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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.

What’s Your opinion?


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63 Responses to
New efficiency dividend to gouge the agencies
amarooresident3 4:00 pm 29 Nov 11

Bluey said :

dtc said :

well, why would people stay in the (relatively) underpaid public service

Almost spat my drink all over my screen when I read that gem.

About time the top heavy beauracracy was culled. Too many chefs not enough kitchen hands. Bring back APS1s and 2s and stop paying 70k for secretaries and generic admin roles.

Anyone who has worked private sector in canberra scoffs at your ‘underpaid’ comments. Maybe 1/10 public servants work hard for their salary the rest coast through on their flex time and numnerous leave allowances.

Your argument is weakened when you resort to stereotypes to prove your point. I’ve worked in both the private and public sector. Most public servants earn their money in my experience, as do most private sector people.

Bluey 3:27 pm 29 Nov 11

dtc said :

well, why would people stay in the (relatively) underpaid public service

Almost spat my drink all over my screen when I read that gem.

About time the top heavy beauracracy was culled. Too many chefs not enough kitchen hands. Bring back APS1s and 2s and stop paying 70k for secretaries and generic admin roles.

Anyone who has worked private sector in canberra scoffs at your ‘underpaid’ comments. Maybe 1/10 public servants work hard for their salary the rest coast through on their flex time and numnerous leave allowances.

AG Canberra 2:58 pm 29 Nov 11

When an agency spends more than 70 per cent of its budget on staff, then the only real way to save 2.5 per cent is to cut staff. Now we all know there is no money for forced redundancies (these cost a fair bit more than voluntary ones) so not replacing staff that leave and offering ‘business as usual’ voluntary redundancies is the go.

Problem with this is that in many agencies you are already at the point of saying to the minister – we now have to stop doing things we used to do because there are just not enough staff. What services would you like stopped? Of course the reply is don’t stop doing anything…..

So agencies cut and hope for the best. They move staff from one overworked area to another depending on the weekly (or daily) focus of the MO and hope like hell they don’t stuff up in a big way.

As long as we help these guys get back to that magical surplus next year we have done our job. Our service to the punters of Aus might be crap….but we got that surplus. Yay!

p1 2:11 pm 29 Nov 11

My biggest issue with the these campaigns is the assumption that after the last couple of thousand years of government bureaucracies, with all their problems, the current crop of leaders think that they can make them work better simply by giving them less money and telling them to deal with it.

amaroovian 2:02 pm 29 Nov 11

Diggety said :

I don’t understand what is “bad” about efficiency dividends(?)

What is so “bad” is the government does not subject the efficiency dividend to themselves (i.e. the parliamentarians). Let’s have a 4% cut in the size of Cabinet and the number of Ministers thanks. That reduces increased parliamentary allowances and saves a whole lot of money. A 4% reduction in the number of Comcars, or at least mandatory car pooling might help reduce costs – yeah right, like that will get a look in. Actually lets get rid of the Comcars altogether and make them queue for cabs in the cold at Canberra airport like the rest of us! They will then be “encouraged” to share a ride by the taxi queue staff so it’s a win/win all around. What about a 4% reduction in the cost of the Lodge refurbisment – it’s not like they are using the whole house anyway.

Will Penny Wong’s comments about travel cost reductions result in her and her Cabinet colleagues travelling in cattle class on a non-flexible fair with Jetstar or Virgin – or will they continue to travel business class on a fully flexible fare with Qantas and avail themselves of the Chairman’s lounge memberships?

I look forward to some Dept heads developing anatomical fortitude and telling the government they can shove approximately 4% of their new budget initiatives next year ….

Classified 1:54 pm 29 Nov 11

It sounds like a lot, but I reckon there are plenty of ways to reduce departmental spending. In the IT space, there is still a lot of staff training that could go (temporarily), for example. There are also the conferences and planning meetings requiring travel (I personally know govt staff who travel internationally every few months business class). Freeze recruitment in some areas for a while, and cut back on stuff like redesigning logos. Reduce the use of consultants and contractors for a while.

Could this add up to 4%? In some places, yes, in others maybe not. As someone who works with a range of public service organisations, I still see plenty of spending that could be turned off. Once we get through the next few years, and the budget is in surplus again, we can turn the tap back on a bit.

bugalugs 1:45 pm 29 Nov 11

amarooresident3 said :

Hypocrisy from politicians is nothing new I guess, but Gary should talk to Joe Hockey about his proposal to cut 12,000 jobs out of the public service before he gets too outraged.

I can’t say the Libs inspire too much confidence however they were upfront and announced they intended to cut 12,000 jobs if they got into govt.

Now, it is one thing to argue the merits of doing that and the effect it would have on the Canberra community however shouldn’t the argument be about the promises made.

The ALP with it’s 3 local representatives was very vocal in making the point that they were going to hold the effeciency dividend and be much kinder to the PS and Canberra. As Gary H. pointed out 14 months later a 2.5% broken promise efficiency dividend.

VicePope 1:25 pm 29 Nov 11

Diggety – I know a few smaller agencies, which spend a high proportion of funds on staff, that are disproportionately affected. Centrelink can close an office or two, DFAT can wind down an embassy and there is so much that could be gained from Defence that it could fund most of the APS-wide cuts with little pain. But, as Alan Asher pointed out before resigning, the same options are not there for something like the Ombudsman. Any cut comes from the sharp end.
And +1 to DTC and AmarooResident3. Gary H, in particular, should just shut up given his support for the loss of 12,000 jobs and the induced local recession it would create. He’s useless, but the ALP lot are not much better.

dtc 1:07 pm 29 Nov 11

Diggety said :

I don’t understand what is “bad” about efficiency dividends(?)

They work if there is a corresponding reduction in workload/programs or if Departments are allowed to cut programs. But since the government sets the programs and the spending on those programs, those amounts cannot be reduced

Therefore, although the ‘dividend’ is 2.5% of the total amount spent by a Department, it actually all needs to be taken from staffing and ‘variable’ costs (such as travel or IT or similar), which results in a reduction in those costs of much more than 2.5%. Or 4%, for next year. 4% may not sound like much, but its (for example) 1 in 25 staff

Most departments could easily point to programs that have too much money (being spent on industry or regional areas or whatever, rather than expenditure in the department) which could be cut without any real political or social impact. But those programs are not the subject of ‘efficiency dividends’.

The other issue is that the government has delegated the problem. It goes to agencies and says ‘cut 4%, except dont cut these areas’ and then makes the agencies do all the hard work and take the blame. If the government wants cuts, it should direct those cuts.

Finally, although most people can point to areas that are overstaffed or under worked, given that the efficiency dividend has been around for 10 (?) years, there arent many easy answers left. Cut staff, reduce service levels (as Customs did recently), reduce expertise (resulting in botched programs…). As I said at the start, if you cut staff and cut workload, that is fine. Cut staff and not workload – well, why would people stay in the (relatively) underpaid public service

basketofcat 1:02 pm 29 Nov 11

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

http://www.macrobusiness.com.au/2011/10/the-qantas-challenge/#comment-103237

amarooresident3 12:50 pm 29 Nov 11

Hypocrisy from politicians is nothing new I guess, but Gary should talk to Joe Hockey about his proposal to cut 12,000 jobs out of the public service before he gets too outraged.

Diggety 12:43 pm 29 Nov 11

I don’t understand what is “bad” about efficiency dividends(?)

Chop71 12:21 pm 29 Nov 11

Here comes Mully

Gungahlin Al 12:19 pm 29 Nov 11

PS: <3 Annabel Crabb…

Gungahlin Al 12:18 pm 29 Nov 11

Who wants a package?

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