Treasurer Scott Morrison suggests public service spending will be cut in next week’s Federal Budget

TREASURER Scott Morrison has given his strongest warning yet that public service spending will be cut in next week’s Federal Budget.

Treasurer Scott Morrison and Minister for Small Business and Assistant Treasurer Kelly OÕDwyer holding a joint press conference, at Parliament House in Canberra. Picture Kym Smith

SCOTT Morrison isn’t ruling out cutting public sector spending to pay for income tax relief, amid reports another public service efficiency dividend is part of his Budget plans.

It was reported yesterday Mr Morrison, who will hand down the Budget next week, was planning to hit the Australian Public Service with further efficiency measures to fund a tax cut to curb bracket creep.

Speaking to the media today, Mr Morrison hinted the public sector would be required to rein in spending.

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“Out there in the economy today businesses are being told that they need to produce the same quality of a product to be competitive in the market and they need to do it for less,” he said.

“That is what they’re being told and they are responding to that challenge and they are ensuring that their products and the quality of their services keeping up to the market and indeed exceeding the mark and that is why they’re succeeding.

“Now, government should not be given a leave pass from having to drive the sort of innovation in its own operations to deliver the same sorts of things that businesses and employees around the country are being asked to do and is has been a key driving thought and principle.

“A practical principle that is driving our thoughts and our preparation of this Budget.”

Mr Morrison said the government had devised a set of “clear rules” for preparing the Budget, which included tax breaks for those “creating jobs and earning.”

“Don’t spend more than you save,” he told 2GB radio.

“And if you are closing down, which we will, loopholes and things like that for concessions that, you know, weren’t there to be used (in) the way they are, the more revenue you get from that then you try and ensure that the rest of the economy, particularly those that are out there creating jobs and earning pay less tax.”

Originally published as Treasurer Scott Morrison suggests public service spending will be cut in next week’s Federal Budget