Wednesday, May 26, 2010

Meanwhile, if you took Abbott at his word...

The spending cuts proposed by the Coalition in its reply to the budget pose a risk to the management of the economy and could endanger the working of the public service according to the head of the Department of Finance.

Appearing before a Senate estimates committee Department head David Tune was asked about the effect of a two-year freeze on public service recruitment along the lines proposed by the Opposition.

"It would have a major effect," he said. "There would be a reduced role in terms of advising government on its budget, there would be a reduced level of service to parliament and our
capacity to project manage construction would be affected."

The Finance Department loses 11 per cent of its employees each year... and relies on graduates to "renew our thinking and keep us rejuvenating".

"While the effect would not necessarily be immediate in year one or year two, losing an entire cadre of graduates would effect down the track," he said.

The department would give the highest priority to complying with its legal obligations , but would face problems if it was unable to replace senior economists and accountants as they left and may have to adopt lower service standards, something that would be "regrettable".

A related Coalition's proposal to cut a further $350 million cut in travel spending on top of cuts just negotiated would cause problems as those contracts can not yet be reopened.

The only way to do it would be to cut the number of flights 17 per cent, most probably "rationing" department by department.

Mr Tune said the department had been given just one week to cost the Building the Education Revolution school stimulus program.

It arrived at the costing in an "unscientific" way but would probably not have reached a different conclusion if it had had longer.

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