provided by agencies, it should be noted that they are estimates only and that agencies determine their own staffing levels subject to requirements.

Table 1: Estimated portfolio and agency ASL changes 2010–11

Source: Budget Paper No. 1, pp. 6–68—6–71.

[1].    Australian Government, Budget Strategy and Outlook: Budget Paper No. 1: 2009–10, Commonwealth of Australia, Canberra, 2009, p. 6–48, viewed 17 May 2010, http://www.budget.gov.au/2009-10/content/bp1/downloads/bp_1.pdf

[2].    Australian Government, Budget Strategy and Outlook: Budget Paper No. 1: 2010–11, Commonwealth of Australia, Canberra, 2010, p. 6–50, viewed 17 May 2010, http://www.budget.gov.au/2010-11/content/bp1/download/bp1.pdf

[3].    Ibid., p. 6–71.

[4].    L Tanner (Minister for Finance and Deregulation), Statement by the Minister for Finance and Deregulation, the Hon Lindsay Tanner, MP: Fiscal policy, media release, 16 September 2009, p. 4, viewed 17 May 2010,        http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2FVPPU6%22. For media comment see L Tingle, ‘Tanner calls for early cost cuts’, Australian Financial Review, 17 September 2009; L Dodson, ‘Razor gang gets an early start’, Australian Financial Review, 29 September 2009.

[5].    L Tanner (Minister for Finance and Deregulation), Doorstop interview: International Monetary Fund’s World Economic Outlook, media release, 22 April 2010, p. 3, viewed 17 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2FSVNW6%22

[6].    S Maher, ‘Public service fears job cuts’, The Australian, 11 May 2010; C Johnson, ‘Work climate changes for hundreds of public servants’, Canberra Times, 29 April 2010; S Benson, ‘Department of Hot Air costing $90m’, Daily Telegraph, 29 April 2010.

[7].    Senate Finance and Public Administration Committee, Answers to Questions on Notice, Prime Minister and Cabinet Portfolio, Additional Estimates 2009–10, 8 and 9 February 2010, Question CC19, viewed 17 May 2010, http://www.aph.gov.au/Senate/committee/fapa_ctte/estimates/add_0910/climate_change/CC19.pdf

[8].    S Maher, ‘Public service fears job cuts’, op. cit.

[9].    R Beeby, ‘CSIRO looks at cutting 500 jobs’, Canberra Times, 6 May 2010.

[10]. L Tanner (Minister for Finance and Deregulation), ‘Address to the National Press Club’, 6 February 2008, viewed 17 May 2010, http://www.financeminister.gov.au/speeches/2008/sp_20080206.html

[11]. A listing of current and proposed coordinated procurement arrangements, including links to relevant source documentation, is available at the Department of Finance and Deregulation website, http://www.finance.gov.au/procurement/wog-procurement/index.html

[12]. K Rudd (Prime Minister), ‘Speech to the Australia New Zealand School of Government Annual Conference (John Paterson Oration)’, 3 September 2009, p. 11, viewed 17 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2F1VKU6%22

[13]. Advisory Group on Reform of Australian Government Administration, Ahead of the Game: Blueprint for the Reform of Australian Government Administration, Department of the Prime Minister and Cabinet, Canberra, 2010, pp. 52–53, 67–68, 79, viewed 17 May 2010, http://www.dpmc.gov.au/publications/aga_reform/aga_reform_blueprint/docs/APS_reform_blueprint.pdf

[14]. K Rudd (Prime Minister), ‘A new era for the Australian Public Service and the ANU: Speech at the opening of the J. G. Crawford Building at the ANU’, 8 May 2010, p. 9, viewed 17 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2FEUNW6%22

[15]. L Tanner (Minister for Finance and Deregulation), Budget Delivers More than $1.2 Billion in Efficiencies from Government Operations, media release, 17 May 2010, viewed 17 May 2010, http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2F8MOW6%22

[16]. Australian Government, Budget Measures: Budget Paper No. 2: 2010–11, Commonwealth of Australia, Canberra, 2010, pp. 191–93, viewed 17 May 2010, http://www.budget.gov.au/2010-11/content/bp2/download/bp2.pdf

[17]. Budget Paper No. 1: 2010–11, op. cit., pp. 1–9—1–10.

[18]. D Cronin, ‘No thrills, no spills’, Canberra Times, 12 May 2010; M Mannheim, ‘PS faces big job losses’, Canberra Times, 12 May 2010.

[19]. Budget Paper No. 1: 2010–11, op. cit., p. 6–50. General government sector agencies are those which ‘provide non-market public services and are funded mainly through taxes’: Budget Paper No. 1: 2010–11, op. cit., p. 9–32.

[20]. Budget Paper No. 1: 2010–11, op. cit., pp. 6–68—6–71.

[21]. Budget Paper No. 1: 2010–11, op. cit., pp. 6–68—6–71.

[22]. Budget Paper No. 2: 2010–11, op. cit., p. 283.

[23]. Australian Government, Portfolio Budget Statements 2010–11: Budget Related Paper No. 1.16: Prime Minister and Cabinet Portfolio, Commonwealth of Australia, Canberra, 2010, pp. 111–12, viewed 17 May 2010, http://www.dpmc.gov.au/accountability/budget/2010-11/pbs/pbs_2010-11.pdf

[24]. V Burgess, ‘APS reform body gets budget upgrade’, Australian Financial Review, 14 May 2010; L Dayton, ‘CSIRO braces for job cuts’, The Australian, 13 May 2010; P Dorling, ‘PM’s department to build on already dominant position’, Canberra Times, 13 May 2010; P Karvelas, ‘Public servants set to join the dole queue’, The Australian, 13 May 2010; ‘Centrelink jobs to go’, Daily Telegraph, 12 May 2010; S Bartos, ‘Changes are coming, but not in this budget’, Canberra Times, 12 May 2010; J Eyers, ‘Funding boost to stay ahead of the game’, Australian Financial Review, 12 May 2010; M Mannheim, ‘PS faces big job losses’, op. cit.; B Speedy, ‘Agencies to get more funds and employees’, The Australian, 12 May 2010.

[25]. M Mannheim, ‘PS faces big job losses’, op. cit.

[26]. S Fielding, Rudd hires more muscle in gangland budget: Fielding, media release, 11 May 2010, viewed 17 May 2010, http://www.stevefielding.com.au/images/press_room/SF660_110510_budget.pdf

[27]. Community and Public Sector Union (CPSU), ‘Budget 2010—swings and roundabouts for public sector workers’, CPSU website, viewed 17 May 2010, http://www.cpsu.org.au/campaigns/news/17739.html; P Karvelas, ‘Public servants set to join the dole queue’, op. cit.