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Home loans made clear

New efficiency dividend to gouge the agencies

By johnboy 29 November 2011 63

Wayne Swan

The excellent Annabel Crabb has been tweeting from Penny Wong’s MYEFO press conference and brings the bad news that an extra efficiency dividend will be hitting the public service.

Here are the tweets:

    — Penny Wong has confirmed a one-off EXTRA efficiency dividend across the public service next year – 2.5 per cent.

    — That is additional to the existing 1.5 per cent efficiency dividend. Ouch.

    — She is advising agencies to cut back on hospitality, advertising and consultants. Also asking that they use teleconferencing more.

    — Exemptions include federal jurisdiction courts and tribunals. And a list of cultural institutions.

    — Incidentally, Govt will help agencies trim back by installing a new bureaucratic outfit – the Efficiency Improvement Branch

    — Who will presumably never eat lunch or use consultants.

UPDATE: The Canberra Times has more on this.

Further Update: The MYEFO is up for your perusal as is Wayne Swan’s waffling media release.

ANOTHER UPDATE: The Liberals’ Senator Gary Humphries is furious:

It was only July last year when Labor announced its election policy to hold the efficiency dividend at 1.25 per cent, cancelling a scheduled reduction to 1 per cent. Then in April this year Labor broke that promise and increased it to 1.5 per cent. Now, just seven months later, Labor has increased next year’s efficiency dividend to 4 per cent, the highest it has ever been.

“To keep these policies in your back pocket before the election and announce them afterwards is gutless, pure and simple,” Senator Humphries said today.

“This is yet another broken promise from Labor.

“Andrew Leigh, Gai Brodtmann and Kate Lundy should be ashamed for misleading Canberrans before the last election.

One more update for the road: Senator Lundy has launched a defence of the Government’s actions while stepping in to bat for some threatened agencies:

Smaller agencies have been exempted from the one-off efficiency dividend (appendix A), including our national cultural institutions, and the Government’s strong expectation is that agencies will continue to meet the efficiency dividend without resorting to forced redundancies.

Federal Labor representatives for the ACT, Senator the Hon Kate Lundy, Gai Brodtmann and Dr Andrew Leigh, welcomed the announcement to exempt smaller agencies and protect jobs, but expressed their concern the Australian National Botanic Gardens (ANBG), the National Portrait Gallery (NPG), and the National Capital Authority (NCA) had not been included among the list of agencies exempt from the temporary efficiency dividend.

We will be making strong representations to the Minister for Regional Australia, Regional Development and Local Government Simon Crean and the Minister for Sustainability, Environment, Water, Population and Communities Tony Burke to ensure these important national cultural institutions are protected, in line with the Government’s policy to apply the efficiency divided at the portfolio level.

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63 Responses to
New efficiency dividend to gouge the agencies
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bystander_effect 8:52 pm 02 Dec 11

VicePope said :

but you’re tired of reading this.

At least that bit gets a +1

VicePope 9:34 am 02 Dec 11

After ages of seeing this stuff every time there’s a fiscal scare, I have some part answers. First, most agencies can do some things more cheaply than contractors. Contractors have to make money and there is always a high residual agency cost in managing the contract and the relationship. Second, for most routine purposes, yesterday’s stuff does almost as well as today’s or tomorrow’s. Wait until times are better or the agency really needs the new IT or executive fitout. Third, how much travel is really necessary and how much is about flag-waving or hand-holding? Its direct and indirect cost (time lost at airports and in transit) is huge and the gain is often marginal. God gave us teleconferencing and e-mail and they can be used a lot more. Fourth, how much “management” by generalist SES and EL staff is actually productive? One agency I know described better than a third of its staff as having principally management roles, in relation to a diminishing number of troops. Fifth, don’t package people unless the agency is really sure it won’t need them or their skills for the future. Rehiring or re-engaging the same or similar folk as contractors a bit down the track (at twice the cost) is simple waste. Sixth, set hard priorities about what won’t be done and make sure Ministers know what they are – not all correspondence, for example, requires a reply or more than an acknowledgment. (This would require a less supine approach by agency heads and senior management, but they’re paid for it and should start earning their money and leading from the front). Seventh, do what can be done to move away from agency-differential pay rates and – ye gods – individual arrangements. People who want to work will do so for the same salary as those doing similar work and it’s a hell of a lot cheaper to manage. Eighth, suggest government hack into Defence, the black hole where more money dies pointlessly than anywhere else.
I’ve got more, but you’re tired of reading this.

Thumper 9:03 am 02 Dec 11

littlevixen said :

In my department (which shall remain nameless), we just had a non-ongoing EL2 resign only to come back the next day as a contractor. As an EL2 he was earning around $125k. As a contractor doing the same job he’s being paid around $300k. I would LOVE to know who approved that!

That is considered a saving as the funding comes from a different bucket of money.

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