Something for new Treasurer Frydenberg to consider

Something for new Treasurer Frydenberg to consider.  Read this letter from US President Trump to Speaker of the House of Reps and the President of the Senate.  Here is a snippet:

Under current law, locality pay increases averaging 25.70 percent, costing $25 billion, would go into effect in January 2019, in addition to a 2.1 percent across-the-board increase for the base General Schedule.  We must maintain efforts to put our Nation on a fiscally sustainable course, and Federal agency budgets cannot sustain such increases.  Accordingly, I have determined that it is appropriate to exercise my authority to set alternative across-the-board and locality pay adjustments for 2019 pursuant to 5 U.S.C. 5303(b) and 5304a.

Specifically, I have determined that for 2019, both across‑the‑board pay increases and locality pay increases will be set at zero.  These alternative pay plan decisions will not materially affect our ability to attract and retain a well‑qualified Federal workforce.

What does this mean you ask?

President Donald Trump said he’s canceling pay raises for most federal workers that were to take effect in January, citing “serious economic conditions” and the strain that the raises would place on the federal budget.

Through this action, the US Federal budget will save $25 billion.  This would be a real save as in a reduction of expenditure rather than a Swan-Save which would be an increase in taxes.

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45 Responses to Something for new Treasurer Frydenberg to consider

  1. Bruce of Newcastle

    Right now the job market in the US is hot. Unemployment claims this morning were again below the consensus estimate (213.0K vs 215.0K, from WSJ markets page).

    Trump’s timing is excellent: if the Left complains he can say that public servants can always leave – there are plenty of jobs in the private sector!

    Seeing that most of those public servants probably vote for the Democrats it’s a win-win too.

  2. Tim Neilson

    This would be a real save as in a reduction of expenditure rather than a Swan-Save which would be an increase in taxes.

    I take your point, but to describe mere non-increases as a “reduction” is in my view inaccurate.

  3. Fair point well said. But in Spartacus’ part defence the increases were already priced in. But still fair point.

  4. zyconoclast

    Swan-Save

    = Swan dive

  5. John Constantine

    What are the American fifth columnists in their public service going to do?.

    Develop an insane hatred of their country and work to sabotage it and topple the government?.

    Any more than they already are?.

  6. Infidel Tiger 2.0 (Premium Content Subscribers Only)

    A real saving would be to feed every Federal employee through a woodchipper.

  7. President Trump’s cojones are of stainless steel and the size of soccer balls. When was the last time we saw a politician not of the left with such courage of his or her convictions? Margaret Thatcher perhaps.

  8. RobK

    But still fair point.
    A wage freeze might let inflation do its work. (Provided there is some. If not, it at least stems the haemorrhage.)

  9. Trax

    At a minimum all public servants and politicians should have a pay freeze while the government has debt.

  10. Tim Neilson

    A wage freeze might let inflation do its work. (Provided there is some. If not, it at least stems the haemorrhage.)

    Absolutely Rob. I’m strongly in favour of what Trump has done here. But, even aside from IT’s woodchipper strategy, there could be genuine “reductions” and we shouldn’t drift into thinking that there have been when in fact there haven’t.

  11. Pedro the Ignorant

    If Friedeggburger tried that on here you would hear the howls of outrage in outer space.

    “But…but… we’re entitled! … fairness…equalidy … save us Bill Shorten”.

  12. Norman Church

    Unlike many in this country, President Trump appears to understand that one cannot lose votes from people who have no intention of voting for you.

    He also has a level of political courage that I cannot see replicated by anybody anywhere in this country. I suspect that this outcome is partly because he is not a career politician and partly because of his robust personality. It probably also helps that he does not feel the need to pander to doctors’ wives or a news media that will hate him whatever he does.

    Defund the left now!

  13. RobK

    A wage freeze is the low hanging fruit to rising expenditure but it is a signal to the bureaucrats to which way the wind is blowing. Real cuts to duplication and inefficiencies will hopefully follow. The real art would be to devise a scheme where bureaucrats are encouraged to be lean in expenditure (something like the above penalty for debt-although that more likely pushes taxes up. Productivity is one thing but selecting what needs to be federal vs state vs local, without duplication might still be fertile ground for savings. Defund enviro lobby is a good start.

  14. Habib

    Not as effective as dropping thousands of DCM*s on the parasitic swine, with zero benefits. But far beyond the capability of the incumbent invertebrates here.

    *Don’t come Monday.

  15. billie

    Trump

    What balls he has!

    The more I see and hear, the more I realise how screwed we are regardless of party branding, and it will only get worse.

  16. Leo G

    A real saving would be to feed every Federal employee through a woodchipper.A real saving would be to feed every Federal employee through a woodchipper.

    Unfortunately, such an alternative pay plan is likely to materially affect the government’s ability (sic) to attract and retain a well‑qualified Federal workforce. I suggest an amended plan that only woodchips the unproductive parts.

  17. cuckoo

    There are plenty of Democrat judges in Hawaii just waiting to put an injunction on this.

  18. Roger

    Josh is busily focused on the big issues.

    Like getting more women into parliament.

  19. Habib

    such an alternative pay plan is likely to materially affect the government’s ability (sic) to attract and retain a well‑qualified Federal workforce. In which spiral arm of what galaxy do these rare and elusive lifeforms exist?

  20. Terry

    While the non-payrise might not be a direct saving, the “encouragement” offered to disgruntled civil “servants” to leave and get a real job might lead to one.

  21. RobK

    …to leave and get a real job might lead to one.
    The downside being you are left with those that have no choice to leave. Still, a bit of a nudge is a good thing.

