Budget Review 2020–21 Index
Staffing, contractors and consultancies
prior to the COVID-19 pandemic
When discussing public sector employees, the budget papers
use the average staffing level (ASL), 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 (the Australian
Public Service Commission uses the headcount method).
In the 2015–16 Budget, the Government undertook to maintain
the size of the general government sector (GGS), excluding military and reserves,
or below the 2006–07 ASL of 167,596. Agency
Resourcing: Budget paper No. 4: 2020–21 indicates that this
objective has been achieved over the years prior to the COVID-19 pandemic.
Critics, notably the Opposition
and the main public
sector union, refer to this policy objective as the ASL cap or the staff
cap, and express concern that the APS is ‘being tasked with delivering more
government initiatives with fewer people’. In 2018 it was reported that, since
the change of Government in 2013, spending
on contract labour hire and consultancies doubled to $730.0 million,
with commentators suggesting that this increase, along with the ASL cap, deskills
public service agencies. However, the
Government has argued that ‘the overall cost of government administration
continues to fall as a proportion of overall government expenditure’. The
management of consultancies is the subject of a Budget measure discussed below.
to Budget Paper No. 4 provides a useful overview of the Government’s
perspective on its approach to government administration, including staffing,
Impact of the
to Budget Paper No. 4 outlines staffing changes that formed
part of the Government’s response to the COVID-19 pandemic, including the
redeployment of over 2,000 employees within the public service to ‘support the
delivery of critical services’, and the expectation that in 2020–21 ASL will
temporarily increase beyond 2006–07 levels. The Preface also notes that
‘ongoing natural attrition, combined with temporary delays to recruitment in
late 2019–20, have resulted in ASL across the General Government Sector being
below the level expected at the 2019–20 Budget’.
In the context of these developments, the staffing
chapter in Budget Paper No. 4 does not provide the usual comparative
information about the ASL for each agency, presenting only ASL estimates for
2020–21, and noting: ‘ASL outcomes for 2019–20 are published by agencies in
their Portfolio Budget Statements and data will also be published later this
month in Annual Reports’.
Management Advisory Services panel
performance audit published in December 2017, the Auditor-General found ‘a
substantial difference in the value of contracts identified in AusTender using
the ‘consultancy’ flag and the total value of contracts for the identified
suppliers and categories ... This may suggest entities have underreported
consultancy contracts’. These and related issues were examined in Senate
Estimates hearings and by an
inquiry of the Joint Committee of Public Accounts and Audit (the inquiry
lapsed without issuing a report when Parliament was dissolved in April 2019).
With the aim of ‘improv[ing] the quality, consistency and
efficiency of services’, the
Budget provides $4.5 million over four years for the Department of
Finance (Finance) to establish ‘a new Whole of Australian Government Management
Advisory Services consultancy panel’.
August 2020 AusTender notice indicated that there will be three categories
of service covered by the panel (financial, corporate, and commercial
management) and that it ‘will not include labour hire (contractor) services’. An
Australian Financial Review article stated:
Key to the increased transparency will be creating a
centralised whole-of-government procurement panel for consultancy services to
leverage the government’s combined buying power and ensure best value from
The new reporting requirements will begin by July 2021,
starting with spending on financial management advisory services.
Smaller firms are concerned that consolidating the process ... will
further entrench the dominance of the large firms ...
Government agencies will also have to standardise the way
they report on their spending on consultants and contractors in their annual
expects that ‘the cost of this measure will be met by an entity administration
fee offset by efficiencies generated through the new arrangement’. This is
presumably a description of arrangements subsequent to the Panel’s establishment,
for which $4.5 million has been allocated.
Whole-of-government and cross-portfolio resource management
Whole-of-government shared enterprise resource planning
The Budget provides $35.6 million
in 2020–21 for Finance to further develop the model for a whole-of-government
shared enterprise resource planning solution (GovERP), a project already
in development. As outlined in a
February 2020 AusTender notice, the Government’s Shared Services Program
... consolidate, standardise and automate the delivery of core
transactional corporate services across non-corporate Commonwealth entities ...
Finance is working with the Shared Services Provider Hubs to co-design a new
GovERP initiative [that] comprises the design, development and trial of a
common whole-of-government platform, which will deliver a range of standardised
corporate and financial services.
Although the concept of shared services suggests that
savings and efficiencies are likely to be available, in an audit
that examined the delivery of HR services by hubs, the Auditor-General noted:
‘in the absence of available benchmarking data, it is difficult for entities to
determine what efficiencies have been gained from engaging in shared services
arrangements’. The Auditor-General noted that Finance had observed ‘a lack of
consistent data on the cost and quality of current corporate activities, and
variation in costing methodologies’ and that Finance is ‘working with agencies
to improve the benchmarking exercise and accuracy of data’.
