Philip Hamilton
From within existing resources of the Department of the
Prime Minister and Cabinet, $9.8 million from 2017–18 over two years has
been committed to an independent review of the Australian Public Service.[1]
Due to report in 2019, the review will ‘examine the capability, culture and
operating model of the APS, to ensure it is equipped to engage with the key
policy, service delivery and regulatory issues of the day [including]
attract[ing] and retain[ing] people with the appropriate skills and
capabilities to fulfil its functions’.[2]
Efficiency dividend
Since 1987–88, the efficiency dividend (ED) has been an
annual funding reduction for Australian government agencies, in general applied
only to ‘departmental’ expenses.[3] The ED has usually been applied at a rate of either 1 or 1.25
per cent; in some years governments have increased the rate, with the highest ED
rate being 4 per cent in 2012–13.
In the 2018–19 Budget the ED is mentioned only once, to note
that ‘the Australian Broadcasting Corporation (ABC) will continue to be exempt
from the government wide efficiency dividend’.[4] The Budget does not specify
the rate at which the ED will be applied in 2018–19[5]—however,
the 2016–17 Budget stated that the ED would be maintained at 2.5 per cent
through 2016–17 and 2017–18, before being reduced to 2 per cent in 2018–19 and
1.5 per cent in 2019–20.[6]
Efficiencies and savings: Home
Affairs Portfolio
With funding of $7.0 million in 2018–19, the Department
of Home Affairs will undertake a strategic review of the new Home Affairs Portfolio
to ‘identify opportunities for integrating capabilities, reducing duplication
and maximising efficiencies from the creation of the new portfolio’. Completion
‘in advance of the 2019–20 Budget’ suggests that savings recommendations are
possible. It is not clear whether such savings would form part of, or would add
to, intended ‘efficiencies of $256.3 million over five years from 2017–18
through the creation of the Home Affairs portfolio [by] reducing areas of
duplication ... and achieving economies of scale through coordinated procurement
and service delivery functions’.
However, one year after the merger of the Australian
Customs and Border Protection Service and the
Department of Immigration and Border Protection, it was reported that
‘departmental’ expenses were more than $350 million over budget.[7]
The Australian National Audit Office is due to table a performance
audit of the merger later this month.[8]
Property and decentralisation
In relation to the divestment of surplus properties, the
Budget reports that ‘as at April 2018, over 115 properties were sold or were
under offer, with returns to the Budget in excess of $173 million (excluding
GST)’. In the context of leased office space, ‘Operation Tetris’ is the
informal name of a 2015 Government policy which directs public sector agencies to
fill vacant, leased office space rather than entering into new leases or
renewing expiring leases.[9] The Budget reports that ‘Tetris
remains on track to realise efficiencies of nearly $300 million over ten years.’
It was reported that ‘nearly 26,000 desks sat empty in 2017’, to which the
Government responded that actual staff reductions and movements may move more
quickly than ‘lead times involved in downsizing leased area commitments’.[10]
The Government has committed ‘$341.5 million over nine
years from 2018–19 to fund capital works by the Commonwealth Science [sic] and
Industrial Research Organisation (CSIRO) across its properties’. The cost will
be met from the planned disposal of part of CSIRO’s property portfolio ($245.1 million
over nine years from 2018–19) and from within CSIRO’s existing resources.
In relation to the Government’s decentralisation agenda, without
providing costings or (in most cases) staff numbers, the following moves to ‘locations
outside of Canberra, central Sydney and Melbourne’ are foreshadowed in the
2018–19 Budget: Office of the National Rural Health Commissioner (to Adelaide);
Unique Student Identifier Register (to Adelaide); Office of the Registrar of
Indigenous Corporations (to Darwin); the Department of the
Prime Minister and Cabinet’s Indigenous Affairs Group Regional Network (to Shepparton
and Parramatta); the Department of Infrastructure, Regional Development and
Cities’ Indian Ocean Territories Administration Office (three staff positions, reportedly
to Perth) and Inland Rail Unit (nine staff positions, reportedly
to Toowoomba, Dubbo, and Wodonga); and the
Department of Human Services (an unknown number of staff from Sydney CBD to Parramatta).[11]
Administrative arrangements—new
entities
A new Australian Centre to Counter Child Exploitation, comprising
the Australian Federal Police leading Home Affairs Portfolio agencies, will be
established with funding of $68.6 million over four years from 2018–19. The
Government will also establish a National Data Commissioner in relation to new
data sharing and release arrangements.[12]
The Budget allocates $26.0 million over four years from
2018–19 to establish a National Space Agency. A new Aged Care Quality and
Safety Commission will be established from 1 January 2019 with $253.8 million
in funding over four years from 2018–19. A governance board for the Australian Pesticides
and Veterinary Medicine Authority (APVMA) will be established from
1 July 2018 to ‘set the APVMA’s strategic direction, drive
operational performance, set an appropriate risk appetite and ensure greater
accountability. The costs of the Board will be recovered through revisions to the
APVMA’s existing levy arrangements’.
