Skip to content Skip to main navigation

Business

Home loans made clear

Here comes the meat axe

By johnboy - 21 April 2011 21

In the sort of news best delivered the afternoon before a five day weekend our Labor emembers are jointly announcing a massive hike in the widely despised lazy policy tool of the efficiency dividend from 1.25% to 1.5% for the next two years.

The Gillard Government today released the ‘Review of the Measures of Agency Efficiency report’ and announced a temporary quarter per cent increase in the efficiency dividend from 1.25 per cent to 1.5 per cent for two years.

Under this measure, the efficiency dividend will rise from 1.25 per cent to 1.5 per cent in 2011-12 and 2012-13, and return to 1.25 per cent for 2013-14 and 2014-15.

Federal Labor representatives for the ACT, Senator Kate Lundy, Dr Andrew Leigh and Gai Brodtmann, welcomed the release of the Review which was commissioned following Labor’s comprehensive report into government administration.

The central recommendation of the Review – to apply the efficiency dividend at portfolio level – will be adopted by the Government.

But fear not, they finish up with this bromide:

The ACT economy is the best performing economy in the country and we will continue to work with ACT Government to deliver for the people in Canberra.

Yippee.

What’s Your opinion?


Post a comment
Please login to post your comments, or connect with
21 Responses to
Here comes the meat axe
Ian 12:19 pm 23 Apr 11

symba said :

. The govt should actually look at the cuts on a dept by dept basis, but that would actually take time.

I have a lot of sympathy for this view, although on the other hand, isn’t that the sort of thing the govt pays executives to do. If they can’t figure out a sensible program for cost takeout, I’d ask what the hell are they getting the executive salaries for? (and in doing so, have identified instant savings).

Wonder which agency will be the first to pull the usual budget cut stunt of getting rid of something cheap but high public profile, to embarass the govt into restoring the funds?

urchin 10:38 am 23 Apr 11

puggy said :

urchin said :

oh my goodness. a 0.25% across the board budget cut. however will we survive?

Uh…this is an increase in the yearly reductions (or “increased efficiency), for perpetuity, that is on top of the coming budget cuts. My place is rumoured to be coping a 20% cut.

well if you are copping a 20% cut the 0.25% “efficiency dividend” is just a drop in the bucket. 1/80th of the overall cut. again, tempest-teapot.

i do agree it’s lazy governance. what they should do is decide on priorities and make sure the priorities have sufficient funding to do their job properly and eliminate sections that they do not feel are priorities.

but as others have pointed out, that would require thought and effort so it ain’t gonna happen.

symba 9:25 am 23 Apr 11

Actually most small agencies run very close to the bone, especially the cultural sector. An extra 0.25% does have to result in loss of positions by not backfilling behind someone that leaves. As cost such as power and rent continue to increase. Giving the cuts decision to portfolio agencies will not result in any change in allocation. The govt should actually look at the cuts on a dept by dept basis, but that would actually take time.

puggy 1:12 am 23 Apr 11

urchin said :

oh my goodness. a 0.25% across the board budget cut. however will we survive?

Uh…this is an increase in the yearly reductions (or “increased efficiency), for perpetuity, that is on top of the coming budget cuts. My place is rumoured to be coping a 20% cut.

vg 11:34 pm 22 Apr 11

urchin said :

vg said :

Why doesn’t the government have the balls to call it what it is. Its an annual budget cut.

“a 0.25% across the board budget cut. however will we survive?”

When a department’s budget runs in the billions you might be able to understand what it means $ wise

yes, it will mean 0.25% less money. for every dollar they get they will have to cut 0.25 cents. for *two* whole years! oh my goodness. however will we survive. it’s the end of the world and we should treat it as such.

You don’t really keep up with federal government finances, do you? That’s on top of the ‘efficiency dividend’ they already fulfill.

But do tell, what else did your Cert II in Finance tell you?

urchin 8:47 pm 22 Apr 11

vg said :

Why doesn’t the government have the balls to call it what it is. Its an annual budget cut.

“a 0.25% across the board budget cut. however will we survive?”

When a department’s budget runs in the billions you might be able to understand what it means $ wise

yes, it will mean 0.25% less money. for every dollar they get they will have to cut 0.25 cents. for *two* whole years! oh my goodness. however will we survive. it’s the end of the world and we should treat it as such.

John Moulis 3:55 pm 22 Apr 11

Public service job cuts are a win win for governments, both Labor and Liberal. Liberal governments like it because they can tell their constituents interstate that they are “cutting back on the fat cats in Canberra”. There is no political harm done in the ACT because “they all vote Labor anyway”.

