The cost of running the Federal Government is an important issue for One Nation. We believe that a smaller government is better and strongly advocate for reducing its size to align with the constitution.
I’m an avid reader of the budget volume that lists out the cost of Government. This year, the figures don’t add up. The budget appears to be assuming there will be no increase in the cost of Government for the next four years.
In a period of high inflation, which will be at least 13% over forward estimates, an assumption that the Federal Government administration cost (wages, office expenses, etc.) will not go up in those four years is, at best, improbable and at worst, dishonest.
I asked the Finance Minister, Katy Gallagher to “please explain”. Aside from small savings from reducing the use of contract labour, there are no explanations for the figures presented in the budget. The outcome is that the deficit over the forward estimates is more than likely understated by as much as $50 billion.
Transcript
My question is to the Minister for Finance, Senator Gallagher, and will reference Budget Paper No. 4: Agency resourcing, page 186, department expenses table. The government has been conducting a program of reducing spending on external providers—contractors; consultants—and hiring employees directly instead, to perform those duties, and One Nation supports that. These conversions, from external providers to employees, save taxpayers money, being the difference between paying a public servant to do that work and paying a consultant, partly balanced out by the increased costs of office expenses, travel and so on. Minister, how much has this program saved in 2023-24, and how much will it save over forward estimates? I note that, as I understand, the budget papers have another 2,502 conversions projected.
Senator GALLAGHER: Thank you for asking me a question about Budget Paper No. 4. That is the budget paper that Finance has responsibility for. We have worked hard to make conversions, as you say, and to reinvest and put increased capability into the Public Service. What we did find out from the audit on employment was that the real size of the APS when we came to government was much larger than had been publicly reported, so we are taking steps to rebalance it and to put public servants into jobs that labour hire had done.
In the last budget, I think the savings were in the order of $800 million in terms of the conversions that were being made. In this budget we’re finding a further billion dollars in reductions to agencies’ departmental expenses because of the investments we’re making in the Public Service. Obviously, we are making additional investments in the Public Service for additional responsibilities that they have, but what we’re doing is painting a very honest picture of the price of delivering improved services.
Those opposite, I know, are going to do what they always do and say they want a smaller Public Service, but they should then explain why 41,000 veterans who didn’t have their claims allocated now have their claims allocated and now are getting access to pensions. It’s a direct result of our investment in the Australian federal Public Service. We weren’t seeing those results, whether it was in Immigration, DFAT, Services Australia or Veterans’ Affairs. We see that on the payments side now because veterans are getting access because they are being dealt with. Because they’ve got public servants dealing with their claims, they are getting access to the money that they deserve.
So it’s a piece of ongoing work, Senator Roberts. If there’s further information I can provide to you, I will. But we are finding savings from the program at the same time that we’re making additional investments.
The PRESIDENT: Senator Roberts, first supplementary?
Senator ROBERTS: The table shows many departments costing less to run in 2027-28 than they do today, despite ongoing inflation, and rents, electricity and expenses far exceeding the savings from operations. The department of infrastructure is down from $554 million in this budget to $452 million in 2027-28; Health and Aged Care, $1.6 billion down to $1.1 billion; and Services Australia, $5.7 billion down to $4.5 billion. Minister, please explain from where these huge claimed projected savings will come.
Senator GALLAGHER: In terms of the savings that we’ve applied through this budget, it’s an extra billion dollars onto the $3 billion that we had built into the budget, so that gives you a total of $4 billion. There are additional savings that come through the conversions of expensive labour hire into permanent Public Service work, and so that is part of it. I think it’s probably a question we can go through at estimates, as well, because I don’t have that page in front of me. But there are savings, and we take that money from departments; they don’t get that funding. So that is a saving that is realised at the time that that budget decision is taken.
The PRESIDENT: Senator Roberts, second supplementary?
Senator ROBERTS: The $155 billion provided in the budget as departmental expenses in 2024-25 is projected to grow to $169 billion in 2027-28 almost entirely from increases in defence and the NDIS. How could your forward projections show flat or reduced costs for, in effect, the entire government except the NDIS and defence, when the budget puts inflation over that period at 13 per cent? Does your budget dramatically understate projected deficits?
Senator GALLAGHER: No. The budget papers, as they’re released—Budget Paper No.1, which goes to providing the UCB, is based on all of the information that runs through all of the budget books, and that would include departmental expenses. There is extra investment going into defence and into the NDIS. As you would expect, they are two of the five fastest growing areas of the budget. The NDIS is the second and I think defence would be the third or fourth, and so they would be seeing increases. But the budget UCB takes into account all of those decisions. It may be reported slightly differently in different tables, based on different accounting standards, but the UCB is an honest reflection of the state of the Commonwealth’s finances.
