‘Can’t keep giving money’: Government looks at extra five per cent budget cuts

Here's a detailed summary of the YouTube video transcript, maintaining the original language and technical precision:

Key Concepts

• Efficiency Dividend: A recurring percentage reduction in departmental budgets, typically applied annually.
• Australian Public Service (APS): The federal public service of Australia.
• Average Staffing Level (ASL): A measure of the number of full-time equivalent employees in a department.
• Budget Deficit: When government spending exceeds government revenue.
• National Disability Insurance Scheme (NDIS): Australia's scheme to support people with permanent and significant disability.
• Primary Care: The first point of contact for individuals seeking healthcare services.
• Age Care: Services and support for older Australians.
• Environmental Protection and Biodiversity Conservation Act (EPBC Act): Commonwealth legislation that provides a legal framework to protect the environment and heritage.
• Environmental Protection Agency (EPA): An agency responsible for environmental protection.
• Rebates: Payments made by the government to individuals or households, often to offset costs.
• Knack (National Anti-Corruption Commission): Australia's federal anti-corruption commission.

Departmental Savings and Budgetary Pressures

The discussion begins with a report that the head of department has written to cabinet ministers and heads of department suggesting they find up to 5% in savings, in addition to the existing 1% efficiency dividend. The Minister clarifies that this is not an exercise in cutting 5% but rather a process to encourage departments to re-prioritize within their existing budgets. The rationale is that many ministers and departments request more funding, and at some point, it's necessary to ask them to examine their current activities and reallocate resources. Departments were asked to identify 5% of their lowest priority work to ensure they are considering existing commitments when requesting additional funds.

Key Points:

• 5% Savings Suggestion: A directive to identify potential savings, not a mandated cut.
• Purpose: To encourage re-prioritization and responsible resource allocation within existing budgets.
• Context: Acknowledgment of numerous requests for increased funding across departments.
• Mechanism: Departments asked to identify 5% of their lowest priority work.

Election Commitments and Existing Savings

The Minister contrasts the current approach with election campaign promises. During the election, the government committed to reducing the Australian Public Service (APS) by $6.4 billion, primarily by targeting non-staff related costs such as consultants, contractors, and travel. The Minister states that since coming to government, they have already found $100 billion in savings and re-prioritization across the APS. The current exercise is framed as ensuring every dollar counts, especially given the significant stress on the budget.

Key Points:

• Election Commitment: $6.4 billion reduction in APS, focused on non-staff costs.
• Actual Savings Achieved: $100 billion in savings and re-prioritization since 2022.
• Motivation: Budgetary stress and the need for fiscal responsibility.

Public Service Size and Redundancies

When questioned about potential public service redundancies resulting from budget processes, the Minister reiterates their view that the public service is "roughly the right size." They acknowledge that there will be "ups and downs" across departments due to program endings or changes in departmental focus, which can affect Average Staffing Levels (ASL). However, they expect the overall size of the APS to remain largely the same. The Minister explicitly states that the 5% savings exercise is not about job losses.

Key Points:

• Public Service Size: Considered "roughly the right size."
• Fluctuations: Acknowledged due to program changes and departmental shifts.
• No Mandated Job Losses: The 5% savings exercise is not intended to cause redundancies.
• Overall APS Size: Expected to remain largely consistent.

Mid-Year Economic Outlook and Budget Deficit

Regarding the upcoming mid-year economic outlook, the Minister indicates that decisions are being finalized. This outlook will not be a "mini budget" but will focus on delivering election commitments and addressing urgent pressures that cannot wait until May. The Minister acknowledges a reported budget deficit of $32.9 billion as of October and states that the government is tracking monthly results, noting a slight improvement in October's figures compared to forecasts. The overall budget is in deficit, with pressures in the order of $30 billion, and the government is working to improve this.

Key Points:

• Mid-Year Economic Outlook: To be released in a few weeks, focusing on election commitments and urgent pressures.
• Budget Deficit: Tracking around $30 billion, with October showing a slight improvement.
• Government Action: Working to improve the deficit situation.