Labor governments like it because they can tell their constituents interstate that they are “cutting back on the fat cats in Canberra”.

There is no political harm done in the ACT because “they all vote Labor anyway” and – because of the insanity of the last election when Gary Humphries almost lost his seat to Labor’s coalition partners The Greens – Labor is even more convinced that the Liberals are poison in this town and they (Labor) can bash us as much as they like without suffering any adverse consequences.

gentoopenguin 2:02 pm 22 Apr 11

Well if they want to talk cuts, they have to also talk which programs they want to cut at the same time – particularly since Departments usually obtain the dividend through recruitment cuts and freezes. I’m all for a leaner public service but this approach is too scatter-gun to be effective. And the timing is beyond cynical.

sexynotsmart 1:41 pm 22 Apr 11

I’m damn upset about this. I have very keen memories of Labor lambasting the efficiency dividend when in opposition, with ACTU and CPSU chiming in on a semi-regular basis.

Two Prime Ministers’ later and not only is it still in place, but they’re beefing it up.

Have Our Illustrious Leaders learned nothing from home insulation and school halls? Doing things on the cheap will bite you on the backside.

If you’re going to trim the Public Service, TRIM SERVICES.

vg 12:32 pm 22 Apr 11

Why doesn’t the government have the balls to call it what it is. Its an annual budget cut.

“a 0.25% across the board budget cut. however will we survive?”

When a department’s budget runs in the billions you might be able to understand what it means $ wise

urchin 12:13 pm 22 Apr 11

LurkingMarsupial said :

I’m not sure about ‘meat axe’, but I found it somehow particularly disappointing that the two new ALP members apparently think it’s good enough to say “Reflecting the Government’s commitment to protecting jobs the efficiencies should be achieved without resorting to job cuts”. They should or will be achieved how, pray tell? (Clue: it’s not about anyone’s personal theft history/fantasy like “free pencil tuesdays”.)

are you really suggesting that gov’t departments are being run so efficiently that they cannot possibly be cut another 0.25% of their budget without resorting to firing people? firing people is not, in any event, a bad thing if the people being fired are the deadweight.

if the managers can’t figure out a way to lop 0.25% of their budget off without laying people off they should be the one to get fired. two birds, one stone.

LurkingMarsupial 9:51 am 22 Apr 11

I’m not sure about ‘meat axe’, but I found it somehow particularly disappointing that the two new ALP members apparently think it’s good enough to say “Reflecting the Government’s commitment to protecting jobs the efficiencies should be achieved without resorting to job cuts”. They should or will be achieved how, pray tell? (Clue: it’s not about anyone’s personal theft history/fantasy like “free pencil tuesdays”.)

The Lundy/Leigh/Brodtmann quote sits poorly, as a presumably fully prepared response, with the review released by Senator Wong (http://www.finance.gov.au/publications/measures_of_agency_efficiency/docs/measures_of_agency_efficiency.pdf) which says about the 2007-08 additional 2% efficiency dividend (at page 84 of 87):

“The most common actions taken were to place tighter control on recruitment actions (51 per cent), to decrease the number of employees (44 per cent) and to reduce the amount and type of travel taken (38 per cent).”

So, it’s quite possible the additional savings will be taken by portfolios through measures other than job cuts (eg travel reductions, which would be fine by me and the polar bears etc), but ‘should’ or not, it’s hard to avoid prospect there will be (additional) job cuts, and consequently hard not to view those cuts as intended outcome, isn’t it?

But hey, the voters of Fraser and Canberra did elect ALP representatives.

Chop71 9:18 pm 21 Apr 11

drip feed bad news

homeone 8:00 pm 21 Apr 11

And the report recommendations are how surprising ….

Let’s
– Flick the efficiency dividend problem to Portfolio Agencies and let ‘their minister’ decide the cuts,
– Benchmark ‘common services’ ie financial management and payroll, and
– we all should use the same financial system.

And, of course, use ‘shared services’.

urchin 5:48 pm 21 Apr 11

oh my goodness. a 0.25% across the board budget cut. however will we survive? looks like “free pencil tuesdays” will have to go.

Related Articles

CBR Tweets

Sign up to our newsletter

Top
Copyright © 2017 Riot ACT Holdings Pty Ltd. All rights reserved.
www.the-riotact.com | www.b2bmagazine.com.au | www.thisiscanberra.com

Search across the site