Coalition makes a start on smaller government
The government plans to axe 175 government agencies as part of new savings measures, which is in addition to the 76 closed following the May budget.
Finance Minister Mathias Cormann will announce the cuts alongside new rules to try to stop the creation of new agencies that clog the bureaucracy and slow down decisions.
“This will ensure that taxpayer funds are spent wisely and efficiently and not wasted inside departments,” Senator Cormann told The Weekend Australian.
Senator Cormann launched the first stages of a “smaller government program” in the May budget, closing down 76 agencies and starting the sale of Defence Housing Australia, the Royal Australian Mint and Australian Hearing.
The sale of Medibank Private recouped $5.7bn, about $1bn more than expected, and the health insurance company is now listed on the sharemarket.
Senator Cormann will announce the next phase of the program on Monday with the closure of 175 agencies, taking the total number of entities abolished to 251. The savings from the overall effort will reach $539.5m over four years.
“Our focus is on ensuring that the administration of government is as efficient and as effective as possible,” Senator Cormann said.
“This means a more streamlined, accountable and responsive public service, without unnecessary overlaps and duplication.”
The government’s broader strategy is to scale back the public service so that total staff numbers return to the levels seen in 2007, when Kevin Rudd took power and launched dozens of inquiries and reviews that set up new agencies.
Monday’s announcement will note that salaries for public servants have grown 42 per cent over the past decade compared with inflation of 28 per cent.
There is no official estimate of the number of jobs to be cut by scrapping or merging agencies, but a “bonfire of the quangos” in Britain in recent years was estimated to save £2.5bn over five years.
Senator Cormann sees the Australian exercise as a similar way to eradicate “quasi-autonomous non-governmental organisations”.
Right policies work
The new cap on benefits payments for the unemployed has forced thousands of people to find work instead of living off the state, new research will reveal this week.
Four detailed studies from the Department for Work and Pensions (DWP) will deliver the most comprehensive evidence so far that the benefits cap is encouraging people to move off welfare and into jobs.
The households that have lost the most in benefits payments since the cap was introduced in April 2013 are the most likely to have begun working for a living, the research concludes.
Claimants who saw their benefits cut by £200 a week or more were three times as likely to have found work after a year as households whose benefits were not affected, the findings suggest.
Iain Duncan Smith, the Work and Pensions Secretary, said the evidence showed the Conservatives were right to plan to cut the benefits cap further.
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04 Oct 2014Cutting benefits is vital for economy, says Iain Duncan Smith
10 Aug 2014The policy is designed to ensure that people cannot earn more than the average working salary from state benefits.
It sets a rate of no more than £500 a week in total benefits payments for couples and families, equivalent to £26,000 a year. The cap is set at £350 for single people.
George Osborne has announced plans to reduce the level of the cap further, to £23,000 a year, after the election.
It has been rumoured that the coalition is planning a raft of new policies to take to the next election .
The centrepiece is rumoured to be a rise in the State Pension to 30,000 per individual with no disadvantage for married couples.
This is seen as to be a temporary expense as a superannuation overhaul to ensure those today aged 30 or younger will be self funding will also be presented.
The cost involved will be paid for by the removal of family tax credits, bulk billing to be means tested and the closure of federal govt depts. that duplicate the States .
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