With the Rudd Government's deficit now expected to reach as much as $60 billion, speculation centres on the likelihood of tough spending cuts in next week's federal budget. Often overlooked, however, is the fact that the Government has been steadily cutting back on public expenditure for well over a year now.
One of the most contentious of the savings measures identified by Finance Minister Lindsay Tanner in the last budget was the 2 per cent ''efficiency dividend'' imposed on all government departments and authorities save for Defence. This was on top of the existing Howard-era figure of 1.25 per cent.
The larger departments have not been unduly troubled in meeting the ''dividend'', but it has had a notably disruptive effect on smaller agencies like the Australian War Memorial and the National Library. Indeed, some of these agencies have gone public with their concerns that the cuts have compromised their ability to carry out their core functions. One agency the Australian Bureau of Statistics has become embroiled in union and industrial action as a result of inept attempts to retrench a number of middle-ranking officers, and a general air of despondency and gloom has settled on the organisation.
Morale has plummeted across the publicly funded science sector, too, with the closure of CSIRO agricultural research sites at Mildura and Rockhampton and cutbacks in funding for laboratories engaged in research into food and agricultural production.
For governments, ''efficiency dividends'' represent a relatively pain-free means of achieving substantial spending cuts. They attract little in the way of adverse publicity, and they devolve the painful and difficult choices about whether to cut services or let staff go to senior bureaucrats. But, they are a very blunt instrument, particularly when applied to the smaller agencies already operating on a tight budget and with little room for financial manoeuvre.
Some, like the ABS and the CSIRO, have had to compromise their own work and shed staff which, given the Federal Governments recent efforts to stimulate the economy by handing out billions of dollars to taxpayers in the hope of preventing large-scale job losses, is ironic. Adding to the irony is the fact that the Government's original reason for cutting public sector spending was to bring inflation under control.
The fact that the Reserve Bank of Australia now regards inflation as having stabilised suggests the Government should re-examine its indiscriminate approach to public service cuts. Not only are they adding to unemployment, but they are having a significant and retrograde effect on the delivery of essential services. In short, they are a false economy.
What Keelty built
Few, if any, modern-day Commonwealth departments or authorities have expanded as rapidly as the Australian Federal Police over the past eight years. In early 2001, the AFP's responsibilities lay more or less in enforcing Commonwealth criminal law and protecting Commonwealth interests from crime. Its budget in that financial year was $365 million. Today, its responsibilities cover counter-terrorism, drug trafficking, major fraud, and money laundering, as well as international peacekeeping and law-enforcement capacity-building from PNG to the Philippines and its budget for 2008-09 has grown to $1.78billion.
Overseeing the AFP's expansion, in terms of manpower and reach into the highest level of government, was Mick Keelty, who yesterday announced his early retirement, to take effect on September 2. It was the ''war on terror'', declared by the US and enthusiastically endorsed by the Howard government, that was the making of the AFP. Nevertheless, it was Keelty's administrative skills and his willingness to enthusiastically back every initiative in pursing terrorists at home and abroad, real or imagined, which enabled the expansion.
His success in forging productive and cooperative relationships between the AFP and counter-terrorism authorities in Indonesia and elsewhere stands as probably his No1 achievement. But there were stumbles, too, notably the AFP's overzealous pursuit of Mohamed Haneef, a suspect in a terrorism incident at Glasgow airport in 2007. An inquiry found the evidence against Haneef was ''completely deficient'', but Keelty has never apologised, or adequately explained the AFP's role in the matter.
Keelty's success over the years has been based rather more on terror and crime being politically convenient to the government than on the AFP's success in combating either.
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