Abbott flags $10bn in savings through job, program cuts
Opposition Leader Tony Abbott has flagged $10 billion in public sector savings. Photo: Alex Ellinghausen
Tony Abbott has flagged Coalition savings of $10 billion which include recently announced cuts to the school kids bonus, reducing the humanitarian refugee in take and public sector job reductions through ''natural attrition''.
In a speech in Sydney on Friday the Opposition Leader said: ''We will trim back the Commonwealth public sector, not because we fail to respect the work of public servants . . . but there's 20,000 more in the Commonwealth public sector than there were five years ago and there hasn't been a commensurate increase in service delivery or efficiency.''
Mr Abbott's office explained that the Coalition had not changed its existing policy of cutting 12,000 public sector jobs through ''natural attrition'' (waiting for public servants to resign and not rehiring). This would save $4 billion, according to a spokesman for the Opposition Leader.
The rest of the $10 billion savings over the forward estimates period would come from binning the school kids bonus ($4.8 billion including administration costs) and $1.3 billion over four years by scrapping Labor's plan to increase the humanitarian intake from 13,750 to 20,000, according to Mr Abbott's office.
Mr Abbott called the school kids' bonus ''a cash splash with borrowed money that has nothing necessarily to do with education'' and said increasing the refugee intake ''would send the wrong signal to the people smugglers''.
''And in any event,'' Mr Abbott said, ''at the moment the people smugglers are determining that intake''.
In a wide-ranging speech to the Committee for Economic Development in Australia, Mr Abbott also said that if the Coalition scrapped the national broadband network ''in its current form'' then ''that's about $50 billion less that the Commonwealth will need to borrow''.
Later, when asked to substantiate the $50 billion in savings given that the Coalition has promised it will still build a national broadband network - albeit one using cheaper fibre-to-the-node technology - Mr Abbott's office declined to say precisely how the claimed savings will be made.
Questioned about Mr Abbott's $50 billion figure, a spokesman for the Shadow Minister for Communications and Broadband, Malcolm Turnbull, said: "We will be very clear with how much and how long the project will take to complete... and how much can be saved in time and money."
Mr Abbott also claimed that if the Coalition wins the federal election Australians can expect ''an instantaneous adrenaline charge in our economy'' and an ''instantaneous surge of confidence''.
''People don't feel rich,'' Mr Abbott told an audience in Sydney on Friday morning. ''That's why they are saving so much themselves''.
Public Service Minister Gary Gray said that Mr Abbott was incorrectly claiming that the Australian Public Service had grown by 20,000 places. In fact, the Australian Public Service has grown by around 13,000 places from June 2007 to June 2012, he said in a statement.
"The opposition's simplistic approach to the delivery of public services, from slashing jobs and services, to the 'thought bubble' of arbitrarily relocating substantial parts of the Australian Public Service all over the place is bad policy with dire consequences," Mr Gray said.
Mr Abbott's figure is based on the budget papers, which state the Australian government sector has grown from 238,623 in 2006-07 to 258, 563 in 2012-13. These figures include Defence Force personnel, reservists and the Australian Federal Police.
According to Mr Gray, the Australian Public Service has grown from 155,424 in June 2007 to 168,580 in June 2012.
The Opposition Leader suggested Australians should look beyond the ''raw headline numbers'' of the economy, which he admitted ''don't look too bad''.
''Now, I know if you just look at the raw headline numbers for economic growth, the last few years don't look too bad despite the global financial crisis,'' Mr Abbott said.
''There was only one quarter of actual negative growth but if you look behind the numbers the situation is not nearly so good. GDP growth per head of population since 2007 has been only one-third of the GDP growth per head in the Howard era''.
This, Mr Abbott contended, was ''why the Howard era now looks like a lost golden age of prosperity''.
''We know that real wealth per head has actually declined over the last five years because of stagnant property prices and because of falling share prices and that's led to so much more restraint in spending which is why so many of our main street retailers and businesses feel under such pressure today''.
Speaking at an event held by the Committee for Economic Development of Australia, Mr Abbott described strong economic growth as a ''magic pudding'' and said one of the ''iron laws of economics'' is that ''government doesn't create wealth, business creates wealth".
Taking what appeared to be jab at Treasurer Wayne Swan's attacks on billionaires Gina Rinehart and Clive Palmer, Mr Abbott said ''sensible governments never go around attacking wealth creators''.
''They never go around accusing people who have invested millions, created thousands of jobs of being a danger to democracy as this government, I regret to say, has''.
with Judith Ireland