Finance Minister Penny Wong with Treasurer Wayne Swan. Picture: Alex Ellinghausen
The federal bureaucracy is set to tighten its belt even further as a result of extra spending cuts outlined this morning.
However, the latest crackdown will exclude the Defence Department, which has again received a reprieve.
Finance Minister Penny Wong announced the government would strip another $550 million from its agencies over the current four-year budget cycle, on top of the 4 per cent efficiency dividend that public servants are presently struggling to meet.
The government increased the dividend - an annual cut to agencies' administrative and operating budgets - from 1.5 to 4 per cent this financial year, in a bid to save an extra $500 million a year.
That decision is expected to contribute to the loss of about 4200 public service jobs in 2012-13.
Senator Wong said the latest cuts "would not come from targeting jobs", yet some Australian Public Service workplaces are likely to have few alternatives but to shed more staff.
The Finance Minister said the savings would be achieved by eliminating wasteful spending and cracking down on inefficiencies.
"The government has looked carefully at the spending of departments and agencies. From this financial year, departments will be required to find savings through a new targeted savings arrangement that reduces expenditure in non-staffing areas," she said.
The proposed savings include:
- Almost $30 million a year through across-the-board reductions in air-travel spending, including restrictions on business-class flights.
- Over $60 million in 2012-13 by cutting public servants' reliance on external consultants and contractors.
- $2 million a year through advertising jobs online rather than in other media.
- Cutting printing costs by about 5 per cent by increasingly publishing online only, saving about $6 million a year.
Senator Wong said the bureaucracy would also consider buying more services on a whole-of-government basis, to leverage the Commonwealth's purchasing power.
Labor has already announced more than $13 billion in proposed public-sector savings since it won office in 2007.
However, many of these savings exist on paper only, as they are scheduled to be implemented in coming years.
Senator Wong said the government's "methodical and responsible approach to finding savings in the public service is in stark contrast to the Liberals".
"State Liberal premiers had the opportunity to progress considered savings, but instead chose to indiscriminately cut jobs.
"We will always find new ways of delivering essential government services, while ensuring value for money to taxpayers - and without targeting jobs."
The latest cuts would apply to neither the Defence Department nor the parliamentary departments, "reflecting the importance of the chamber departments in the functioning of the Federal Parliament", Senator Wong said.
