Budget Review 2021–22 Index
The National Drought and North Queensland Flood Response and
Recovery Agency has been renamed
as the National Recovery and Resilience Agency (NRRA), incorporating
activities transferred from agencies including the National Bushfire Response
Agency, the Department of the Prime Minister and Cabinet (PMC), the Department
of Home Affairs (HA), and the Department of Agriculture, Water and the
Environment (pp. 34, 35, 164). Separating
the Government’s response and recovery functions, Emergency Management
Australia (in the HA portfolio) will co-ordinate responses to national
emergencies, and the NRRA (PMC portfolio) will ‘lead resilience to and recovery
from hazards and disasters’ (p. 65). In addition, the Australian Climate
Service (ACS) will be established to ‘transform the Commonwealth’s capacity to
anticipate and prepare for more extreme weather events due to a changing
climate, and inform risk reduction and resilience investments’ (Budget
Paper No. 2, pp. 6–7, 65–66).
In contrast to pre-COVID budgets, this year’s Budget does
not include initiatives for the decentralisation of public service agencies.
When discussing public sector employees, budget papers use 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, which is the method of counting staff used by the Australian
Public Service Commission (APSC).
Prior to the pandemic
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 ASL of 167,596 (p. 166). Critics, notably the Opposition
and the main public
sector union, refer to this policy objective as the ASL cap or the staff
October 2020, the Government reported that ASL had been maintained at around
or below the 2006–07 level over the years prior to the COVID-19 pandemic, but
foreshadowed that ‘significant ASL increases will occur in a number of
portfolios in 2020–21 … However much of this additional ASL is temporary,
reflecting the nature of the response to COVID-19’ (p. 18).
Budget foreshadows that the 2021–22 ASL estimate will increase to 174,276 (5,364
above the updated estimate for 2020–21), and that ‘sustainment of some of this
additional ASL will continue to be required over much of the forward estimates’
(p. 14). The Budget papers also indicate that the size of the public
service workforce will continue to grow into the future (Budget
Paper No. 4, p. 14–15):
ASL increases in the short term reflect major efforts
to address an unusual convergence of health, economic and social challenges.
[I]t is expected that over the medium and longer term
there will be modest underlying ASL growth as Australia recovers its
equilibrium and gets back to normal rates of economic and population growth. [emphasis
list of policy objectives that necessitate ASL increases in a range of
portfolios in the short term includes:
- a New Employment Services Model to replace the jobactive
the COVID-19 vaccination program
the response to the Royal Commission into Aged Care Quality and
the Royal Commission into Defence and Veteran Suicide and related
reform of the mental health system
initiatives to reduce violence against women and children and
the ACS and the NRRA (pp. 13–14).
The main public
sector union welcomed the increase of 5,364 positions, but observed that
‘this restores less than half of the over 13,000 jobs that the Government have
cut since they took power’. The union also highlighted the size of the public
service’s labour hire workforce (which is not counted in ASL or in the APSC’s
Tonight, was a huge missed opportunity to offer certainty to
the 25,000 labour hire workers who serve the public via expensive and ineffective
labour hire contract arrangements. The Government should have dealt with this
problem by cutting out the expensive private companies and delivered better
services with more employees at the same cost.
In 2018 it was reported that, since the change of government
in 2013, spending
on contract labour hire and consultancies had doubled to
$730.0 million (more recent figures are not publicly available). Commentators
such as Helen Sullivan (Director, ANU Crawford School of Public Policy) and
Terry Moran (former secretary of the Department of Prime Minister and Cabinet) suggested
that this increase, along with the ASL cap, deskills
public service agencies. However, in
March 2018 the Government argued that ‘the overall cost of government
administration continues to fall as a proportion of overall government
Government has observed that ‘continued investment in digital capabilities
will support further ASL prioritisation in future years’ (p. 15). Two
significant budget measures are (p. 75):
$421.6 million over two years from 2021–22 (and $38.7 million
in capital funding) to continue the My Health Record system and funding
for the Australian Digital Health Agency, including for the Intergovernmental
Agreement on National Digital Health.
