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The main public service union has warned its members to brace for redundancies as the Rudd government moves to cull 800 senior public servants.
Carbon tax 'terminated'
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Carbon tax 'terminated'
PM Kevin Rudd has brought forward the move to a floating carbon price as he prepares for this election.
Community and Public Sector Union National Secretary Nadine Flood said the government was unlikely to achieve its “preference” of managing the cuts to senior public service ranks through natural attrition.
“We’re disappointed to see 400 executive jobs cut, on top of the 400 already announced in the May Budget,” Ms Flood said on Tuesday.
“We expect some redundancies, along with natural attrition.”
The union official warned the government that the bureaucracy was not a “magic pudding’” that would provide an endless source of savings.
“Over the past few years the public service has endured a range of cuts and savings measures but demand for government services keeps going up,” Ms Flood said.
“The public service is not a magic pudding and Government cannot keep making cuts without affecting services.”
Canberra will bear the brunt of 800 job cuts to the public service’s executive and senior executive ranks as the Rudd Government moves to pay for scrapping its carbon tax.
Treasurer Chris Bowen said the “preference” was to cull the senior public servants through natural attrition but did not rule out forced redundancies.
More than 60 per cent of the service’s executive level workers are Canberra-based and more than 75 per cent of the elite senior executives work in the capital.
The savings come on top of $148 million announced in May’s Federal Budget and will be achieved over four years through staffing cuts and greater efficiencies in IT procurement.
A 1 per cent cut to the cost of the bureaucracy’s senior ranks is thought to equate to about 800 jobs but departments are being told they are free to choose how they achieve the savings.
Former Public Service Commissioner Andrew Podger said there was a good case for addressing the “classification creep” which has seen the huge growth in executives and senior executives in the service.
But the Professor of Public Policy at ANU said the successive rounds of cuts could not be made without reductions to service levels.
“My main concern is that this is in addition to everything else, it’s in addition to the cuts in the budget, in addition to the continued efficiency dividend and the fact that agencies have not been fully indexed for pay increases,” Professor Podger said.
“So you add that all up and you cannot have those cuts without also affecting the level of services to the public.
The former departmental head called on both sides of politics to take responsibility for declining service levels.
“Reducing services to the public is not necessarily a bad thing to do when you need to prioritise but my main concern is that the government, and indeed the opposition when it proposes cuts, should stand up and say ‘we are going to reduce services’ and take responsibility for it.”
Mr Bowen said in Townsville that he was looking to save $248 million over the forward estimates period with deep cuts to the bureaucracy’s senior ranks with the cuts “exclusively” at executive level and above.
“These changes will be exclusively in the executive and senior executive ranks of the public service,” Mr Bowen said.
“There are approximately 44,500 positions in those ranks and that will reduce in time by about 800 positions.
“These positions have grown by about 29 per cent over a period when the general public service has grown by about 6 per cent and all the calculation and all indications would indicate that this would be an appropriately and measured and balanced step over time.
Asked if most of the job losses would be in Canberra the minister replied: “You would expect them to be, yes.”
“Obviously the preference is for natural attrition over time,” Mr Bowen said.
ACT Chief Minister Katy Gallagher described the announcement as disappointing, saying the cuts would be felt across the wider Canberra community.
“The federal public service is critical to the lives of every Australian, our shared direction as a nation, and plans to outsource, move and cut jobs will ultimately lead to less services for communities across Australia.” Ms Gallagher said.
“We understand the need for the federal government to make decisions regarding their budget position, but Canberra based public service jobs should not be viewed by either party as an easy target to make savings.”
The saving is to plug a multi-billion dollar hole in the budget coming from the scrapping of the fixed carbon price, and moving to an emissions trading scheme.
Earlier, Member for Fraser Andrew Leigh said the measures would aim to reduce the growth of senior levels in the public service by approximately 1 per cent.
The Labor MP said although the government was looking at a slight reduction in EL and SES numbers, the senior levels had increased more rapidly than lower levels over recent years.
“That’s a level of the public service that has increased by 29 per cent since 2007 while the rest of the public service has increased by 6 per cent,” he said.
“The government will mandate that agencies find the savings at that senior level, but it will give them flexibility in how they do. If they want to do it with slightly lower pay increases rather than staff reductions, then they’re able to do that.”
Mr Leigh was speaking before the Prime Minister revealed the full details of his planned cuts.
Speaking on ABC Radio on Tuesday, Mr Leigh said the government hoped that managers would “make better use” of staff in lower levels as a result.
“It’s encouraging the public service to grow its own managers rather than bring people in from the outside,” he said.
Kevin Rudd has announced nearly $4 billion worth of cuts or deferrals to government spending to pay for his promise to bring forward by one year the move from a carbon tax to an emissions trading scheme.
The Prime Minister's decision to move from a carbon tax to an ETS on July 1, 2014 will cost the budget about $3.8 billion over the next four years, the government says.
''The government has decided to terminate the carbon tax, to help cost of living pressures for families and to reduce costs for small business,'' Mr Rudd said in a Townsville press conference on Tuesday morning.
Treasury modelling shows that in the 2014-15 financial year an average family will be $380 a year better off due to the decision to move sooner from a carbon tax to an ETS, Mr Rudd said.
The Prime Minister has promised his decision will be "budget neutral" – meaning his cabinet has been searching over the past weeks for spending cuts to fill the $3.8 billion gap.
Mr Rudd detailed those cuts on Tuesday morning.
- Tightening the car fringe benefits tax with savings of $1.8 billion over the forward estimates;
- Ending the Energy Security Fund two years early with savings of $770 million over the forward estimates;
- Trimming the Coal Sector Jobs package allocation in 2014/15 ($186 million in savings);
- A deferral of $200 million of funding from the Carbon Capture and Storage program and the return of $24 million to the budget;
- Return of unallocated funding from the Biodiversity Fund to the budget ($213 million over the forward estimates);
- Return of $143 million of unallocated funding from the Carbon Farming Futures program to the budget;
Savings of $200 million of funding from the Clean Technology Program and return of $162 million of unallocated funding to the budget; and
The $248 million in cuts to APS management structure and implementing more efficient procurement of agency software.
Australia's 500 biggest polluters currently pay a fixed price of $24.15 per tonne of CO2 emissions, but under a floating price they could pay as little as $6 per tonne.
- with Jonathon Swan and AAP.