Public sector staffing and resourcing


Budget Review 2021–22 Index

Philip Hamilton

New agencies

The National Drought and North Queensland Flood Response and Recovery Agency has been renamed as the National Recovery and Resilience Agency (NRRA), incorporating activities transferred from agencies including the National Bushfire Response Agency, the Department of the Prime Minister and Cabinet (PMC), the Department of Home Affairs (HA), and the Department of Agriculture, Water and the Environment (pp. 34, 35, 164). Separating the Government’s response and recovery functions, Emergency Management Australia (in the HA portfolio) will co-ordinate responses to national emergencies, and the NRRA (PMC portfolio) will ‘lead resilience to and recovery from hazards and disasters’ (p. 65). In addition, the Australian Climate Service (ACS) will be established to ‘transform the Commonwealth’s capacity to anticipate and prepare for more extreme weather events due to a changing climate, and inform risk reduction and resilience investments’ (Budget Paper No. 2, pp. 6–7, 65–66).

In contrast to pre-COVID budgets, this year’s Budget does not include initiatives for the decentralisation of public service agencies.

Staffing

When discussing public sector employees, budget papers use Average Staffing Level (ASL), a method of counting that adjusts for casual and part-time staff in order to show the average number of full-time equivalent employees. ASL is almost always a lower figure than a headcount of actual employees, which is the method of counting staff used by the Australian Public Service Commission (APSC).

Prior to the pandemic

In the 2015–16 Budget, the Government undertook to maintain the size of the general government sector (GGS), excluding military and reserves, at around or below the 2006–07 ASL of 167,596 (p. 166). Critics, notably the Opposition and the main public sector union, refer to this policy objective as the ASL cap or the staff cap. In October 2020, the Government reported that ASL had been maintained at around or below the 2006–07 level over the years prior to the COVID-19 pandemic, but foreshadowed that ‘significant ASL increases will occur in a number of portfolios in 2020–21 … However much of this additional ASL is temporary, reflecting the nature of the response to COVID-19’ (p. 18).

Budget 2021–22

The Budget foreshadows that the 2021–22 ASL estimate will increase to 174,276 (5,364 above the updated estimate for 2020–21), and that ‘sustainment of some of this additional ASL will continue to be required over much of the forward estimates’ (p. 14). The Budget papers also indicate that the size of the public service workforce will continue to grow into the future (Budget Paper No. 4, p. 14–15):

ASL increases in the short term reflect major efforts to address an unusual convergence of health, economic and social challenges.

…

[I]t is expected that over the medium and longer term there will be modest underlying ASL growth as Australia recovers its equilibrium and gets back to normal rates of economic and population growth. [emphasis added]

The list of policy objectives that necessitate ASL increases in a range of portfolios in the short term includes:

  • a New Employment Services Model to replace the jobactive program
  • the COVID-19 vaccination program
  • the response to the Royal Commission into Aged Care Quality and Safety
  • the Royal Commission into Defence and Veteran Suicide and related initiatives
  • reform of the mental health system
  • initiatives to reduce violence against women and children and
  • the ACS and the NRRA (pp. 13–14).

The main public sector union welcomed the increase of 5,364 positions, but observed that ‘this restores less than half of the over 13,000 jobs that the Government have cut since they took power’. The union also highlighted the size of the public service’s labour hire workforce (which is not counted in ASL or in the APSC’s headcount):

Tonight, was a huge missed opportunity to offer certainty to the 25,000 labour hire workers who serve the public via expensive and ineffective labour hire contract arrangements. The Government should have dealt with this problem by cutting out the expensive private companies and delivered better services with more employees at the same cost.

In 2018 it was reported that, since the change of government in 2013, spending on contract labour hire and consultancies had doubled to $730.0 million (more recent figures are not publicly available). Commentators such as Helen Sullivan (Director, ANU Crawford School of Public Policy) and Terry Moran (former secretary of the Department of Prime Minister and Cabinet) suggested that this increase, along with the ASL cap, deskills public service agencies. However, in March 2018 the Government argued that ‘the overall cost of government administration continues to fall as a proportion of overall government expenditure’.

Digital capabilities

The Government has observed that ‘continued investment in digital capabilities will support further ASL prioritisation in future years’ (p. 15). Two significant budget measures are (p. 75):

$421.6 million over two years from 2021–22 (and $38.7 million in capital funding) to continue the My Health Record system and funding for the Australian Digital Health Agency, including for the Intergovernmental Agreement on National Digital Health.

$200.1 million over two years from 2021–22 (including $54.0 million in capital funding) to develop and transition government services to a new, enhanced myGov platform, providing a central place for Australians to find information and services online.

A Beta trial of myGov commenced in September 2020. The beta.my.gov.au website enables the Digital Transformation Agency to ‘test new features and ideas [with] more features and services … added over time’.