$200.1 million over two years from 2021–22 (including $54.0
million in capital funding) to develop and transition government services to a
new, enhanced myGov platform, providing a central place for Australians to find
information and services online.
A Beta trial of myGov commenced
in September 2020. The beta.my.gov.au
website enables the Digital Transformation Agency to ‘test new features and
ideas [with] more features and services … added over time’.
The Budget allocates $16.5
million over four years from 2021–22 and $0.2 million per year ongoing to ‘identify
Australian Government data assets and establish a searchable data catalogue’ (p.
74). It is not clear which agency is allocated this funding, or how this
measure relates to data.gov.au, the
‘central source of Australian open government data’. A webpage of the interim
National Data Commissioner explains the
difference between a data inventory, register, catalogue and repository.
Additional technology-related measures and projects are
listed in an
article by an ICT trade publication.
Former deputy secretary of the Department of Finance, Stephen
Bartos, has observed that many of the digital capability projects are
discussed in the context of the
Government’s deregulation agenda, which includes ongoing review to ensure
that settings are fit-for-purpose, and ‘removing regulation if it ceases to be
necessary, and streamlining and harmonising regulations across jurisdictions’ (p.
6). However, Bartos
also observes that ‘rather than less regulation, the agenda is mainly about
reducing the burden of regulation by making it more digital. The implication
for public servants is that they can continue to regulate, provided they do it
Whole-of-government shared enterprise resource planning
As outlined in a
February 2020 AusTender notice, a whole-of-government shared enterprise resource
planning solution (GovERP)
is part of the Government’s Shared Services Program, which aims to:
… consolidate, standardise and automate the delivery of core
transactional corporate services across non-corporate Commonwealth entities … The
Department of 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.
Budget identified $35.6 million for the Department of Finance for
GovERP (p. 85). The 2021–22 Budget aims to progress the GovERP
project by providing unspecified funding (due to commercial sensitivities) to
Finance and Services Australia (over two years from 2021–22) and the ATO and
the Department of Industry, Science, Energy and Resources (in 2021–22 only). Finance’s
Service Delivery Office and its 14 client agencies will comprise the first
phase of implementation (Budget
Paper No. 2, pp. 76–77).
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 in 2018–19, the Auditor-General
noted that ‘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’ (p. 49). 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’ (p. 45).
Cybersecurity, and fraud prevention
2013, a series of reports by the Auditor-General have identified inadequacies
in agencies’ implementation of cybersecurity risk mitigation strategies. In
August 2020, Australia’s
cyber security strategy 2020 foreshadowed ‘secure hubs’ for government
agencies, to ‘reduce opportunities for malicious actors to target smaller
agencies with less secure IT’ (p. 40). The
Budget commits $18.8 million in 2021–22 to ‘pilot centralised delivery of
cyber capabilities and services for government agencies through
Whole-of-Government cyber hubs with costs to be partially met from within the
existing resources of the Department of Defence, the Australian Signals
Directorate and Services Australia’ (p. 76).
Budget commits $13.2 million over four years from 2021–22 for the
Attorney-General’s Department and the Australian Institute of Criminology to
‘continue the operation of the Commonwealth Fraud Prevention Centre in
developing a coordinated whole-of-government approach to addressing fraud
vulnerabilities in Commonwealth programs’ (p. 64).
Since 1987–88 the Australian Government has applied an Efficiency
Dividend (ED) to ‘departmental’ (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
has varied to some degree over the years, but has been most frequently applied
at a rate of either 1.00 or 1.25%. Over time, various agencies have been fully
or partially exempted from the base and/or one-off rates.
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 the Government in the course of developing the
Budget. The ED is not discussed in the 2021–22 budget papers, nor was it
mentioned in the 2020–21 budget papers.
The most recent coverage of the ED was in the Mid-Year
Economic and Fiscal Outlook 2019–20 (MYEFO) of December 2019, which
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 2019–20 MYEFO also noted ED exemptions for several
specific agencies, national collecting institutions, and agencies with an ASL
of less than 200.