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Deirdre McKeown and Cathy Madden
Politics and Public Administration Section
During the 2007 federal election campaign the Australian Labor Party
announced, as part of its savings strategy, that it would impose a one-off
two per cent efficiency dividend on most government agencies. This would
be in addition to the existing 1.25 per cent efficiency dividend resulting
in an efficiency dividend of 3.25 per cent for the 2008–09 financial year.[1]
The then Shadow Minister for Finance, Lindsay Tanner, also announced
that the base for the efficiency dividend would exclude the operational
areas of the Department of Defence and ‘agencies specifically affected
by other Labor savings proposals’. Mr Tanner noted that ‘current vacancy
rates, turnover, and attrition will ensure that redundancies will not
be necessary to achieve these efficiency savings’.[2]
During the preparation of the 2008 Budget, statements by the Government
on the need to find budget savings led commentators to predict that large
spending cuts would be made which could have an impact on government programs.[3]
There was also speculation that the budgets of a number of small cultural
institutions, such as the National Library of Australia, the National
Gallery of Australia and the National Museum of Australia, would be severely
affected by the additional efficiency dividend.[4]
The predicted size of the budget cuts and the possible loss of talent
from the Australian Public Service (APS) were compared by some with the
severity of public sector cuts introduced in the early Coalition Government
budgets.[5] The first Coalition
Government Budget forecast that the average staffing level (ASL) would
decline by 1737 in 1996–97 and that:
… it is expected that the total number of people employed
(full–time and part–time and temporary staff) under the Public Service
Act will decline by some 10,500 between 30 June 1996 and 30 June 1997.[6]
Australian Public Service Commission (APSC) figures show that during
1996–97 the separation of permanent APS staff totalled 15 471—the
two major types of separation being resignations (4135) and retrenchments
(10 070).[7]
The Budget forecasts that the application of the additional one-off two
per cent efficiency dividend to the departmental funding of most Government
agencies will generate savings of $1.8 billion over five years.[8] The effect of these savings on
individual departments and agencies is considered in other sections of
this Budget Brief.
Budget estimates of average staffing levels[9] of agencies in the Australian Government general
government sector show a total reduction of 1224 staff across Australia.[10] There is speculation that approximately one third (or 400) of
these staff are based in Canberra.[11]
The total ASL for all general government sector agencies for 2008–09
is 246 993 compared with 248 217 for 2007–08.[12]
The following is a select list of ASL changes forecast for departments
and agencies. It should be noted that departments and agencies determine
their own staffing levels subject to resourcing requirements. At the time
of writing, departments and agencies are still considering how to implement
the efficiency dividend.[13]
The following figures should be read in the context of the total ASL for
departments and agencies.[14]
Reductions in ASL in departments and agencies
2008–09
- Department of Defence (civilian 474)
- Defence Materiel Organisation (210)
- Department of Veterans’ Affairs (195)
- Australian War Memorial (8)
- Department of Education, Employment and Workplace Relations (213)
- Department of Families, Housing, Community Services and Indigenous
Affairs (269)
- Department of Health and Ageing (179)
- Department of Human Services including the Child Support Agency (445)
- Centrelink (200)
- Medicare Australia (171)
- Department of Immigration and Citizenship (221)
- Department of Innovation, Industry, Science and Research (142)
- Commonwealth Scientific and Industrial Research Organisation (85)
- Department of Infrastructure, Transport, Regional Development and
Local Government (50)
- Department of the Treasury: Australian Taxation Office (1137)
- Australian Bureau of Statistics (166)
Increases in ASL in departments and agencies
2008–09
- Attorney-General’s Department (50)
- Australian Security Intelligence Organisation (186)
- Australian Customs Service (146)
- Department of Agriculture, Fisheries and Forestry (70)
- Department of Defence: military (1591) and reserves (385)
- Department of the Prime Minister: Department of Climate Change (140)[15]
- Department of the Treasury: Australian Competition and Consumer Commission
(89)
Budget reaction
Argument has centred on whether the total number of APS staff cuts of
1224 is misleading. The Australian Financial Review comments that:
The civilian job cuts spread across portfolio departments
and key agencies amount to more than 4100, offset by gains in some departments
and agencies.[16]
Senator Gary Humphries (Lib, ACT) suggests that the loss of public service
jobs is higher than the Budget forecast:
Overall, the Government has cut more than 3,000 public
service jobs, yet by adding some extra uniformed personnel to Defence,
they have been able to pretend the net loss is only 1,224. This is obviously
false, because project managers, communications officers and HR people
can't just put down their pens and take up heavy artillery. These new
Defence jobs are not ones that can be filled by retrenched public servants,
they will have to be filled from outside the service. Therefore the
overall number of jobs to be lost is far higher than the Government
would have us believe.[17]
The Community and Public Sector Union suggests that ‘3200 non-defence
Australian public service positions will be lost’. The CPSU also criticises
the application of the efficiency dividend across all public sector agencies:
Some savings can be found, but the blunt, one-size-fits
all ‘efficiency dividend’ is not useful in building a dynamic, creative
public service needed to deliver for Australia’s long term challenges.[18]
Senator Humphries has also attacked the imposition of the 3.25 per cent
efficiency dividend:
There is also the imposition of the two per cent efficiency
dividend on government agencies. It is worth remembering that Labor,
when in opposition, said that the efficiency dividend of 1¼ per cent
was lazy budgeting, it was badly targeted, and it did not give people
the chance to distinguish good programs from poorly run programs. Labor
have now upped it to 3¼ per cent. How does that work out?[19]
The ACT Chief Minister, Jon Stanhope, supports the Budget ASL estimates
and suggests that the Budget cuts have not hit the ACT as hard as had
been expected. He said:
We've come out of it far better than we were lead
to believe we would. I don't believe the stringencies here in the ACT
are nearly as tough as some of the rhetoric we faced in the lead up
to the delivery of this budget, so discussions of meat axes and massive
job losses simply haven't come to pass.[20]
Mr Stanhope anticipates that the ACT Public Service will absorb many
of the APS redundancies.
On 28 March the Special Minister of State, Senator Faulkner, announced
the establishment of a Career Transition and Support Centre (CTSC) to
assist agencies manage staff reductions. The Minister stated that the
government wanted to ensure that excess staff are provided with opportunities
to stay in the Public Service, enable the Public Service to retain experienced
and qualified staff and redeploy them to areas of need and minimise the
requirement for compulsory retrenchment.[21]
The Government has provided $2.5 million over two years to the Australian
Public Service Commission (APSC) to establish and operate the CSTC. The
funding includes $0.1 million in capital funding. The Centre acts as both
a referral and a recruitment agency. It is to operate on a partial cost-recovery
basis, with agencies paying a standard referral fee of $2200 for each
employee. The APSC estimates that there will be 350 cases in 2008–09.[22]
The CSTC will work with agencies to provide advice on implementing the
Redeployment Principles, which are aimed at ensuring a consistent whole-of-government
approach to managing excess staff across the Public Service.[23]
By the establishment of the CTSC the Government aims to reduce the adverse
effects of the Budget measures and show its commitment to the retention
of skills and experience in the APS.[24]
The Government’s approach to managing staff reductions and redeployment
has been welcomed by the Community and Public Sector Union.[25]
The Career and Support Centre commenced operations on 1 May 2008.
In line with its election commitment, the Rudd Government has reduced
the number of ministerial and opposition personal staff by 30 per cent.[26]
This move will result in savings of $126.3 million over five years. [27] The number of ministerial staff
had increased from 294 in May 1996 to 445 in 2006. The reduction in staff
will result in a return to 1996 staffing levels.
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