Hospitals, NDIS, and Primary Care

The discussion shifts to the importance of the hospitals and NDIS deals with the states, especially given the budgetary pressures. The government is engaged in "intense negotiations" across the board. Health is a significant priority, and the government aims to secure a good deal for hospitals while also funding primary care and age care, which are substantial budget pressures. The Minister argues that well-functioning primary and age care systems can alleviate pressure on hospitals. Regarding the NDIS, the government has managed to reduce its growth rate from 22% to just over 10%. However, further work is needed to manage its growth, as it remains a significant budget pressure.

Key Points:

• Negotiations: Intense negotiations ongoing for hospitals and NDIS deals with states.
• Priorities: Hospitals, primary care, and age care are key areas of focus.
• Interrelation: Effective primary and age care can benefit the hospital system.
• NDIS Growth: Reduced from 22% to just over 10%, but still a budget pressure.

Thriving Kids Initiative

The "Thriving Kids" initiative is discussed as a crucial component for rebalancing the system. The goal is to enable more children to receive support outside of the NDIS, particularly those under five, by rebuilding the early intervention programs that existed before the NDIS. The Minister highlights that many of these services have disappeared since the NDIS became the primary pathway for support. The Commonwealth will contribute through existing programs, but collaboration with states is ideal to re-establish this system.

Key Points:

• Objective: To reduce reliance on the NDIS for early intervention.
• Mechanism: Rebuilding pre-NDIS early intervention programs.
• Target Group: Children, especially under five.
• Collaboration: Commonwealth and state cooperation is sought.

Environmental Laws and Business Concerns

Concerns are raised about the new environmental laws and their impact on business, specifically regarding the difficulty of removing the EPA CEO. The Minister asserts that powers exist to remove the head of the EPA if grounds are established, similar to other independent office holders. They acknowledge disagreements regarding the balance of power between the minister and independent bodies but assure that an EPA commissioner not performing their duties will not continue in their role.

Key Points:

• EPA CEO Removal: Powers exist to remove the EPA head under specific grounds.
• Ministerial vs. Independent Power: Acknowledged area of discussion, but performance is key.
• Assurance: Incompetent EPA commissioners will not remain in their positions.

Concessions to Greens and Fast-Tracked Approvals

The Minister addresses concessions made to the Greens on coal, gas, and forestry, and the introduction of a two-tiered system for fast-tracked approvals. Regarding forestry, the Minister states that the aim is to treat it like any other industry, with native and plantation forests meeting national environmental standards. Investment is being provided to support the adjustment of these new arrangements and to support jobs in Tasmania and New South Wales. On fast-tracking, the Minister argues that the existing EPBC Act was not working for anyone and that the new legislation will speed up assessment pathways, benefiting businesses.

Key Points:

• Forestry: Treated as any other industry, with support for adjustment and jobs.
• Fast-Tracked Approvals: Aimed at speeding up assessment processes for business.
• EPBC Act Reform: Universal agreement that the previous act was ineffective.
• Credit: Murray Watt is credited for getting the bill through.

Energy Prices and Rebates

The potential for rising energy prices due to the transition is discussed, and whether the government will continue energy rebates. The Minister states that rebates were never intended to be permanent features of the budget and that decisions are made on a budget-by-budget basis. The government remains committed to helping households through the transition, citing programs like the batteries program as an example of ongoing support.

Key Points:

• Rebates: Not a permanent feature; decisions are budget-dependent.
• Household Support: Commitment to assist households through the energy transition.
• Examples of Support: Batteries program mentioned as successful.

Britney Higgins Case

The Minister is asked about the Britney Higgins case and their connection to it, particularly concerning court actions involving former staff of Fiona Brown and Linda Reynolds. The Minister states that due to ongoing matters for both Ms. Brown and Ms. Reynolds, they are not in a position to add further comment. Regarding the compensation payment to Britney Higgins, the Minister notes that the matter was referred to the National Anti-Corruption Commission (NACC), which is the appropriate body to make decisions on such issues. The NACC has made decisions on at least one of those matters.

Key Points:

• Brittany Higgins Case: Minister unable to comment due to ongoing court matters involving Ms. Brown and Ms. Reynolds.
• Compensation Payment: Referred to the NACC for decision-making.
• NACC Role: Confirmed as the appropriate body for such investigations.