Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I would not say that there were any applications per se but, as you would expect, there were one or two instances—probably fewer than I expected—where individual departments or agencies indicated that they felt that this was going to put considerable pressure on them. In fact, there has probably been a number of instances where communication has come back to me informally either by colleagues or through my department indicating that they felt this might cause them some difficulty. To the best of my recollection, there was no formal application, no formal proposal, brought to the Expenditure Review Committee as such.

It is hardly a great secret that the imposition of a one-off efficiency dividend is going to cause a degree of tension, shall we say, because you have got, inevitably, people with existing arrangements being asked to dig deep to find greater efficiencies. That will be easier in some departments and agencies than in others. But we felt it was necessary, as an important savings measure in order to strengthen the position of the overall budget surplus, to put downward pressure on inflation and interest rates and also to help to push back against what had been a very substantial blow-out in spending, particularly the total head count in the Public Service under the previous government. We had seen the numbers in the overall public sector rise quite substantially and well in advance of overall employment in the Australian economy since around 2000-01, particularly at the SES level, which rose by something like 44 per cent in that period of about six or seven years. We felt it was entirely appropriate to put that one-off efficiency dividend in place.

The honourable member is probably aware that there are a limited number of exemptions from the efficiency dividend. Most of the defence department is exempted—not all, but most. There are one or two other agencies with relatively specialised functions that are exempt. We have maintained those exemptions. We applied our one-off efficiency dividend on the existing efficiency dividend base, which of course we inherited from the previous government, and we do not challenge or criticise that, but we did not change the base of exemptions.

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