Mathias Cormann (WA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Administration, Senator Minchin. Will the minister inform the Senate of the importance of maintaining efficiency in government administration? Is the minister aware of proposals to create a number of new bureaucracies and conduct reviews and inquiries? What are the implications of such proposals for the level of government spending?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I thank Senator Cormann for that question. It is indeed the fact that one of the most important principles in running the federal budget is to ensure that departmental running costs are kept at a minimum so that taxpayers’ money is spent where it should be—on the services we deliver to the Australian people. At the last election, the coalition promised to increase the annual efficiency dividend on government departments from one per cent to 1.25 per cent. That measure, fully implemented, has saved taxpayers over $280 million in departmental running costs in the three years since the last election.

By contrast, and in response to Senator Cormann’s question, I note that the Australian Labor Party have promised an explosion in government bureaucracy, with 67 new departments, agencies, committees and task forces, and no less than 96 reviews and inquiries. Obviously, that will add enormously to the cost of merely running the federal government, let alone the business of actually delivering programs and services. Of course, the Labor Party have not told us how much this great new empire of theirs is actually going to cost or how it would be paid for. As usual with Mr Rudd, the detail is left to another day.

What is even more audacious is that Labor frontbenchers keep telling us they have identified a great pool of savings to pay for all of this great new bureaucracy. Of course, in reality, of the claimed $3 billion in savings over four years—that is, less than $1 billion a year, which is their claim—at least $2 billion of that is either completely spurious or lacks any explanation as to how they would achieve it or where it would come from.

It is particularly laughable in light of this expanding bureaucracy that they propose. They claim they would save money on consultancies, but they are setting up 96 new reviews and inquiries. Who on earth is going to conduct all of these reviews? If it is not the consultants, because they are going to save money on consultants, I suppose they are going to be hiring additional full-time staff to perform them. How much will that cost? They say they will save money by abolishing Work Choices, but they do not mention that they want to set up Fair Work Australia, a number of job protection authorities, an office of work and family, as well as conduct reviews into subjects ranging from the Job Network to Work for the Dole for artists. We are going to review that, Mr President!

Labor have claimed a saving from cutting the budget of the Department of Foreign Affairs, but they do not say how they are going to pay for their new Canberra commission, their new WTO working group, the Africa-Australia council, the Pacific climate change centre or the regional disaster management coordination authority, not to mention the cost of nine reviews of everything from AusAID to the diplomatic service to a review of our further integration with New Zealand, which we look forward to. The Labor savings do not add up, because they do not understand that you cannot reduce spending if you are going around expanding the size of government, as they propose.

Despite the incoherence of that position, they continue to cling to the notion that they are going to produce savings. Mr Rudd said that the cost of the new bureaucracy will be met from these mythical savings, but Wayne Swan has already said that those same savings, this new magic pudding of Labor’s, will pay for their education promises. Lindsay Tanner says that the same magic pudding will pay for Labor’s skills and infrastructure commitments. Last night, Nicola Roxon claimed on The 7.30 Report that this same mythical magic pudding of savings would fund the $2 billion in new spending on health. They think that if you can just assert these savings, you can use the same pool of savings several times over to fund every conceivable election commitment, including a massive new bureaucracy. You cannot run a trillion-dollar economy or a $230 billion budget with this nonsensical approach to government.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Senator Chris Evans interjecting—

Alan Ferguson (President) Share this | Link to this | Hansard source

Order! Your colleague is waiting to ask a question, Senator Evans.