Jennifer Doggett, the author of our new paper, ‘Beyond the Blunt Instrument: the Efficiency Dividend and its alternatives’ writes about her findings in the Public Sector Informant in the Canberra Times.
After 20 years of arbitrary budget cuts, the bureaucracy is effectively eating itself. Jennifer illustrates what’s wrong with the Efficiency Dividend:
“As anyone who has tried budgeting knows, there is a limit to the effectiveness of most cost-cutting measures. People who buy expensive take-away food for their work lunches will find it relatively easy to save money by bringing food from home instead. However, those already taking homemade sandwiches every day will struggle to reduce their spending further and still provide nutritious lunches.
After 20 years of the Efficiency Dividend, the public service is now at the ‘vegemite sandwich’ stage of budgeting. Spending has been cut back to the point at which Departments now need to reduce core functions in order to deliver ongoing savings.”
“As two parliamentary inquiries into this policy have demonstrated, smaller agencies and those with a central policy function are particularly hard hit as they find it more difficult to undertake the ‘creative accounting’ required to meet savings targets.
For example, one practice, reported by public sector employees consulted as part of the Centre for Policy Development’s research, is for organisations to artificially inflate the budgets of new policy proposals (exempt from the Efficiency Dividend) in order to offset the savings required elsewhere.”
You can download a PDF of Jennifer Doggett’s full article here.