Axe to fall on public sector

ScreenHunter_2356 May. 09 09.51

By Leith van Onselen

Reports have emerged today about a large cull about to take place across the federal public service.

According to The Australian, over 200 spending programs face the axe in next week’s Budget, spanning the environment, transport, industry, agriculture and indigenous affairs departments. Apparently, the Australian Taxation Office alone will have to retrench about 3,000 staff between now and October, with similar impacts expected at other agencies and departments:

“The only way to reduce the size of government is to have structural change,” Mr Hockey said.

“And the only way to really have an impact on attitudes in the public sector is to get rid of programs.

Meanwhile, The Canberra Times is reporting that private consulting firms have been hired to pit public servants against each other in various assessments, with the winners getting to keep their jobs:

The process, involving written tests and oral presentations, may remind some of their end-of-school exams…

The Department of Communications has begun the process of asking its 550 staff to reapply for their jobs in the knowledge up to a quarter of the organisation’s workforce will not make the grade…

All other staff wanting to stay with the department will be put through the same process by September.

Certainly, the Abbott Government is displaying some big cajones in undertaking such widespread cuts to the public service.

Arguably there is some scope to streamline operations and trim back office staff, given the large number of public sector agencies and duplication across federal and state levels. Indeed, a quick glance at “Public administration and safety” employment in the ABS quarterly employment statistics – a proxy for the federal and state bureaucracies – shows that public sector employment levels have surged relative to population since the early 2000s, suggesting there is room to cut:

ScreenHunter_2229 May. 01 10.27
Moreover, this growth in public sector employment appears to have been led by the ACT, as illustrated in the next chart:
ScreenHunter_2230 May. 01 10.31
That said, the ultimate test for the Abbott Government will be to ensure that the cuts do not impact adversely on front-line service delivery (e.g. nurses, teachers, social workers, etc), which is where pain will be felt most by the voting public.

Comments

  1. The real winners will be those members of the old super scheme who are almost 55 and who get a redundancy timed for 54.11 age.

    Anyone who has survived large scale generaous redundancies knows that for long term employees keeping your job is second prize!

    • The Patrician

      There is no cash for redundancies.
      Reduction will be managed by not extending temporary employees, natural attrition and redeployment of the remainder.

      • GunnamattaMEMBER

        As the older APS members (those who were in pre 1995 and were members of the CPS scheme) approach 54 years and 11 months they face a situation where they either take the pension or their rights diminish until such point as they are circa 60-62.

        For many this means that just hanging in there has been well worth it.

        For those in the defined benefits PSS Scheme (circa 1995-2002/3) they dont face the same temptation to opt out circa 54/11, but do have a better than average pension at the end.

        For those post 2004 there is the PSS accrual scheme which is basically no better than any industry fund.

        It isnt necessarily a matter of redundancies but the fact that many older APS staff will find it in their interests to take retirement – if they are free from debt and can live off their pension [otherwise they will keep working].

    • casewithscience

      Actually, all PS Contracts now include a clause that you can’t reapply within a certain period and all policies include an default exclusion of VR recipients from new jobs.

  2. And for all the hairy chested talk of Howard/Costello those charts show an explosion of public servant numbers under their term in office.

    quelle surprise!

  3. A report featured in the Oz a whole back showed that the Federal Public Sector had executive overload, 29% of all staff managerial – 1 manager for every 2.5 staff.

    And who could forget the focus on Canberra salaries: 2,900 earning between $200-$750k; 13,000 earning over $150k. In Canberra alone! Suggests scope for savings but an important issue is the rise is PS salaries in the past decade which has generally exceed wage rises in the key are sector. Monopoly workers with monopoly union extracting blood from the stone of the Australian taxpayer.

    Re front line workers – wouldn’t mind if teachers were required to undergo strict testing/assessment before being loosed upon the children. And some sort of use by date is necessary – god forbid some cantankerous 69 year old still in the classroom in the future.

    • ‘… exceeded wages rises in the private sector…’

      (Edit function says I don’t have permission to edit!)

