While the efficiency dividend is a relatively blunt instrument (former Treasury Secretary Ted Evans once said that it was “lazy budgeting”), it has an honoured position under various governments seeking to shave some money from the forward estimates.
We’re told that the Government will – for two years – increase the efficiency dividend from 1.25 to 1.5 per cent. This, we’re told, will save $465 million over the forward estimates.
I think there is considerably more scope to have a higher efficiency dividend for larger organisations. Many have been playing the game: new policy proposals more than compensate for the efficiency dividend and there is plenty of fat.
So I propose that the efficiency dividend be increased to 2.5 per cent for organisations with more than 500 staff. And for the Department of Climate Change and Energy Efficiency, the efficiency dividend should be 100 per cent.
Some departments have become top-heavy with senior management. They could prune their management tree and easily be within the targets.
daddy dave
22 Apr 11 at 7:56 am
And it is, as Ted Evans noted, lazy budgeting because it pushes the onus back onto agency mandarins to make ad hoc cuts to please political masters instead of the politicians making effective policy decisions about programmes and setting an agenda. This creates a trickle down effect in the agencies, with mandarins pushing for assistant secretaries, who push for band ones, who push further down for staff to “find” efficiencies. This creates a bizarre environment in which the question asked is “how can I please the person above me and get a pat on the head which might aid promotion prospects?” instead of the correct question, “what is required for effect delivery of public services?”
Abu Chowdah
22 Apr 11 at 8:28 am
To illustrate, what the government needs to do is say, “Okay DIAC, we don’t need you to effectively process asylum seekers coming by boat.” Instead, DIAC are expected to pull cuts out of their fucking arse.
Government needs to take responsibility for what the cuts do to programme delivery. Instead, this creates a situation where they can say, “Oh we asked for an efficiency dividend but in regard to [SOME MAJOR FUCK UP THAT WIGHT EMBARRASS THE GOVERNMENT] that’s on the head of [X DEPARTMENT] because that’s not what we envisioned when we asked for cuts.
This is an area where any mandarin who had any stones would front up to Senate Estimates and first list all cuts due to the artificial efficiency demand and then say “as instructed by X government of the day, we can no longer deliver X services until we receive appropriate funding”. In your eye, amateur-hour motherfuckers!
Abu Chowdah
22 Apr 11 at 8:41 am
Not only are efficiency dividends lazy policy – they are bad policy. It always the public service to select what gets cut and they get to share the pain with the taxpayer, rather than cut that which adds the least value to taxpayers.
Sinclair Davidson
22 Apr 11 at 9:01 am
“Not only are efficiency dividends lazy policy”
I agree, and after working in universities which had this type of policy for years, it seems to lead to (a) things being less efficient because you end up with expensive staff doing trivial crap because the person that is supposed to do the trivial crap doesn’t exist; and (b) “cutting corners” being renamed “efficiency gains”.
Its also worthile noting that in many human service areas which are very labor intensive (teaching, police, health, DOCS etc.), if you already have a reasonably tight management structure (or as tight as it can be given the number of people that need to deal with government bureaucracies) it’s going to be very hard to actually get any real efficiency gains via simple cost cutting.
conrad
22 Apr 11 at 9:32 am
Working for a small agency (can’t say which), it is difficult to bear. We are near breaking point, while larger agencies have so much slack that they barely notice it. Sinc’s point is spot on. It is both lazy and bad policy from politicians reluctant to make a real decision. Somehow pm&c always manage to get more funding despite not directly administering any programs. There are deeper cuts that can be made in the public service no doubt, but as others have said, some fat remains while muscle and connective tissue gets cut. Senior public service managers, eager to please their ministers, are reluctant to ever blame fuck ups on the efficiency dividend as it can invite personal retribution in terms of career prospects. Those that toe the line get the plum jobs. Ultimately, the government doesn’t want high achievers in the SES, but compliant fools. Don’t get me wrong, some SES are brilliant (Gary Banks, for example, springs to mind), but they get ahead by playing the game. Others are just not capable of managing themselves, let alone others and taxpayer dollars. If they were to do it, the government will criticise them for not coming up with a viable alternative. The personal cost isn’t worth it.
Skuter
22 Apr 11 at 10:12 am
I would love to know what it would take for the CPSU to campaign against the ALP, even on a single issue? Of course, as a union in a very unique position, they should be banned from affiliating with, and donating to any political party. How can people take seriously the claim that the APS is independent when the main union representing public servants is in bed with the ALP?
Skuter
22 Apr 11 at 11:33 am
Suck it up pubes.
Not nice when promises are made to you and then broken is it ?
And who was it that squealed about how the liberals were going to cut the PS at last election ?
Who was it that held public meetings in Canberra on this scare campaign ?
Who took the lead, together with Kate Lundy in whipping up a frenzy amongst public servants at lunch time rallies ?
Why, none other than ANDREW LEIGH !
What a guy.
No Worries
22 Apr 11 at 12:06 pm
Moron.
Abu Chowdah
22 Apr 11 at 4:38 pm
Classy argument
No Worries
22 Apr 11 at 5:53 pm
Met your equal?
Abu Chowdah
22 Apr 11 at 5:57 pm
The smart thing to do is decide what activities – or even divisions or whole departments – are unnecessary, and give them the chop.
The dumb thing to do is make no decisions, do no thinking, make no calls, and tell the agencies to continue as they were, but make do with a little bit less.
daddy dave
22 Apr 11 at 8:33 pm
Exactly, DD!
Skuter
22 Apr 11 at 10:20 pm
What I’ve been saying. Policy decisions need to be made by government instead of this pushing down to middle managers who end up trying to please line managers and political masters.
Abu Chowdah
23 Apr 11 at 4:02 am
To clarify the argument, perhaps Samuel or a reader might provide any evidence that efficiency dividends actually increase efficiency.
Jim Belshaw
24 Apr 11 at 11:19 am
[...] 2.5 per cent as is mentioned in MYEFO itself (page 216) - which is a 167 per cent increase). Lazy budgeting indeed and slack proof [...]
Swan’s 2012-13 prayer at Catallaxy Files
29 Nov 11 at 6:19 pm