The Budget allocates $16.5 million over four years from 2021–22 and $0.2 million per year ongoing to ‘identify Australian Government data assets and establish a searchable data catalogue’ (p. 74). It is not clear which agency is allocated this funding, or how this measure relates to data.gov.au, the ‘central source of Australian open government data’. A webpage of the interim National Data Commissioner explains the difference between a data inventory, register, catalogue and repository.

Additional technology-related measures and projects are listed in an article by an ICT trade publication.

Former deputy secretary of the Department of Finance, Stephen Bartos, has observed that many of the digital capability projects are discussed in the context of the Government’s deregulation agenda, which includes ongoing review to ensure that settings are fit-for-purpose, and ‘removing regulation if it ceases to be necessary, and streamlining and harmonising regulations across jurisdictions’ (p. 6). However, Bartos also observes that ‘rather than less regulation, the agenda is mainly about reducing the burden of regulation by making it more digital. The implication for public servants is that they can continue to regulate, provided they do it digitally’.

Whole-of-government shared enterprise resource planning (GovERP)

As outlined in a February 2020 AusTender notice, a whole-of-government shared enterprise resource planning solution (GovERP) is part of the Government’s Shared Services Program, which aims to:

… consolidate, standardise and automate the delivery of core transactional corporate services across non-corporate Commonwealth entities … The Department of Finance is working with the Shared Services Provider Hubs to co-design a new GovERP initiative [that] comprises the design, development and trial of a common whole-of-government platform, which will deliver a range of standardised corporate and financial services.

The 2020–21 Budget identified $35.6 million for the Department of Finance for GovERP (p. 85). The 2021–22 Budget aims to progress the GovERP project by providing unspecified funding (due to commercial sensitivities) to Finance and Services Australia (over two years from 2021–22) and the ATO and the Department of Industry, Science, Energy and Resources (in 2021–22 only). Finance’s Service Delivery Office and its 14 client agencies will comprise the first phase of implementation (Budget Paper No. 2, pp. 76­–77).

Although the concept of shared services suggests that savings and efficiencies are likely to be available, in an audit that examined the delivery of HR services by hubs in 2018–19, the Auditor-General noted that ‘in the absence of available benchmarking data, it is difficult for entities to determine what efficiencies have been gained from engaging in shared services arrangements’ (p. 49). The Auditor-General noted that Finance had observed ‘a lack of consistent data on the cost and quality of current corporate activities, and variation in costing methodologies’ and that Finance is ‘working with agencies to improve the benchmarking exercise and accuracy of data’ (p. 45).

Cybersecurity, and fraud prevention

Since 2013, a series of reports by the Auditor-General have identified inadequacies in agencies’ implementation of cybersecurity risk mitigation strategies. In August 2020, Australia’s cyber security strategy 2020 foreshadowed ‘secure hubs’ for government agencies, to ‘reduce opportunities for malicious actors to target smaller agencies with less secure IT’ (p. 40). The Budget commits $18.8 million in 2021–22 to ‘pilot centralised delivery of cyber capabilities and services for government agencies through Whole-of-Government cyber hubs with costs to be partially met from within the existing resources of the Department of Defence, the Australian Signals Directorate and Services Australia’ (p. 76).

The Budget commits $13.2 million over four years from 2021–22 for the Attorney-General’s Department and the Australian Institute of Criminology to ‘continue the operation of the Commonwealth Fraud Prevention Centre in developing a coordinated whole-of-government approach to addressing fraud vulnerabilities in Commonwealth programs’ (p. 64).

Efficiency Dividend

Since 1987–88 the Australian Government has applied an Efficiency Dividend (ED) to ‘departmental’ (operating) expenses of Australian Government agencies, reducing funding to account for increased public sector productivity over time. The ED reduces the base departmental funding of agencies by the ED rate prior to the addition of any new measures. The ED rate has varied to some degree over the years, but has been most frequently applied at a rate of either 1.00 or 1.25%. Over time, various agencies have been fully or partially exempted from the base and/or one-off rates.

The ED rate is not always explicitly stated in the Budget because, rather than being a budget measure, the ED is a factor determined and applied by the Government in the course of developing the Budget. The ED is not discussed in the 2021–22 budget papers, nor was it mentioned in the 2020–21 budget papers.

The most recent coverage of the ED was in the Mid-Year Economic and Fiscal Outlook 2019–20 (MYEFO) of December 2019, which noted:

the Government will achieve savings of $1.5 billion over four years by maintaining the Efficiency Dividend (ED) at the 2018–19 level of 2.0 per cent for two additional years (2019–20 and 2020–21), stepping down to 1.5 per cent in 2021–22 and returning to the base rate of 1.0 per cent from 1 July 2022.

The 2019–20 MYEFO also noted ED exemptions for several specific agencies, national collecting institutions, and agencies with an ASL of less than 200.