Election 2022: Coalition’s election costings requires departmental cuts

By Tom Ravlic

May 17, 2022

Josh Frydenberg
Treasurer Josh Frydenberg. (AAP Image/James Ross)

Public servants will be asked to find more expenditure cuts in their departments to help pay for the Coalition’s $2.2 billion in election commitments, according to the costings document released by treasurer Josh Frydenberg.

The costings document sets out the planned 0.5% increase in the efficiency dividend that is currently at 1.5%.

It will require government departments to apply their razors to find costs that can be trimmed.

The policy regarding the increase in the efficiency dividend means that departmental funding to government agencies will be slashed by $2.7 billion over the forward estimates.

Overall departmental expenditures will reduce from $327.3 billion to $324.6 billion.

There are departments that can breathe a sigh of relief because there are no changes to the current exemptions to the efficiency dividend.

“This includes, for example, exemptions for agencies such as the National Disability Insurance Agency, ABC, SBS, Safe Work Australia, and small entities with an Average Staffing Level of under 200,” the Coalition policy says.

“As well, further exemptions to this policy will apply to Emergency Management Australia and the recently created National Recovery and Resilience Agency.”

The policy also says that it will be up to the departments to work out the expenditure cuts as there are no line items that are listed as mandatory cuts.

There is also a reference to public sector superannuation in the policy just released, which relates to fixing differences between the contributions made by agencies to the relevant superannuation funds. 

“The 2020 Long Term Cost actuarial report for the Public Sector Superannuation (PSS) found that the employer contribution rate required to fund the superannuation benefits accrued by PSS members from 2020-21 to 2022-23 has risen to 32.5%, while the employer contribution for PSS members is only 16.8%, based on a now outdated triennial cost report,” the policy says.

“Our policy will increase the employer contribution rate to 20%, improving the budget bottom line by $653 million over the forward estimates.”


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