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Planned public service cuts add to Canberra uncertainty

The sun sets over Parliament House.

The sun sets over Parliament House. Photo: Karleen Minney

The Coalition is being urged to reconsider jobs cuts to Canberra's public service after Treasurer Joe Hockey said he was worried about the latest forecast for unemployment.

Labor MP Andrew Leigh said a re-think was needed given the new forecast and uncertainty about the United States' economy.

Australia's unemployment rate is due to rise in 2014 as the International Monetary Fund downgrades growth prospects, in its World Economic Outlook which outlines future risks for Australia and the global economy.

The body forecasts Australia's growth at 2.5 per cent for the 2013 calendar year, down from the 3 per cent predicted in April.

For calendar 2014, the IMF predicts Australian growth at 2.8 per cent, rather than 3.3 per cent.

The IMF report also downgrades growth around the globe, including for Australia's major trading partner China.

"Worryingly, the IMF forecasts Australia's unemployment rate to rise from 5.6 per cent in 2013 to 6.0 per cent in 2014," Mr Hockey said.

"The downside risks documented in the World Economic Outlook confirms significant risks to the Australian budget that will need to be appropriately managed by the coalition government."

Dr Leigh, the Member for Fraser, said on Wednesday the major concern was the possible damage to the US economy from the shutdown of government.

"Pure politics could cause the world's largest economy to default which would almost certainly send the United States into recession and that deadline is now eight days away," he said,

“Any increase in unemployment is concerning and certainly I would be calling on the Coalition to re-think their plans to reduce the size of the Canberra public service.

“The last thing Canberra needs at a time of global uncertainty is more job losses.

“Then we have the spectre of [Defence Minister] David Johnston suggesting Defence won't be quarantined from these cuts after all which would be a breach of the promise they made before the election."

The Coalition says it will reduce the public service by 12,000 jobs nationwide over three years through natural attrition.

10 comments

  • It's one thing for a Labor MP to decry PS cuts. Scant difference that will make. What's the Liberal's ACT senator-elect have to say about the matter? Hmmmm. Tumbleweeds, crickets and dogs howling in the background. Otherwise, silence.

    Commenter
    So what about Z?
    Date and time
    October 09, 2013, 1:59PM
    • It is right to downsize the public service. IT is also right to plan for the economic downturn. When the GFC hit, Rudd injected billions into the economy through the schools upgrades. These were all small spends individually which required very little planning but kept Australians in work and thus the economy turning.

      Abbott has the time to plan. The time to build. Reducing the public service and freeing up Infrastructure Australia funds could see the start of High Speed Rail, Sydney's 2nd Airport and transport systems throughout Australia.

      By planning now the projects will be shovel ready and Australia has to opportunity to once again avert the financial slump or meltdown, but this time with long term infrastructure and increased productivity for all.

      Commenter
      stoney
      Date and time
      October 09, 2013, 2:37PM
      • I agree in part. The problem is that you can’t roll out any new infrastructure without either employing new PS staff or redistributing existing PS staff. So if you sack them today and use that money to roll out infrastructure you will only have to spend more money long term recruiting new people to enact new infrastructure.

        The sensible solution is for the government to use debt to start infrastructure projects now, providing both infrastructure for our children and jobs for today. But economic and social sense seems to have gone out the window lately, so I predict more smoke and mirrors than bricks and mortar.

        For the record, I'm employed in the private sector and would probably benefit personally from PS cuts as I could buy a new house cheaper, but I still don't think it's a sensible idea to cut just to fudge short term numbers.

        Commenter
        Tom Calthorpe
        Location
        Canberra
        Date and time
        October 09, 2013, 3:30PM
      • Australian governments regardless of which side of politics for the last 30 to 40 years have shown little understanding in regards to infrastructure planning. Everything has gone quiet again regarding high speed rail, 2nd airport like usual after the election and probably wont even be mentioned again for a few years at least.
        Already today Joe Hockey has said that unemployment rates will be rising in 2014, so I dont think the present government will be injected money back into the economy or infrastructure spending if unemployment rates keeps rising.

        Commenter
        Brian
        Date and time
        October 09, 2013, 4:24PM
    • The PS is full of deadwood - from the top to the very bottom.

      I say cut, slash and then burn.

      And after all is done we may see some green shoots emerging from the charred undergrowth.

      Commenter
      Firestarter
      Location
      Where the Knobs Hangout
      Date and time
      October 09, 2013, 3:46PM
      • I'm loving you. If I get burned, it will mean a big payout. Then, because I have my redundancy planned out, I'll be getting the social security pay out in 11 months. They work it so that they won't pay out until your redundancy should have run out (folks, do not pay out your mortgage in one hit), but there are ways around this. You do not want to know the hilarious pay off to this scenario, Firestarter. OK here it is: Consultancy at $1100 a day minimum. I'll throw some Fijian 10 cent coins in your hat if I see your laid-off -- coz the APS custom wasn't there anymore -- private sector arse on the street. Maybe.

        Commenter
        Golden Reign
        Date and time
        October 09, 2013, 8:53PM
      • I read with absolute horror that an EL1 is of equivalent pay-rank to a Lt Colonel (Army)! At first I thought it must be a joke. I also note that an ASO 6 is the equivalent rank to an Station Officer in the ACT Fire Brigade. Ridiculous! And this is why we need to rationalise the APS. It has become bloated with ELs - in particular EL 1s - how many readers could honestly say that they have met an EL1 with the same level of leadership quality, ability and courage to compare with a Lt Colonel, or an ASO 6 who would be capable of managing the responsibility of a team of fire fighters? Weed out the EL1s and EL2s and make the ones who are left actually earn their obscenely high wages...

        Commenter
        Bronte
        Date and time
        October 10, 2013, 8:41AM
    • There is plenty of opportunity to remove PS staff without having to impact front line services. Look at the fat in some departments with unwarranted need or cultures of treating citizens as evil dodgers of their obligations ......

      Commenter
      Oz_Altair
      Location
      Cantopia
      Date and time
      October 09, 2013, 8:28PM
      • Doubt you will see any green shoots, the public service these days is filled with mostly older workers 40 years and up. Young people just dont want a career in the public service these days. With the ageing Australian population as a whole, expect to see the public service with even a older workforce in the future.

        Commenter
        Kogarah Dragon
        Location
        Ageing Workforce.....................
        Date and time
        October 10, 2013, 8:05AM
        • Where was Dr Leigh 6 months ago when the VRs were being handed out like lollies in my department as a result of the rolling "efficiency dividends" decreed by the previous government. Let he who has not sinned cast the first stone Dr Leigh..

          Commenter
          Really Dr Leigh..
          Location
          Canberra
          Date and time
          October 10, 2013, 8:51AM
          Comments are now closed

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