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.
Public Service Minister Gary Gray said Mr Abbott was wrong to suggest the Australian Public service had grown by 20,000.
The APS had grown by around 13,000 places from June 2007 to June 2012, going from 155,424 to 168,580, he said.
"Tony Abbott has no public service policy but slash and burn," Mr Gray said on Friday.
“Today he said there were 20,000 too many people working in the Commonwealth public sector.
“Last week he said he would send public sector workers north, away from the cities and towns across Australia in which they operate.
"This is despite the fact that nearly 60 per cent of the nation's public servants are already employed outside of Canberra, as they should be, to deliver efficient and effective services to the Australian population.
Mr Gray said last year the the OECD's Value for Money report showed the size of general government employment including states and territories was very low in Australia compared to other countries.
“It is one of the best in the world because Australian public servants are located where they can deliver effective and efficient services,” he said.
Member for Fraser Andrew Leigh said the Coalition had previously promised to reduce the public service by 12,000.
"Now it looks like Tony Abbott and Joe Hockey are committing to scrapping 20,000 public service jobs," he said.
“Over recent months, the Coalition has suggested scrapping or scaling back the Department of Climate Change, the Department of Health, and the Department of Defence Materiel.
“When Tony Abbott talks about the 'golden age' of John Howard, Canberrans remember the thousands of public service job cuts, and the resulting rise in unemployment in our city.
“I'm scared at the thought of what a Liberal Government would do to our proud city.”
In a wide-ranging speech to the Committee for Economic Development in Australia, 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''.
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''.