Enterprise agreements
The salaries of the majority of public servants are
determined in agency enterprise agreements. In general, agreements made in 2011
had a nominal expiry date of 30 June 2014. Negotiations for new agreements have
been protracted, but the Australian Public Service Commission has reported that,
as at 15 February 2018, a total of 138 enterprise agreements had been
agreed to in 125 agencies.[13]
However, some enterprise agreement processes are still
outstanding. Staff at the Bureau of Meteorology have rejected enterprise
agreement proposals in three votes, and union members have taken strike action.[14]
Fair Work Commission hearings on negotiations at the Department of Home Affairs
concluded in April 2018. It has been reported that ‘a key sticking point
in the case has been the different terms and conditions that apply to workers
from the former Customs department, before it merged with Immigration and
became Australian Border Force in 2015’.[15]
Staffing
In the 2015–16 Budget, the Government undertook to maintain
the size of the General Government Sector (GGS), excluding military and
reserves, at around or below the 2006–07 Average Staffing Level (ASL) of
167,596.[16] The projected GGS ASL for 2018–19 of 167,484 is 15,441 less than
the peak of 182,505 ASL in 2011–12, and 912 higher than the GGS ASL for 2017–18
(166,572).
Agencies with a net loss of ASL in the 2018–19 Budget
include: the Department of Human Services
(-1,280); the Australian Bureau of Statistics (-169, partly due to the cyclical
nature of the Census); and the Attorney-General’s Department (-360, mainly due
to functions being transferred out of the department).
Agencies set to gain ASL include the Department of Home
Affairs (+470), and a number of agencies with national security, law enforcement
or policing roles such as the Australian Security and Intelligence Organisation
(+121); the Australian Federal Police (+148); the Australian Criminal
Intelligence Commission (+75); and AUSTRAC (+27).
The Department of Defence’s
APS (civilian) workforce is set to be reduced by 1,127 ASL, but it is not clear
how many of these will be attributed to the Australian Signals Directorate
(ASD), which will become a statutory agency on 1 July 2018. In the Budget
papers, no staff are specified for the ASD.[17]
With ASL having been capped at
around the 2006–07 level for several years, the
Budget reports a declining trend in ASL as a proportion of the Australian
population. However, following evidence to an inquiry by the Joint Committee of Public Accounts and
Audit into contract reporting,[18] it has been reported that ‘Government
agencies have more than doubled their spending on contracted labour in the last
five years’,[19] and:
Since the change of government in 2013, annual
expenditure on labour contractors for 18 of the largest workplaces has
ballooned from $318 million to more than $730 million.[20]
The Government is reported to have ‘rejected
calls for a mandated cap on external workforce spending and consultancy
contracts ... describing the falling cost of administration as a proportion of
overall expenditure as the only relevant indicator of public service efficiency’.[21]
Commentators have stated that ‘using contractors for non-specialist work that
could be done by public servants would not get value for money’ and that ‘you’re
also not growing the capacity of your organisation because all of those skills
grow outside the agency’.[22]
[1].
The budget figures in this brief have been taken from the following
documents unless otherwise sourced: Australian Government, Budget
measures: budget paper no. 2: 2018–19, pp. 69, 79, 118, 127-8, 130,
133, 153, 166–7, 169, 186 and 205; and Australian Government, Agency
resourcing: budget paper no. 4: 2018–19, pp. 4, 10, 14, 16, 17 and 177–186.
[2].
