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Wong unveils more cuts

Date

Markus Mannheim

Penny Wong.

Penny Wong. Photo: Alex Ellinghausen

The federal bureaucracy will tighten its belt even further as a result of extra spending cuts outlined this morning.

However, the latest crackdown will exclude the Defence Department, which has again received a reprieve.

Finance Minister Penny Wong and Public Service Minister Gary Gray announced the government would strip another $550 million from its agencies over the current four-year budget cycle, on top of the 4 per cent efficiency dividend that public servants are presently struggling to meet.

The pair said the latest cuts "would not come from targeting jobs". However, some Australian Public Service workplaces are likely to have few alternatives left but to shed more staff.

The government has already increased the dividend - an annual cut to agencies' operating budgets - from 1.5 to 4 per cent this financial year, in a bid to save an extra $500 million a year. That decision is expected to contribute to the loss of about 4200 public service jobs in 2012-13.

War on paper, travel

The ministers said the latest savings would be achieved by eliminating wasteful spending and cracking down on inefficiencies.

"The government has looked carefully at the spending of departments and agencies. From this financial year, departments will be required to find savings through a new targeted savings arrangement that reduces expenditure in non-staffing areas," they said.

The proposed savings include:

  • Almost $30 million a year through across-the-board reductions in air-travel spending, including restrictions on business-class flights.
  • Over $60 million in 2012-13 by cutting public servants' reliance on external consultants and contractors.
  • $2 million a year through advertising jobs online rather than in other media.
  • Cutting printing costs by about 5 per cent by increasingly publishing online only, saving about $6 million a year.

The bureaucracy would also consider buying more services on a whole-of-government basis, to leverage the Commonwealth's purchasing power.

The government's decision will make it considerably harder for agencies to meet the dividend without retrenching staff.

When Senator Wong announced the one-off extra efficiency dividend last year, she suggested the bureaucracy avoid redundancies by instead trimming their travel, advertising, printing, entertainment and training costs, and by using fewer consultants.

Today's announcement means agencies can no longer count many of these cuts towards their dividend targets.

Union fears

The Community and Public Sector Union said the latest decision would undermine the bureaucracy's ability to serve the public.

Assistant national secretary Louise Persse said: "While the government's saying this won't affect jobs, we've seen a lot of cuts to federal public service budgets in recent years. We are concerned about the cumulative effects of those."

However, when asked whether Labor's approach to the public service was similar to the Liberals', Ms Persse said the government remained the lesser evil.

"The federal Coalition is talking about $50 billion to $70 billion worth of savings. So there is a question of degree [of difference] here," she said.

"We haven’t seen any clarity from [Opposition Leader] Tony Abbott about how he's going to achieve those savings without traumatic impacts on public services and jobs."

Senator Wong said the government's approach to cutting spending differed vastly from the Coalition's, citing Queensland Premier Campbell Newman's recent efforts to retrench about 14,000 public sector staff.

"When Labor approaches the task of budgeting, we do that in accordance with Labor values. Labor targets efficiencies; the Coalition slashes jobs. And you see that approach very clearly when look to Premier Newman in Queensland."

'Smoke and mirrors'

Meanwhile, the Coalition has dismissed today's announcement as unbelievable and lacking substantive detail.

Shadow finance minister Andrew Robb said the spending were "more smoke and mirrors" before the release of the mid-year budget review later this year.

"They drop out a few minor items about reduced advertising and printing costs, but then in the fine print we see that the lion’s share of the $550 million does not even exist," he said.

"It is part of a consistent pattern of behaviour based on deception, identical to the behaviour that led up this year's budget and their manufactured surplus."

Mr Robb said it was insufficient to make "some vague comments about moving to online publishing".

"People are awake up to them. Look at their track record: they talk about savings but, since coming to office, their spending has outstripped revenue by $173 billion ..." he said.

"They talk about cutting advertising now, after they have already spent $70 million on advertising the carbon tax, including a campaign in which they weren’t even game to mention the words carbon tax."

Labor has announced, in total, more than $13 billion in public-sector savings since it won office in 2007. However, many of these savings are yet to be achieved, as they are scheduled to be implemented in coming years.

Senator Wong and Mr Gray said the latest cuts would apply to neither the Defence Department nor the parliamentary departments, "reflecting the importance of the chamber departments in the functioning of the Federal Parliament".

twitter This reporter is on Twitter: @MarkusMannheim

46 comments

  • This is the difference between liberal and the labor=greens. Liberal has been honest and open about the need to cut the bloated and unneccessary ps jobs in an attempt to stop the budget falling further into the red. Gee if the economy is going strong and we are sitll falling further into the red daily, imagine when the economy starts to hit more hurdles.