      • casewithscience

        3d1k

        A lot of this results from the broken pay schedules. I was (recently) in the public service as a professional officer (lawyer). I came from 300k per year as a private practitioner to a public role at about 140k, even then I was in a managerial band because the prof band was limited to 110k (which was ridiculous given my experience). So the HR department put me into “management”, even though my substantial role was as a professional officer.

        In sum, don’t let the “managerial” demarcation lead you astray.

    • intertubernet

      Sometimes you seem reasonable 3d1k, then you let slip your inner ageist (or other *ist) depending on the context.

      It’s sad, because you’re obviously bright. Just not nearly as open or fair minded as you think you are.

  4. ceteris paribus

    One thing that can be said in defence of public servants- they don’t do half the harm that politicians do.

    • johnathonbbbrown

      They bloody do! They sit around trying to think up ideas to make more complex laws and taxes. Most are just bludgers.

      • Deenominator

        Yeh, bludgers the lot of them unlike those honest, hardworking taxi plate owners to whom the government owes an income stream right? They don’t bludge at all..

  5. nexus789MEMBER

    The Luddites are in charge. Slashing programs is the moron’s way of trying to cut costs – payroll costs fall but other costs rise as they backfill the ‘gaps’ with contractors and consultants. A more intelligent (if you can find some) way would be to review and baseline all public expenditures – zero-base them. Just because you have spent money on a program for 20 years does it mean you have to continue the program or programs.

    I guess it makes these sociopathic goons feel happy that they can trash jobs, lives, etc and impose whatever rules and taxes they feel like. We have our very own little intolerant, religious, etc, ‘Tea Party’ here in Australia. What joy. Imagine the chaos if we have a real crisis.

  6. Taken from an email I received:

    After I received your mail I thought it would be interesting to see just what all this is costing, so to that end I sat down with the calculator, with the last round of Fed. Pollie salary rises from the Remuneration Tribunal (below) for Kevin Rudd’s Government (which I believe has gone up again by $75 more odd thousand for PM etc. etc. on down the line).

    Office Additional salary (%) Salary as of 1 July
    Prime Minister 160 $507,338
    Deputy Prime Minister 105 $400,016
    Treasurer 87.5 $365,868
    Leader of the Opposition 85.0 $360,990
    House of Reps Speaker 75.0 $341,477
    Leader of the House 75.0 $341,477
    Minister in Cabinet 72.5 $336,599
    Parliamentary secretary 25.0 $243,912
    Other ministers 57.5 $307,329
    Shadow minister 25.0 $243,912
    Source: Remuneration Tribunal.
    So if I press all the right buttons, the TOTAL annual wages for the 150 seats in the Parliament are:
    Prime Minister $507,338
    Deputy Prime Minister $400,016
    Treasurer $365,868
    Leader of the Opposition $360,990
    House of Reps Speaker $341,477
    Leader of the House $341,477
    Minister in Cabinet $336,599
    Parliamentary secretary $243,912
    Other ministers* 307,329 x 71 = A$21,820,359
    Shadow ministers* $243,912 x 71 = A$17,317,752

    “Instead of giving a politician the keys to the city, it might be better to change the locks.”
    Doug Larson (English middle-distance runner who won gold medals at the 1924 Olympic Games in Paris, 1902-1981)

    And the TOTAL ANNUAL SALARIES (for 150 seats) = A$41,694,311 – Over 41 and a half million dollars PER YEAR! And that’s just the Federal Politicians, no one else!
    For the ‘lifetime’ payment example (below) I used the scenario that:
    1. They are paid ‘lifetime’ salaries the same as their last working year and
    2. After retiring, the average pollie’s life expectancy is an additional 20 years (which is not unreasonable).
    It’s worth remembering that this is EXCLUDING all their other perks!