M Turnbull (Prime Minister), Review
of the Australian Public Service, media release, 4 May 2018. For
commentary, see: S Easton, ‘APS
under review: David Thodey asked to pick up where Nugget Coombs left off’, The
Mandarin, 4 May 2018; V Burgess, ‘The
new APS review isn’t everything that former mandarins were calling for’, The
Mandarin, 7 May 2018; and D Donaldson, APS
review a neoliberal stitch-up, says CPSU’, The Mandarin, 7 May 2018.
[3].
Departmental funds are generally intended to cover agency running
costs such as salaries and the purchase or lease of equipment and property. In
contrast, administered funds are those administered by a Commonwealth entity on
behalf of the Government. They usually relate to activities governed by
eligibility rules and conditions established by the Government or
Parliament—such as grants, subsidies and benefit payments.
[4].
However, the Government will pause indexation of the ABC’s operational
funding to achieve savings of $83.7 million over three years from 2019–20
to 2021–22.
[5].
The ED is not always explicitly stated in the Budget because, rather
than being a budget measure, the ED is a factor determined and applied by
government in the course of developing the Budget (along with other factors
such as cost indices and policy decisions). Department of Finance and
Deregulation (DoFD), Report of
the review of the measures of agency efficiencies, DoFD, Canberra, March 2011,
pp. 21–22.
[6].
Australian Government, Agency resourcing:
budget paper no. 4: 2016–17, p. 2.
[7].
B Keane, ‘Immigration-Customs
merger a shocker as budget blows out’, Crikey, 13 October 2016.
[8].
Australian National Audit Office (ANAO), ‘The
integration of the Department of Immigration and Border Protection and the
Australian Customs and Border Protection Service’, ANAO website.
[9].
V Burgess, ‘Tetris
fills the gaps’, The Australian Financial Review, 4 June 2015, p.
16.
[10].
D Dingwall, ‘More empty desks despite moves to cut office space’, The Canberra Times, 4 May 2018, p. 3.
[11].
M McCormack (Minister for Infrastructure and Transport) and J McVeigh (
Minister for Regional Development, Territories and Local Government), Regional
Australia – a stronger economy delivering stronger regions 2018–19, pp.
146–7; and S Easton, ‘Federal
Budget 2018: is the APS decentralisation agenda running out of puff?’,
The Mandarin, 9 May 2018.
[12].
For more information, see: N Horne and P Hamilton, ‘Data
sharing and release’ and P Hamilton, ‘Selected public sector ICT initiatives’, Budget review
2018–19, Research paper series, 2017–18, Parliamentary Library, Canberra,
2018.
[13].
APSC, ‘Agreements
made under the 2014 and 2015 bargaining policies’, APSC website.
[14].
D Dingwall, ‘Stormy
weather possible for bureau as union targets its forecasts’, The Canberra
Times, 1 May 2018, p. 6.
[15].
S Whyte, ‘Home
Affairs tells Fair Work to ignore union bid’, The Canberra Times, 18
April 2018, p. 7.
[16].
The General Government Sector (GGS) comprises government departments and
agencies that provide non-market public services, or involve the transfer or
redistribution of income, and are funded mainly through taxes. Australian
Government, Budget
strategy and outlook: Budget paper no. 1: 2018–19, p. 10-40. Average
Staffing Level (ASL) is a method of counting that adjusts for casual and
part-time staff in order to show the average number of full-time equivalent
employees. ASL is almost always a lower figure than a headcount of actual
employees. In this discussion of ASL, GGS figures exclude military and
reserves.
[17].
M Mannheim, ‘The good news, Canberra, is there isn’t much bad news’, The Canberra Times, 9 May 2018, p. 2.
[18].
Joint Committee of Public Accounts and Audit, ‘Australian Government Contract Reporting - Inquiry based on
Auditor-General's report No. 19 (2017-18)’, Inquiry homepage,
Australian Parliament website.
[19].
D Dingwall and M Mannheim, ‘Contractor
spending doubles in five years’, The Canberra Times, 14 March 2018, p. 1.
[20].
Ibid.
[21].
T McIlroy and E Tadros, ‘Cormann defends consultants’, The
Australian Financial Review, 19 March 2018, p. 8. The Budget includes
a graph that shows declining trends in both: ASL
as a proportion of the Australian population; and ‘departmental’
expenditure as a percentage of total Government. Agency
resourcing: budget paper no. 4: 2018–19, p. 4.
[22].
D Dingwall and M Mannheim, ‘Contractor
spending doubles in five years’, op. cit., p. 6.
All online articles accessed May 2018.
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