Coalition plans fresh $1.5bn public service cuts to fund election promises | Australia news
The Coalition has announced a further $1.5bn in cuts to the public service to pay for its $1.4bn in election promises, a move that could reduce jobs by 3,000.
On Thursday the finance minister Mathias Cormann and treasurer Josh Frydenberg unveiled Coalition costings which promised limited exemptions from the “efficiency dividend” and accused Labor of stripping more out of the public sector by cutting spending on consultants.
Cormann told reporters in Melbourne the Coalition had been “very frugal with our election commitments … in stark contrast with Labor’s $35bn spending spree”.
“All of our spending commitments during this election campaign have been more than paid for with a $1.5bn reduction in expenditure.
“In contrast, Labor is just lazily going after retirees, hardworking mums and dads and family businesses with higher taxes.”
Labor’s shadow treasurer Chris Bowen went on the counterattack, arguing the Coalition has failed to show savings to account for a $4bn promise to the east-west road link in Melbourne, instead leaving it as a “contingent liability” because delivery will depend on approval from the Andrews government.
With a program designed to raise $154bn of revenue over four years Labor has outspent the Coalition in the election campaign, with big promises of $14bn more on education, a $2.3bn cancer package and $4bn for childcare in addition to bigger projected budget surpluses.
Since the April budget the Coalition has promised just $1.4bn of new spending, with the biggest ticket item a $309m extension of the Pharmaceutical Benefits Scheme.
To pay for the measures, the Coalition would maintain the current 2% efficiency dividend for two years, before reducing it to 1.5% in 2021-22 and 1% in 2022-23.
The Community and Public Sector Union warned the $1.5bn cut amounts to a 3,000 job cut. CPSU national secretary Nadine Flood accused the Coalition of “pillaging the public sector for six years”, warning that the “11th hour costings” show they will “cause even more damage to essential services the Australian people rely on such as Centrelink and Medicare”.
In 2014 the Abbott government extended the Gillard government’s efficiency dividend to 2.5%, which it projected would cut 16,500 jobs from the public sector over three years.
Labor plans to return $500m to government agencies’ budget and hire 1,200 more people in human services. But the opposition also proposes to save $2.6bn from reduced spending on contractors, consultants and travel, which the Coalition argues is a de facto public sector cut “politically framed … as something else”.
The Coalition costings claim it “will reduce departmental funding to government agencies by $600m less than proposed by Labor”.
“The Morrison government will reduce total departmental expenses over the 2019-20 forward estimates period from $288.6bn to $287.1bn, whereas Labor would reduce departmental expenses further to $286.5bn.”
Agencies to be spared from the Coalition’s cut include: the National Disability Insurance Agency; financial regulators Apra and Asic; cultural institutions the Australian War Memorial, National Archives of Australia, National Gallery of Australia, National Library of Australia and National Museum of Australia; agencies with fewer than 200 staff; and the Australian Signals Directorate and Office of National Intelligence.
Existing exemptions for the ABC, SBS and Safe Work Australia will also be extended.
In Sydney, Bowen told reporters that Labor does not accept the need for the efficiency dividend.
“We don’t need to because we’ve made tough decisions,” he said. “It’s just further cuts from the Liberals 36 hours before people are voting.”
Bowen said the Liberals were either “lying to the people of Melbourne last week when they promised the east-west link or they are lying to the people of Australia today”.
“East-west Link is still not in their budget numbers … Are they building the east-west link or are they not? Is it know the budget or is it not? On today’s announcement, it is not.”