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Beyond the expected

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.


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Here comes the meat axe
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NFI 12:35 pm 27 Apr 11

chimeralaw said :

I think the public service has become too expensive. The private sector can adjust to the business cycles through (unfortunately) retrenchment and when they finally replace that position, they can adjust the wages based on their needs. They do not have to pay a specific salary. But the APS keeps on getting more money. Eg, an APS6 wage has gone from $50k in 1999 to nearly $80k in 2011. That is over a 62 % growth in twelve years. Private sector salaries have definitely not gone up 62% in that time.

Most IT salaries have not really moved all that much since 1999.

Endless pay rises above the CPI with no chance whatsoever to adjust the salaries to reflect business cycles will eventually be the downfall of the APS and consequently, the ACT in general.

ahhh no. You can’t compare nominal salaries a decade apart!! My guess is the real wage has increased by not much – certainly in line with private sector wage growth. As for increases above CPI – maybe in the good old days but not now! My EBA has no indexation, and any increase we get must be offset by ‘productivity gains’ (read: cuts to other entitlements, longer hours, less training etc).

As for your plan to ‘adjust salaries to reflect business cycles’ – you realise that this will amplify the effects of the business cycle? right? Not sure if the RBA/Treasury would be a fan of this idea…

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