Morrison holds the Howard line, limits APS growth and cost

By Stephen Easton

May 3, 2016

The federal government maintains it needs no more public servants than its Howard-era predecessors got by with in 2006-07, when the estimated average number of staff on the government payroll was 167,596 and there were four million fewer Australians.

This financial year ends with the estimated average staffing level (ASL) at 166,765 excluding military personnel, just over 500 fewer than was predicted in last year’s budget.

The coming year’s projection in Treasurer Scott Morrison’s first federal budget shows the Commonwealth employing 167,155 on average, keeping it under the arbitrary “line in the sand” it drew last year.

Since 2006-07, the population has also grown from the 20.7 million counted in the Census to an estimated 24.06 million today.

The ASL figure reached a high of 182,505 in 2011-12 and has been receding ever since. Come May 2017, it could end up being lower than expected again, depending on the results of Functional and Efficiency Reviews that are currently in progress in several agencies.

The reviews that have been completed so far are expected to deliver $2.7 billion in savings over the forward estimates, and this financial year will see eight more agencies go through the process.

The budget papers explain a “key contributor” to holding back the headcount is the government’s decision to limit the National Disability Insurance Agency’s workforce to a maximum of 3000. Prior to that, the NDIA was projected to hit over 10,000 staff in 2018-19 but the Treasury document suggests it will “use more efficient non-government models to achieve the same outcomes”.

As at the end of March, some 6997 staff had departed the Australian Public Service this financial year with 1912 of those receiving redundancy packages.

Of almost 30,000 separations since July 1, 2013, over 60% were through natural attrition and the government has extended $197 million 38 agencies to assist with redundancies.

According to the budget’s agency resourcing paper, strictly controlling the size of the workforce to its level a decade ago is “part of the broader effort to modernise public sector efficiency and practices” and there are some silver linings to the policy of cutting the workforce and limiting its future growth:

“Turnover has allowed the government to recruit the right skills against the highest priorities, allowing overall staffing reductions to be offset by temporary increases in targeted areas to implement policy changes and build infrastructure needed to achieve automation and other longer term efficiencies.”

While the government promised last year to drop the efficiency dividend to 1% and recently ran the numbers on setting it at 1.25% or 1.5%, the budget confirms it will remain where it is at 2.5%. The promise of respite from the despised savings instrument has now been pushed back to 2018-19, when it will go down to 2% under the new plan before dropping to 1.5% in 2019-20.

The government says that will make an extra $1.924 billion available compared to previous estimates for the out-years, with $500 million of that earmarked to be reinvested in “transformational Commonwealth public sector productivity and innovation initiatives”.

It also expects its trimmed down public service “to deliver quality services faster, and at lower cost” using digital technologies and to “collaborate with the private and research sectors to collect, manage and share data” in line with the recent public data policy statement.

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