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Federal budget 2015: Cormann’s incredible shrinking government

Finance Minister Mathias Cormann says $106 million has been clawed back from the Department of Health’s “contractor, corporate, staff and property costs” with $10 million of that going to improve the department’s “analytical capacity”. Another $7.6 million has been extracted from the Department of Education, with $123.4 million more to come from axing and redesigning programs.

The Attorney-General’s Department has already begun squeezing $54.2 million over five years out of “administration efficiencies”, Cormann adds, and he says visa simplification and “targeted departmental efficiencies” in Immigration and Border Protection will save $168.1 million from 2015-16.

Eight departments will be subject to “further functional reviews” in the next few weeks: Agriculture; Environment; Foreign Affairs and Trade; the Treasury; Attorney-General’s Department; the Tax Office; Social Services; and the Australian Bureau of Statistics.

The Mint will not be sold off “because it is operating as an effective business and it is well-regarded by its international peers” and a decision on whether Australian Hearing should be privatised won’t be made without more consultation with hearing impaired people and other stakeholders.

A new scoping study has been announced to look at the possible sale of Australian Rail Track Corporation in next year’s budget, and Cormann announced the outcome of earlier studies looking the potential sale of other assets.

Defence Housing Australia is not for sale:

“However, the Government will review Defence Housing Australia’s accounting, information technology and business reporting systems to improve the transparency of the cost of providing services. There will be no change to the entitlements of Australian Defence Force members.”

But for the Australian Securities and Investments Commission’s registry services business, on the other hand:

“The Government will undertake a competitive tender process to test the market on the capacity of a private operator to upgrade and operate the ASIC registry. The Government will maintain ownership of the base data.”

The scoping study into another candidate for privatisation, the Intra-government Communications Network, has begun and its report is expected later this year.

The Finance Minister says the government has also resolved to sell off East Block, the headquarters of the National Archives, and West Block, which housed the Australian Electoral Commission’s head office until last Friday. It will retain ownership of the even-more-iconic sandstone Treasury building and its twin, the John Gorton Building, where Cormann’s department resides.

On the other side of the lake, ageing former public service haunts Anzac Park East and Anzac Park West (featuring a snazzy little detached restaurant) will also be sold, along with any regional properties deemed “surplus” such as a facility in Mount Macedon, Victoria, once used by the Australian Emergency Management Institute.

Vacant buildings leased by departments will now be managed at a whole-of-government level, which the government expects to save another $200 million over a decade, and Cormann set local hearts a flutter with his announcement that:

“The long-term accommodation needs of the Department of Immigration and Border Protection and local impacts will be considered as part of this review.”

Many residents of Belconnen, where the DIBP is located, have fears of a severe local downturn if the big department moves.

The government will in fact have 35 less entities following the fifth round of “smaller government” reforms, which include two mergers — the Department of Defence absorbs the Defence Materiel Organisation and the Freshwater Invertebrate Pests Subcommittee merges with the Invasive Plants and Animals Committee — while the South Australian Government is taking over the functions of the Commonwealth’s Consumer Advocacy Panel, which stopped operating on January 30.

Cormann claims previous tranches of the “smaller government” reforms have already reduced the number of Commonwealth entities by 286 and saved $1.4 billion. From September 2013 to February 2015, the federal public service has shed over 17,300 jobs, he adds, “… mostly by natural attrition or voluntary redundancies.”

“The Government has achieved its objective to reduce public service staffing levels below 2006-07 levels,” he said today.

All the details, portfolio by portfolio

Agriculture:

The following bodies will be abolished with any ongoing functions to be performed by the Department of Agriculture: the Aquaculture Committee; the Community Consultative Committee; the Industry Liaison Committee; the National Decision Making and Investment Working Group; and the Statutory Fishing Rights Allocation Review Panel.

The SCAHLS Point-of-Care Tests Working Group and the Sub-committee on National Forest Health have ceased, with residual functions of the latter transferring to other plant health sub-committees.

The Freshwater Invertebrate Pests Subcommittee will merge with the Invasive Plants and Animals Committee.

Attorney General’s:

The Government will save $54.2 million over five years from 2014-15 through efficiencies in the administration of the Attorney-General’s portfolio.

