Savings slip highlights unanswered questions in Silver review response

Victorian Premier Jacinta Allan. Picture : NewsWire/Ian Currie

An error in the government’s initial media release on its long-awaited cost-cutting review was quickly identified by several journalists, but went unnoticed by officials responsible for implementing the overhaul of Victoria’s public service.

Helen Silver’s review, released by Premier Jacinta Allan and Treasurer Jaclyn Symes on Thursday, recommended reducing the number of public entities and boards by 78. The government has opted to cut 29. Yet the media release initially claimed that this more modest action would still produce $427m in savings over four years, the same amount generated by the full suite of mergers and abolitions recommended in the review.

Symes later confirmed the true saving is just $27m, conceding an error was made.

Taken alone, it may be the kind of mistake that occasionally occurs in government communications and media reporting but it has highlighted a broader challenge: the government has not yet published a detailed, line-by-line explanation of how it will reach $4bn in savings over four years, only $1bn short of what the full Silver recommendations were expected to deliver.

Because several of Silver’s most substantial proposals have been rejected, including consolidating 14 water corporations into three, questions remain about the construction of the $4bn figure and whether the surviving measures are sufficient to meet it.

Given the review has been in government hands since June, greater clarity might reasonably have been expected, particularly around how it plans to reduce 90 per cent of 90 advisory committees and unwind numerous overlapping boards.

There is also the question of whether $4bn or even $5bn – only modestly more than previous efficiency dividends – is enough to make a measurable difference as net debt tracks towards $200bn by the end of the decade.

And the fact that this bloated bureaucracy has occurred on Labor’s watch: public sector employee expenses have more than doubled from $18bn in 2013-14 before Labor came to power to about $38bn now.

One of the most complex tasks ahead arises from Silver’s finding that Victoria is directly funding services – especially in primary health – that the commonwealth pays for elsewhere. The review proposed winding back several of these programs. The government has instead chosen to retain them and seek additional federal support, setting up delicate negotiations with the Albanese government.

For new Liberal leader Jess Wilson, the review presents both opportunity and risk: a platform to argue for deeper structural reform, but also recommendations Labor can use to support claims that the Coalition would cut frontline services.

If the government cannot show precisely where every dollar of its promised savings will come from, the media release error may come to represent something larger: a widening credibility gap on budget management.