    SO, for a 20 years ‘lifetime’ payment (excluding wages** paid while a Parliamentarian)
    Prime Minister @ $507,338 = A$10,146,760
    Deputy Prime Minister @ $400,016 = A$8,000,320
    Treasurer @ $365,868 = A$7,317,360
    Leader of the Opposition @ $360,990 = A$7,219,800
    House of Reps Speaker @ $341,477 = A$6,829,540
    Leader of the House @ $341,477 = A$6,829,540
    Minister in Cabinet @ $336,599 = A$6,731,980
    Parliamentary secretary @ $243,912 = A$4,782,240
    Other ministers** @ $307,329 = A$6,146,580 x 71 = A$436,407,180
    Shadow ministers** @ $243,912 = A$4,878,240 x 71 = A$346,355,040
    Conclusions:
    • TOTAL ‘life time’ (20 year) payments, (excluding wages paid while in parliament) = A$833,886,220 – OVER 833 MILLION
    • Julia Gillard, Kevin Rudd, Paul Keating, Bob Hawke, et al, add nausea, are receiving 10 MILLION + EXTRA at taxpayer expense.
    • Should an elected PM serve 4 years (unlike Rudd & Gillard) and then decide to retire, each year (of the 4 years) will have cost taxpayers an EXTRA Two and a half million bucks a year! A$2,536,690 to be precise.
    • A 2 year retirement payment cut-off will save our Oz bottom line A$792,201,909*** A SAVING OF NEARLY 800 MILLION.
    *There are 150 seats in House, minus the 8 above = 142 seats, divided equally for example = 71 each for both shadow and elected ministers.
    **This example excludes all wages paid while a parliamentarian AND all perks on top of that – travel, hotels, Secretarial staff, speech writers, restaurants, offices, chauffeured limos, security, etc. etc.
    *** 150 seats, 20-year payment of A$833,886,220 less annual salary x 2 years of A$83,388,622. [$41,694,311 x 2]

    You’re Right, you have found where the cuts should be made!
    Action: Push for a MAX 2 year post retirement payment (give ‘em time to get a real job).

    • F%#& 2 years… let the bastards go on Centrelink if they need it (har-dee-har-har)!

  7. David Barnes

    Better still see Ted Macks speech ( Google) about what really needs to be done to their entitlements.

  8. HealthyInvestor

    Essentially 2:1 management of staff and wages in excess of 120k+ for jobs people get paid 60k to do in the private sector. I think its time to start hacking away at the federal level. I think we have 10+ departments responsible for the environment with 2:1 managers. 10+ departments for managing paperwork, job applications etc. They really need to move the government sector into a more contracted based private one so that it can respond accordingly to demand and the supply of ESSENTIAL services not all these random fly by night departments and divisions for ‘feel good political gain’ especially all the ones started by Rudderless and Gilltard.

    I mean, getting a job for life with 120k+ on top of 5% yearly wage rise, double the inflation is crazy. I know public service workers, doc control, nurses etc on 100+ k a year with 3-4 houses and a a new bmw and they aren’t even 40. And all they do is push papers around… Its so crazy that it makes me sick thinking about how one group of people can exploit so many to stay on top for so long.

    Basically if you work for the government you oppress the other 95% of us so that you can live in luxury and treat the rest of us like slaves.

    Our government started is slide around about the 90’s when they realized they could just make new laws to keep pushing up asset prices to make sure the baby boomers always ending up on top but now it just keeps getting worse and worse because every little decision doesn’t seem like its going to effect that many people but all the little’s have now added up to a lot.

    Good luck being under 30 and living in Australia.
    Have fun being a slave for a few decades.

    • As @casewithscience said above, EL != Management in all cases. As a computer nerd if I were to go permie I’d be in the EL bands just to not even compete (~80-90% of private sector salary) with what I get in the private sector.

      This is compounded in Canberra due to main offices with specialists in many forms. There really should be a professional band that sits along side APS and EL, but since there isn’t HR shoehorns professionals into the EL ranks.

  9. I have no issue with the concept of small government, but how about the pollies take the lead and stop with the vote driven legislation and show some intergrity and reduce their own numbers.. For all of the macho talk none of them have the gusto to actually streamline policies or legislation.. Doesn’t win votes.. But adding clauses and strange new rules to the tax system each year does.. Tax, Law, Super all need reform and if someone actually tackled this we could indeed have a smaller government.. Does any one realise how much more transparent things have to be in the APS and the overheads that causes…
    Aussies love bashing the APS, but they also want a government to do everything for them. You can’t have it both ways.