Labor targets public service job cuts, Efficiency Dividend

Thankyou for waiting.Your call is… [pic: CPSU]

Centrelink’s infamous call centre queues are the latest attack front in the Federal Election Campaign after Labor announced a $1.9 billion cull of government consultants and contractors to restore staffing levels at the Department of Human Services, Medicare and the Australian Taxation Office.

The loathed Public Service Efficiency Dividend, the trigger for an estimated 14,000 public sector jobs losses, could also be on the chopping block after Labor vowed to hold an immediate inquiry to find “new measures” to replace savings in the 2016-17 Budget – without cutting more jobs or increasing spending. (More on that a little further on.)

Announced by Shadow Finance Minister Tony Burke and Shadow Minister for Employment and Workplace Relations Brendan O’Connor on Sunday, the proposed measures double down on the tactic of fuelling mistrust of the Coalition’s plans for social services – especially around outsourcing and alleged privatisation plans for Medicare.

[quote]While accusations that there are plans to “privatise” Medicare have been emphatically rejected by Prime Minister Malcolm Turnbull, Labor is keeping the spotlight on troubles around the delivery of frontline services.[/quote]

Public anger over long call waiting times at Centrelink, compounded by problems with the MyGov online access facility, has been boiling over for at least the last two years, with public frustration exploding in May last year after an Australian National Audit Office report found more than a quarter of calls to Centrelink just got an engaged signal.

As the election campaign enters its final days, Labor has promised to take $500 million listed as savings from “public sector transformation” in the 2016-17 Budget and redirect the money “to keep Medicare in public hands.”

[quote]“This funding will also go to improving service provision at the Australian Tax Office and the Department of Human Services to reduce Centrelink call waiting times and increase call centre staffing,” Labor’s statement said.[/quote]

Just how much call centre improvement $500 million shared between at least three agencies will buy is questionable, even on official public service figures.

“The department [Human Services] has estimated that to reduce the KPI to an average speed of answer of 5 minutes, it would need an additional 1000 staff at a cost of over $100 million each and every year,” the ANAO 2015 report into Centrelink’s call centre debacle revealed.

By those numbers that’s $300 million alone gone on just one agency over three year forward estimates.


Efficiency Dividend review … but no promises

Still deeply unclear is whether Labor is proposing to scrap the Efficiency Dividend (this year sitting at 2.5 per cent) in its entirety – or lower the rate of the annual cut to more traditional levels of between 1.25 per cent and 1.5 per cent.

“Labor will conduct a review, to be concluded by 1 January 2017 to investigate how to replace the 2016-17 Budget Efficiency Dividend and the 2015-16 MYEFO Efficiency Target for national cultural and collecting institutions in the 2017-18 Budget with new measures that achieve the same savings, without targeting staffing costs,” the Opposition’s latest statement said.

[quote]Asked whether this meant the Efficiency Dividend would be dropped or just reduced to previous levels, Labor’s Campaign Office would not offer numbers or further clarification.[/quote]

However the Community and Public Sector Union, not surprisingly, is backing Labor’s policy.

“Our community has a right to expect Governments will think smart so they can spend money efficiently while providing the services we need,” said CPSU National Secretary Nadine Flood.

“We welcome this common sense decision from Labor, which reflects their policy reached in 2015 and will benefit all Australians. This is a big step for public services and could see regional jobs which have been ripped out of services like Centrelink and Medicare being restored.”

Ms Flood said billions of dollars had been “stripped out of public services” and handed to the Coalition’s “multinational consultancy firm mates like KPMG, PricewaterhouseCoopers and Deloitte.”

“There’s been an incredible growth in private sector contracting, with staff frustrated at seeing plenty of waste in these megabuck contracts but only cuts to jobs and core services.”

The CPSU has been an ardent opponent of the Efficiency Dividend since it was introduced by Labor under the Hawke government in 1987 because agencies typically resort to retrenchments to meet the mandate.

[quote]Despite being formally affiliated to Labor, the CPSU took the extraordinary step of suspending all of the union’s election campaigning support for the second Rudd government in 2013 after the Efficiency Dividend was boosted from 1.25 per cent to 2.25 per cent.[/quote]

That increase under Labor was inherited by the Abbott government and ultimately trumped plans by former Treasurer Joe Hockey to slash public service numbers by 12,000.

Biparisan support for Digital Transformation

With Prime Minister Malcolm Turnbull using the Digital Transformation Office as the main bulwark against Labor’s accusations of planned Medicare privatisation Government News asked whether Labor had a position of the continuation of the DTO if it was elected and where the agency would sit in terms of the machinery of government.

“Labor is supportive of Digital Transformation Office’s key objective to get ‘government services…delivered digitally from start to finish.’ Of course we are – it’s Labor policy,” a Labor Campaign spokesperson said.

“Labor announced its “Digital First” policy in the June 2013 update to the National Digital Economy Strategy. The objective of Digital First is “priority government transactions will be end-to-end digital by 2017” so that “by 2020, four out of five Australians will choose to engage with the Government through the internet or other types of online service,” the Labor spokesperson continued.

[quote]“Imitation is the sincerest form of flattery, but like the National Broadband Network, the DTO is another example of Malcolm Turnbull making big promises and failing to deliver.”[/quote]

Irrespective of who wins on Saturday, the mess that is Medicare and Centrelink’s ageing transactional processing system overstretched call centres and still be there to clean up.

And it won’t be cheap.

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One thought on “Labor targets public service job cuts, Efficiency Dividend

  1. A large number of contractors work in or provide services in support of the Centrelink call centres. So the estimated savings will not deliver the improvements claimed. Once again we see policy proposals that lack an understanding of the underpinning detail. The CPSU might get more members but there will be little improvement in customer service.

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