Dutton’s enthusiasm for DOGE is just old tricks with a new name

Finding efficiency savings inside the sprawling federal public service has been the go-to “painless” budget message of politicians for a generation.

Since the mid-1980s, every government and opposition has promised they can save money by making the bureaucracy more efficient.

It could be cutting the number of public servants, as Peter Dutton is promising, or slashing use of consultancies, a program Prime Minister Anthony Albanese has overseen since coming to office.

Elon Musk, Peter Dutton and Jacinta Nampijinpa Price. Governments and oppositions have always promised to slice the public service to make budget savings.Credit: Aresna Villanueva

Dutton has just given Senator Jacinta Nampijinpa Price a new portfolio responsibility of “government efficiency”.

The Liberal leader says the position, which would work out of the Department of Prime Minister and Cabinet, was created to “understand where there is waste and where we can make savings”.

Dutton has tied the efficiency drive to the sharp increase in public servants on Albanese’s watch. There are 185,343 public servants funded by taxpayers compared to 159,469 just after Labor took office in 2022.

“That’s money that we could be spending elsewhere to provide support to people during Labor’s cost-of-living crisis or into Defence or into security and into priorities for Australians otherwise,” Dutton said at the weekend.

Business leaders often argue that taxes could be lowered if only government were more efficient. This is the mantra of tech billionaire Elon Musk, who is heading US President Donald Trump’s new Department of Government Efficiency (DOGE).

A business leader can cut staff or services knowing they’re probably safe to keep their job if things go awry. If the changes upset customers (or staff), they can go elsewhere.

A government’s job, however, is to provide services to all. Taxpayers can’t go somewhere else for their age pension cheque or the Defence Force or a hospital emergency ward.

This issue has come to the fore recently in the Veterans’ Affairs Department. When Labor came to office, there were 2346 public servants in the department plus almost 1000 labour-hire workers. There was also a backlog of 66,000 compensation claims.

Veterans described the Morrison government’s management of the sector as “delay, deny, die”.

Today, there are 3653 public servants in Veterans’ Affairs. Labour hire has all but disappeared, as has the backlog of compensation claims awaiting analysis.

Finance Minister Katy Gallagher on Monday used Veterans’ Affairs as an example of what happens if governments cut staff and services.

“I would say to Peter Dutton, go and speak to a veteran who actually is getting their pension now, who’s getting their appropriate payment,” she said.

In some areas, there’s a bipartisan approach to more public servants.

The Australian Submarine Agency, created last year to oversee the huge AUKUS submarine program, has 542 public servants, in part to ensure taxpayers get value for money from Australia’s largest Defence acquisition.

The size of the public service doesn’t mean it works efficiently.

Since the Hawke government in 1987, administrations and oppositions have promised to cut government spending through a public sector efficiency dividend. Rather than a department or agency budget being increased every year, it has to find a set saving – usually as a percentage of its total budget.

Josh Frydenberg went to the 2022 election promising a 2 per cent efficiency dividend on the public sector.Credit: Alex Ellinghausen

In 2008, then-treasurer Wayne Swan used his first budget to impose an extra 2 per cent efficiency dividend on government departments to save $2 billion.

Fourteen years later, former treasurer Josh Frydenberg promised taxpayers he would save $2 billion by increasing the efficiency dividend, which was then 1.5 per cent, to 2 per cent.

Shadow treasurer Angus Taylor will almost certainly reheat that policy as part of the Coalition’s overall “efficiency” drive.

The government already imposes a 1 per cent efficiency dividend across the public service.

But like cutting staff, the efficiency dividend can create perverse outcomes.

The previous government had to throw tens of millions of dollars at the National Archives after it revealed in 2021 that irreplaceable documents – such as audio recordings of former prime minister John Curtin and Defence personnel files from the 1920s and 1930s – were turning to dust.

The same government pumped an extra $145 million into the Australian Prudential Regulation Authority after the 2019 banking royal commission found it had not been adequately funded.

There’s more scope for efficiencies in the two largest agencies – Services Australia and the Australian Taxation Office – which employ 30 per cent of all public servants. One is the biggest spending ($241 billion went through Services Australia last year) while the other collects the tax that runs the government.

Less expensive tax collection (for instance, axing annual tax returns) or a greatly expanded use of artificial intelligence to get payments to people more cheaply would deliver on the promise of a more efficient government.

But that sort of efficiency doesn’t quite work in a 10-second election ad compared to a promise to axe thousands of public servants or consultants.

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