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Labor's public service job cuts could hamper Coalition's plan to slash


Noel Towell, Hamish Boland-Rudder

Mathias Cormann

Mathias Cormann Photo: Glenn Hunt

Political recriminations are flying in the wake of the government's decision to dump its policy to save $5.2 billion by cutting 12,000 public service jobs by natural attrition.

The Coalition is using Finance Department advice to accuse Labor of hiding job cuts of 14,500 over the next four years caused by the ALP's efficiency dividends, and to justify apparently walking away from the policy.

Finance Minister Mathias Cormann said the public sector jobs policy would now be handed to the Coalition's commission of audit, which will report early next year.

Mr Cormann pledged his government would have more to say on public service jobs and redundancies in the mid-year economic outlook, due next month.

The Coalition was warned before taking government that it would take a ''very tight'' hiring freeze to achieve its 12,000 public service job cuts without mass redundancies.

The head of the Parliamentary Budget Office, which costed the then opposition's policies before the election, also told a Senate committee on Monday that his office predicted a slowdown in voluntary departures from the bureaucracy, making the target harder to achieve.

In a Senate estimates hearing on Monday, Finance Department secretary David Tune said the "raw" data underpinning the 14,500 number had been progressively placed on the public record as the decisions were made by Labor.

But the advice issued on Tuesday was provided to the Coalition government about two weeks after the election, the Finance boss confirmed.

Mr Tune also revealed the rate of "natural attrition" in the service had collapsed from 6.6 per cent in 2011-12 to 4.1 per cent, which would see 7137 public servants leave their jobs voluntarily in 2013-14.

Fairfax Media projected Labor's mass reduction in the size of the public service almost two years ago – a projection that was rejected by the ACT's federal Labor parliamentarians at the time.

Budget analysis in January last year predicted 14,000 jobs would go between 2012-13 and 2014-15 as Labor fought to find a budget surplus.

Providing the detail of his department's calculations, Mr Tune said on Tuesday that 826 jobs would be trimmed through "more efficient management structures".

"The second one is the efficiency dividend ... the assumption we have made in coming to the figure of 4808 from the impact of the additional efficiency dividend is 55 per cent of that would be to staff costs and 45 per cent to non-staff costs," the departmental secretary said.

Finance calculated from projected wage levels that another 8819 jobs would need to go, Mr Tune told the committee.

In a fiery exchange in the estimates hearing, Senator Cormann said the government was serving the "public interest" by handing its public sector jobs policy to the audit commission.

"The government made a judgment that it was in the public interest for people to understand why we had to reassess how to implement our policy of reducing the size of the public service through natural attrition," the minister said.

He accused Labor senator Penny Wong of not disclosing budget decisions when she was in government.

"Given the implications of the decisions you made in government, not disclosed, before the last election," Senator Cormann said.

Senator Wong shot back, accusing Senator Cormann and his colleagues of misleading the electorate and ditching an electorate promise.

"The Coalition is moving away from its commitment to the Australian people before the election, just as they said they would," Senator Wong.

"They can't get $5.2 billion through a staffing freeze, they're going to have to get it through some other mechanism and they are using inaccurate and misleading leaks to some people in the media to try to justify a breach of an election commitment."

Earlier, Senator Cormann said the 14,500 job cuts, which would mostly have come through voluntary redundancies, were not funded, and have might have blown department budgets.

"This is another hit to the budget bottom line," Senator Cormann told the ABC.

"Labor based its budget on an expectation of 14,500 cuts in the size of the public service without making any provision to fund the necessary redundancies.

"Only 800 redundancies were provided for."

The effect on the budget bottom line could be further compounded by the Coalition's decision to delay or adjust its own policy of 12,000 job cuts.

The ACT's Liberal senator, Zed Seselja, has decried Labor's cuts as damaging to the economy.

"Whilst running an entire campaign focussed on supposedly saving jobs, Labor was cutting jobs behind Canberrans' backs," he said.

"Not only did the former government lie about their job cuts, they irresponsibly also failed to ensure that departments could continue to meet their budgets."

The full extent of redundancies under Labor will likely be revealed in the annual State of the Service report, due for publication in December.

At the end of a late night Senate estimates session on Monday featuring the Australian Public Service Commission, Public Service Minister Eric Abetz hinted broadly at the figures contained in the upcoming report, which is a comprehensive annual snapshot of the public service and its year in review.

During Monday night's estimates session, Public Service Commissioner Stephen Sedgwick calmly batted away a number of questions from Senator Seselja about the number of voluntary redundancies since June 2012 and the contribution of budget decisions made by the previous Labor government.

"I don't have a comprehensive list; I'd have to take that on notice," Mr Sedgwick told Senator Seselja.

"There are a number, agencies need to live within their budgets and in order to live within their budgets there are times when they need to reduce staff and that's happened."