Other information and communication technology (ICT) related
Budget measures have been collated in an
article by an ICT trade publication. The Preface
to Budget Paper No. 4 discusses the use of ICT in the delivery of
services, particularly in the context of the Government’s response to the COVID-19
Monitoring of government spending and use of commercial financing
and private sector capital
The Budget provides $29.6 million
over four years for Finance to ‘strengthen the capacity of Finance to
assess the efficiency and quality of government spending, by implementing
better real-time monitoring of expenditure and enhancing the scrutiny of new
and existing programs that respond to critical priorities’ and ‘facilitate more
widespread use of commercial financing and procurement models to secure private
The first measure is consistent with Outcome 1 of Finance’s Portfolio
Budget Statement (PBS), but no details are provided about how the
additional funding will improve Finance’s performance of this business-as-usual
function. No details are provided about the purpose of the proposed
arrangements in the second measure, or how they would operate within (or depart
from) the current resource
The Budget provides ‘$4.6 million
over four years (and $1.3 million per year ongoing)’ to develop and
implement procurement policies associated with the Payment
Times Reporting Bill 2020 (passed on 6 October 2020). As outlined by
Memorandum, the Bill ‘establishes a payment times reporting requirement for
eligible entities’, including ‘Commonwealth government corporate entities who
meet the income threshold’ to ‘provide bi-annual reports on their small
business payment terms and practices’ for publication on a central public
Business Plan (part of the broader JobMaker Plan) includes ‘$3.6 million
over two years from 2020–21 to facilitate the adoption of e-invoicing
across all levels of Government, and to consult on options for mandatory
e-invoicing across all levels of Government and by business’.
Parliament-related funding measures
Parliamentary departments: increased
of the Senate will be provided with $2.2 million in 2020–21 to
‘support increased Parliamentary committee activity’. The Department
of Parliamentary Services will be provided with $117.8 million over
four years to ‘support its operations, further improve security, enhance video
conferencing capabilities and maintain service levels while COVID-19 health
restrictions and precautions impact external revenue’. This includes capital
funding of $10.8 million.
National Audit Office (ANAO): decreased funding
In September 2020 the Auditor-General, Grant Hehir, wrote in
report 2019–20 that in that year, ‘42 performance audit reports were
tabled against a target of 48’ and:
... Without supplementary appropriations, the number of
performance audits tabled in the Parliament will continue to reduce. On this
basis, I have written to the Prime Minister to propose that the ANAO’s funding
is put on a more sustainable basis ...
Guardian reported that ‘the ANAO now expects to deliver 40 audits
in 2021–22, declining to 38 by 2023–24’. The
Guardian also reported that ‘the Coalition-controlled joint committee
of public accounts and audit [JCPAA] has written to the prime minister backing
the auditor general’s call for more funding to deliver 48 performance
audits a year’.
Portfolio Budget Statements show that resourcing for the ANAO has reduced by
$14.0 million from 2019–20 (from $112.0 million in 2019–20 to $98.0 million
in 2020–21). However the
Treasurer stated that the ANAO’s departmental appropriation has declined by
only $600,000 ‘taking into account the unspent money from previous allocations
...’ and that average staffing levels are broadly unchanged. The
Guardian has attributed the funding reduction to ‘ongoing deficits [at
the ANAO] and the Coalition’s efficiency dividend’.
Responding to a question without notice in Parliament the
day after the Budget, Prime
Minister Morrison stated that ‘when the government receives the outcomes of
[the current] 10-year review, we will consider the resourcing for the ANAO’. By
convention, in every third Parliament the JCPAA reviews the Auditor-General Act 1997
in accordance with section 8 of the Public Accounts and
Audit Act 1951. The
last review was tabled ten years ago (December 2010). The
scope of the current review, announced
in late September 2020, includes ‘resourcing arrangements’.
Since 1987–88 the Australian Government has applied an Efficiency
Dividend (ED) to ‘departmental’ (that is operating) expenses of Australian
Government agencies, reducing funding to account for increased public sector
productivity over time. The ED reduces the base departmental funding of
agencies by the ED rate prior to the addition of any new measures. The ED rate 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. The ED is not
discussed in the 2020–21 Budget papers, and was not covered in the July 2020 Economic and
The ED rate has varied to some degree over the years, but
has been most frequently applied at a rate of either 1.00 or 1.25 per cent.
Over time various agencies have been fully or partially exempted from the base
and/or one-off rates.
The most recent coverage of the ED was in the Mid-Year
Economic and Fiscal Outlook 2019–20 (MYEFO) of December 2019, which
noted: ‘the Government will achieve savings of $1.5 billion over four years
by maintaining the Efficiency Dividend (ED) at the 2018–19 level of 2.0 per cent
for two additional years (2019–20 and 2020–21), stepping down to 1.5 per cent
in 2021–22 and returning to the base rate of 1.0 per cent from 1 July
2022’. The MYEFO also noted ED exemptions for several specific agencies,
national collecting institutions, and agencies with an ASL of less than 200.
All online articles accessed October 2020
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