    Labor=greens will make out they are not cutting jobs, but will cut the budget so much that job losses have been (and are) the only possible outcome.
    Remember the ps has ballooned under labor=greens, especially in non essential areas due to the introduction of the carbon tax and various other things.
    Only thing that is certain is that you cannot believe a word that comes out from labor and the greens.

    Commenter
    Peter
    Location
    Canberra
    Date and time
    September 25, 2012, 10:21AM
    • What uninformed rubbish. Just like the Coalition, Labor have adopted destructive neo-liberal policies, to the point there's almost no difference between them. The Greens are the only sensible party out there.

      Commenter
      yumq
      Location
      CBR
      Date and time
      September 25, 2012, 3:56PM
    • The scary part is that you and many of your green friends actually believe this, and have convinved many inner city latte sipping voters. The greens are wackos and nutjobs who are in bed with labor. Dangerous, and people will learn this the hard way if they continue to vote for them.
      Seriously 'The Greens are the only sensible party out there.' ??? If the greens are the only sensible party out there, god help us all!!

      Sensible as in the plastic bag ban they championed here that has achieved absolutely nothing but increase already mega rich supermarkets profits?
      Maybe it is the way they have championed the future slum estates like in Gungahlin of overpriced backyardless homes and units that families now try and raise kids in?
      Maybe it is their push for overpriced power, gas, and water whilst the wealthy who could afford solar panels reap the benefit at the expense of the less wealthy?
      Maybe it is putting prisoner right, or refugee rights ahead of people already here who are struggling?
      I know it must be how they stopped public grass being mowed in Canberra, or the poor unkept state of reserves and ovals. They certainly now do make better homes for snakes and other wildlife??

      If only the greens were really about the environment, and not all their other wacko agendas.

      Commenter
      Peter
      Date and time
      September 25, 2012, 4:23PM
    • You mean the difference is that Labor isn't declaring all out war on public services (including health, child protection, education).

      Liberal party at state level in Victoria/NSW/Qld have added tens of thousands to the unemployment queues. They've launched a massive attack on public education in NSW (although not that you'd know it by the whinging from private schools given top priority by the media).

      Although gambling donors have got priority at both Qld and NSW level - I guess that stuff is important though, not like education or healthcare..

      Commenter
      Nathan
      Location
      Sydney
      Date and time
      September 25, 2012, 4:39PM
  • But wait on - haven't Labor been saying they are the champions of the public service, and only nasty Mr Abbott would make cuts ?

    Sounds like this means that Gillard, Swannie and Wong have been deceiving us.

    Commenter
    Hacka
    Location
    Canberra
    Date and time
    September 25, 2012, 10:27AM
    • Good call Hacka - The sharing caring ALP simply cannot bring themselves to call their cuts to the PS what it is - job cuts. Dress it up in words of "restructuring,looking for efficencies" etc but it just duck shoves the inevitable decisions to the Secretaries & SES about what the jobs cuts will be. Talk about a "Pontius" decision!! Again the ducking of responsibility for anything that puts the ALP in a bad light. Reminds me of Interpol's song - "Turn On The Bright Lights" - this government certainly needs to be put under one!!

      Commenter
      Smack
      Location
      City of the Fallen
      Date and time
      September 25, 2012, 11:49AM
    • Hacka, the crazies have gone noticeably quiet.

      Commenter
      mh
      Location
      Brisbane
      Date and time
      September 25, 2012, 2:00PM
    • You won't hear boo from the labor-greens crazies about these sackings by stealth.

      They have put so much effort into bagging state liberal about cutting public service numbers, even if it is all due to trying to repair the mountain of debt that state labor governments left behind.

      Even our local labor-greens has the hide to use this currently as part of their re-election campaign in a vain attempt to hide all their other fiascos over the last few years. You just cannot believe one word they say.

      One thing is certain, public service number will be cut no matter who is running the show, as spending and debt is out of control. This is going to hurt the local economy badly, I just hope people are prepared for our coming recession here.

      Commenter
      Peter
      Date and time
      September 25, 2012, 2:59PM
    • Yeah the difference between the Coalition and Labor here is really who will tell it straight. The Coalition have at least said they will cut the PS..

      Labor deny their intentions with one hand and cut jobs with the other. So much for honesty.

      Commenter
      Hacka
      Location
      Canberra
      Date and time
      September 25, 2012, 3:19PM
    • The "crazies" and the "cookies" of the Labor Party are quiet because they are all over in New York...Swan, Gillard, Carr, Rudd, Mad Uncle Bruno. Just wait until next week when they all come back.

      Commenter
      Sharron
      Location
      Canberra
      Date and time
      September 25, 2012, 3:54PM

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