But as the session wrapped up, the commissioner conceded there had been a decline of "hundreds" in the number of public servants during the reporting period.

His minister was more explicit, telling the hearing the figure was more likely to run into the thousands.

"I think you'll find within that report that the number of redundancies will be potentially in the hundreds if not in the thousands," Senator Abetz said.

48 comments so far

  • none of these cuts are the fault of the labor govt or liberal govts. these cuts are all necessary because the Executive of these departments can't manage their department's staffing structures and classifications like they did 20 years ago. Back then there were procedures/guidelines on how teams should be structured. now you can have teams with 2 EL2's, 6 EL1's, 3 APS5's and no APS6's or APS1-4's. ridiculous. The Executive signs off on their forward estimates so they should be well aware 2- 3 years in advance of staffing level restrictions going into the future and start planning accordingly.

    redundant excess
    Date and time
    November 19, 2013, 10:08AM
    • I agree that there has been significant creep in the APS levels over the past 10 years; however, one of the big issues I see in my department is the abolition of support and admin roles. These were traditionally the lower level positions and they have all but disappeared. In the section I work for there are no APS1-2s at all, three APS3s and a couple of APS4s (the majority are APS5 and above). The support positions are the first ones to be abolished when the "efficiency dividend" type cuts come through. The simple fact is that there is no low level APS1-3s to support more senior staff is low value tasks. Everyone is expected to do all of their own administration (sometimes supported by inadequate "shared services").

      I regularly see EL1s and EL2s in my area spending hours trying to organise a 1 day trip (and the associated mountain of paperwork). Now THAT is a waste of taxpayers money in my opinion. There was a time when an APS1 or 2 was the "administration" expert in the section and did all of this type of work for the senior employees.

      I really do think the explosion of higher levels is partly due to fact that we actually need more of them - because they now spend too much of their time doing menial admin tasks.

      Date and time
      November 19, 2013, 10:47AM
    • There is a paralysis in the management at some Agencies. Management are completely disconnected from what the staff are doing so are not able to make good decisions. Plus they might take advice from the person immediately below them in the hierarchy, but most likely not. Middle management and above only: manage upwards; tack with the people at a similar rank; but completely ignore the people below. That's why the whole chain of command concept does not work. If the PS is to be effective, it's got to get rid of the whole hierarchical model.

      Date and time
      November 19, 2013, 11:10AM
    • "Labor based its budget on an expectation of 14,500 cuts in the size of the public service without making any provision to fund the necessary redundancies...."

      Did we expect any different from those Labor numnuts? Whether it's their great Gonski, their great NBN dream, or their great NDIS dream - they never can figure out how to fund any of it. Dreaming is so easy, but doing it is so hard! I'm so glad that Labor is now doing their dreaming on their own money and not on the taxpayers.

      Date and time
      November 19, 2013, 12:59PM
    • Probably the proportion of APS1-6 is way down because the pay rates for these jobs are rubbish, and you can't attract the necessary people.

      Everything about the public service is robbing Peter to pay Paul to make things look good to some ignoramus in the higher levels.

      The whole idea that you can just cut by writing numbers on pieces of paper, which is the method of both Labor and Coalition, is just ludicrous. It may or may not be the case that there are too many public servants. But you can't do it by just writing numbers like 12000 on pieces of paper, and like the Captain on the Star Ship Enterprise, say "MAKE IT SO".

      Date and time
      November 19, 2013, 1:42PM
  • Didn't Keating cut more just as many if not more PS positions than Howard? History could be repeating.

    James Daniels
    Date and time
    November 19, 2013, 10:12AM
    • This is not a shock. When you have billions in waste and mismanagement something had to give no matter who won government. Still people were happy to buy the great labor-greens con locally here in Canberra. The reason we still have a local labor-green council running the place, promising the world, and spending millions on fairly land projects they cannot afford to ever build. Jumping all over minority issues as a distraction. Smoke and mirrors. All the while jobs have been going for years, but the unions remained quiet for fear of upsetting their labor-green masters.
      The coalition will have to cut further, no matter what they claim. As long as they target the massively bloated EL and above levels this is a good thing for Australia. You simply cannot have departments where nearly 50% of employees are EL and above levels. Do not believe the spin about paying them this way to avoid losing their skills to the private sector. Another con and fairy land story..
      Canberra has grown fat and distanced from reality under labor-greens. How many dual income public servant couples with no children or a single child do you know, whining and complaining how they cannot survive on the $160,000-$250,000 they are bringing in. Reality check long over due here.

      Date and time
      November 19, 2013, 10:45AM
      • good job Pete

        Date and time
        November 19, 2013, 11:29AM
      • Pete.... you forgot the latte sipping bit.

        Date and time
        November 19, 2013, 12:09PM
      • Spot on!

        Date and time
        November 19, 2013, 12:17PM

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