The Administrative Review Council will be abolished with any ongoing functions to be performed by the Attorney-General’s Department.

In addition, $0.4 million will be saved over four years from 2015-16 through the National Gallery of Australia extending its outsourced security and guarding functions.

Communications:

The ABC Splash Strategic Advisory Group will be abolished, following its work to assist the ABC in the development phase of ABC Splash.

Defence:

The Defence Materiel Organisation will be consolidated into the Department of Defence.

Education and Training:

$7.6 million will be saved over four years from 2015-16, through functional and efficiency reforms to the Department of Education, with further savings from terminating or redesigned programmes bringing total savings to $131.0 million.

The Office for Learning and Teaching Strategic Advisory Committee has been abolished and will be replaced with a program to be administered by the university sector.

The work of the Aboriginal and Torres Strait Islander Higher Education Advisory Council will conclude later in 2015, saving $1.3 million over four years from 2015-16. The Government will continue its focus on Indigenous higher education through the Prime Minister’s Indigenous Advisory Council, other consultation and forums.

Seven vocational education and training governance bodies will be replaced by the Australian Industry and Skills Council saving $1.6 million net over five years from 2014-15. This includes the Data and Performance Measurement Principal Committee; the Workforce Development, Supply and Demand Principal Committee; and five bodies identified in the 2014-15 MYEFO for abolition.

The following bodies have ceased operations: ANU Section 68 Pty Ltd – following the decision of its directors to liquidate; the National Partnerships Implementation Working Group – following conclusion of the Smarter Schools National Partnership Agreements; the Teacher Education Ministerial Advisory Group – following completion of its report; and the Online Assessment Committee (with its functions to be performed by the Online Assessment Working Group.

Environment:

The Water Act Review Expert Panel will be abolished following completion of its review.

The Emissions Reduction Fund (ERF) Expert Reference Group has ceased following completion of consultations on the establishment of the ERF.

The River Murray Water Committee has ceased, with residual functions to be performed by the River Murray Operations Committee.

Finance

The Hume Garden Estate joint venture has been abolished, following wind-up of the Albury Wodonga Development Corporation.

Health

$106 million will be saved over four years from 2015-16 by consolidating the corporate and legal services of the Therapeutic Goods Administration into the Department of Health; removing duplication between the activities of the Department and several agencies; rationalising the structure of the Department to better align to Government priorities; rationalising business support functions, property costs and contractor expenses. $10 million of the saving will be reinvested into the analytic capacity of the department.

The National Lead Clinicians Group will be abolished with residual functions to be conducted by the Department of Health, saving $17.1 million over five years from 2014-15.

Immigration and Border Protection:

In the Department of Immigration and Border Protection $168.1 million will be saved over four years from 2015-16 through targeted departmental efficiencies and a program of visa simplification.

The Office of the Migrations Agents Registration Authority will be consolidated into the Department of Immigration and Border Protection, saving $1 million over four years from 2014-15. The OMARA Advisory Board will be replaced with a non-remunerated independent reference group, saving a further $0.2 million.

Final savings from the consolidation of the Australian Customs and Border Protection Service into the Department of Immigration and Border Protection are fully quantified in the 2015 Budget, including an addition $200.1 million and taking total savings to $270.1 million over five years from 2014-15.

Industry and Science:

The CSIRO Environment Strategic Advisory Committee will be abolished with its functions to be reallocated to a flagship advisory committee. IIF investments Pty Ltd will also be abolished.

The CSIRO Marine National Facility Steering Committee will become a subcommittee under the CSIRO Board.

In addition, the Bureau of Resource and Energy Economics has been consolidated into the Department of Industry and Science.

The Consumer Advocacy Panel has been abolished and its function transferred from the Commonwealth to the South Australian Government.

Prime Minister and Cabinet:

Six trusts have been dissolved due to the transfer of assets to the Indigenous Real Estate Investment Trust: the National Indigenous Participation Trust; the Indigenous Investment Trust; the Scarborough House Office Trust; the Scarborough House Investment Trust; the National Indigenous Property; and the Indigenous Property Trust.

 

Author Bio

Stephen Easton

Stephen Easton is a journalist at The Mandarin based in Canberra. He's previously reported for Canberra CityNews and worked on industry titles for The Intermedia Group.