Wednesday, September 26, 2012

About those cuts, Ms Wong. Money is fungible

Finance minister Penny Wong says she’ll take an extra half a billion dollars from the public service without touching jobs, but experts don’t believe her.

Unveiling an instruction to agencies to give up an extra $550 million over four years on top of this year’s special 4 per cent efficiency dividend Senator Wong said it had to be done through non-staffing efficiencies.

“Labor targets efficiencies, the Coalition slashes jobs,” she said outside a public administration conference in Canberra.

The required savings include $30 million per year in air travel, $60 million in the use of consultants, $6 million by publishing documents online instead of in print, and $2 million by moving job advertisements online.

But the earlier 4 per cent efficiency dividend announced by Senator Wong in November already required the public service to cut things such as travel, advertising, printing and consultants before touching staff.

“The departmental budget is just one big budget, it's not as though there are separate paper clips or travel or whatever,” said Stephen Bartos, a former finance department deputy secretary.

“Public servants have already been cutting departmental expenses before cutting staff as required. They’ve already done it, they have met the new requirement. That means the extra cuts they now have to make to meet the new target could well involve jobs.”

“Unless the government is going to turn its back on the last 30 years of public sector devolution and have ministers now micromanage how departmental budgets operate, she cannot guarantee this move won’t cost jobs,” said Mr Bartos who is now an executive director of ACIL Tasman...

Former public service commissioner Andrew Podger now with the Australian National University said there was “no way” there could be another cut in departmental budgets without having an impact on public servants.

“It is wrong to imply you can cut public service spending without cutting the services provided,” said Professor Podger. “But all around the country that’s what everyone is saying.”

“The levels of cuts they are trying to make cannot be just efficiencies, they will have to reprioritise services to the public. There is nothing wrong with reprioritisating services so long as ministers stand up and take responsibility for it. That’s what we pay them for. Instead they are making the public service make the decisions about which services to cut and which to wind back.”

Senator Wong said the government had made it priorities clear. “This is a government which has increased its expenditure on education – almost doubled school funding – and I think that shows Labor priorities,” she said.

The defence department will not have to make the new cuts.

“We recognise defence has been asked - as have, frankly, all departments - to contribute to the fiscal objective,” Senator Wong said. “They are not being asked, like other agencies, to find the additional targeted efficiencies.”

Asked whether she thought the Coalition would be able to meet its aim of boosting defence spending by 3 per cent per year she said she looked forward to hearing it explain how.

The government will unveil extra cuts to get the budget back to surplus in the mid-year budget review due in November.

Published in today's Canberra Times, Sydney Morning Herald and Age

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