  22. .

    I’m waiting until we have a “temporary refund adjustment”.

  23. Terry

    “The downside being you are left with those that have no choice to leave.”

    This is true. A round of forced redundancies next year to “finish the job”.

  24. Confused Old Misfit

    Federal workforce.

    Is that not an oxymoron?

  25. JohnA

    zyconoclast #2806230, posted on August 31, 2018, at 11:21 am

    Swan-Save

    = Swan dive

    Or there is the Douglas Adams version (“Restaurant at the End of the Universe”) called the “sundive”
    “What,” said Trillian in a small quiet voice, “does sundive mean?”

    “It means,” said Marvin, “that the ship is going to dive into the sun. Sun … Dive. It’s very simple to understand. What do you expect if you steal Hotblack Desiato’s stunt ship?”

    “How do you know …” said Zaphod in a voice that would make a Vegan snow lizard feel chilly, “that this is Hotblack Desiato’s stuntship?”

    “Simple,” said Marvin, “I parked it for him.”

  26. Infidel Tiger 2.0 (Premium Content Subscribers Only)

    Josh is busily focused on the big issues.

    Like getting more women into parliament.

    Most of the “blokes” in the Liberal party already sit down to piss. Isn’t that enough?

  27. Robber Baron

    Josh has a whole department of PhD Keynesian economists to advise him, such a proposal would never reach him. And given what a mate of mine (who is a friend of Josh’s) tells me about Josh, he will ensure that no such proposal ever reaches him.

  28. Baldrick

    What we can expect from a Frydenberg Treasury …
    Increased taxes ✔
    Increased spending ✔
    Increased public service wages ✔
    Increased stupidity ✔

  29. David Brewer

    The other benefit is to drive entrepreneurial types into the private sector, where they might do some good.

    High public sector wages encourage people with bright ideas to waste public money testing them out. Most of them fail, but in the public sector the solution is not to stop. Instead the first reaction is to double-down – putting in more resources to make it work (think education “policy”). Many years later they may recognise a problem – but then they try to solve it with another bright idea, instead of just cancelling the first one.

  30. Tim Neilson

    And given what a mate of mine (who is a friend of Josh’s) tells me about Josh, he will ensure that no such proposal ever reaches him.

    Or at least that he will always be able to plausibly deny that it reached him.
    The primary role of staffers is to ensure that no-one can ever prove that any information has reached the minister in an unfiltered form.

  31. Squirrel

    Even with the (relative) restraint of the current federal government, we’ve had year after year of public sector wage growth out-stripping the private sector.

    Our new federal ministry could do worse than adopting the policy which applied under Hawke and Keating of putting a dollar limit on wage adjustments – so that lower level employees get whatever percentage increase has been agreed to, but above a certain salary level, everyone just gets the flat amount increase, rather than the percentage increase. A few years of wage compression for the higher levels really would not be out of place, given that a good number of them are paid as much more more than the ministers they serve and that we do, by the way, have a half trillion dollar plus federal debt.

  32. The Director of The Office and Budget Management Mick Mulvaney has already stated that various portfolios will be drastically changed, some will merge and others will be wiped out.
    Once these trade negotiations end, and the mid-terms pass, we will see some Yuugee changes in Federal Bureaucracy.
    Billions of $ will be saved and tens of thousands FIRED. Winnamins, take one daily.

  33. None

    Norman Church
    #2806291, posted on August 31, 2018 at 12:10 pm

    Well said, Norman.

  34. None

    Infidel Tiger 2.0 (Premium Content Subscribers Only)
    #2806489, posted on August 31, 2018 at 3:37 pm

    Indeed.

  35. None

    Baldrick
    #2806512, posted on August 31, 2018 at 4:06 pm

    I’d probably put money on that.

  36. Chris M

    Spartacus – still think Trump can’t govern?

  37. jupes

    Yes.

    Give yourself an uppercut you idiot.

  38. jupes

    Something for new Treasurer Frydenberg to consider.

    Frydenberg is an Australian politician. He is incapable of making decisions for himself.

    He will go with the recommendations of the tribunal that sets public service annual salary increases. And they increase every year at double the rate of the private sector.

  39. OldOzzie

    Bruce of Newcastle
    #2806222, posted on August 31, 2018 at 11:16 am

    Right now the job market in the US is hot. Unemployment claims this morning were again below the consensus estimate (213.0K vs 215.0K, from WSJ markets page).

    Trump’s timing is excellent: if the Left complains he can say that public servants can always leave – there are plenty of jobs in the private sector!

    Seeing that most of those public servants probably vote for the Democrats it’s a win-win too.

    The Liberals cannot understand that you can get rid of 50% of Federal ACT Public Servants – close down Education and Health for starters and the ACT Federal Public Servants will still not vote Liberal – what don’t the Liberals Get???

  40. Token

    The Director of The Office and Budget Management Mick Mulvaney

    Is there anyone in public life in Australia that holds a commitment to find ways to cut by any reasonable means similar to the Freedom caucus? Do we have a Mulvaney among us?

  41. Token

    The Liberals cannot understand that you can get rid of 50% of Federal ACT Public Servants – close down Education and Health for starters and the ACT Federal Public Servants will still not vote Liberal – what don’t the Liberals Get???

    People with little real life experience will follow the directions of “experts” to succeed.

    Most Labor-Lites ex staffer have as many”real world” skills as the average green or Labor ex staffer.

    The only “safe” way to “survive” is to follow the advice of the over paid “experts”. Imagine if they angered the bureaucracy, they would have to get a real job. No Labor-Lites ex staffer would want to suffer that indignity.

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