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 1 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 3 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.