Federal Election 2022: Coalition to cut $2.7bn in spending to public sector

Treasurer Josh Frydenberg and Finance Minister Simon Birmingham released the Coalition's election costings on Tuesday morning, confirming an extension of the controversial public service efficiency dividend.

The opposition hit back at the "assault" on the public service, which it described as being "deliberately hidden" until the last week of the federal election.

The federal government briefed journalists that the suite of measures and cuts announced would reap a nearly $1 billion improvement to the budget's bottom line over the forward estimates.

The measure increasing the existing 1 per cent efficiency dividend by an additional 0.5 percentage points would result in a $2.7 billion improvement to the budget bottom line over the forward estimates, compared to what was outlined in the pre-election budget in March.

Prime Minister Scott Morrison said he had confidence top bureaucrats, some of which he said are paid nearly million-dollar salaries, would be able to find the billions in savings out of the existing total $327.3 billion departmental budget.

"Now if our senior public servants - and they're paid well - if they can't find $2.7 billion out of a budget of $327.3 [billion], well, I've got a lot more confidence in them that they can achieve that," he said.

Department secretaries and chief executives would be in charge of deciding where those cuts came from, he added.

"[Agency heads] are responsible for managing. They are the best people to make the decisions about how they achieve those savings. That's their job," he said.

"That's what you do as a government - you task your public servants to get jobs done and I always respect greatly the work of the public service but I also expect results."

Labor finance spokesperson Katy Gallagher criticised the government's announcement for not being revealed earlier during the March budget.

"Tens of thousands of Canberrans have early voted without knowing the full extent of the Zed and the Liberals' assault on the public service and APS jobs," she said.

"You simply cannot trust the Liberals with the public service. Only an Albanese Labor government will reduce waste and re-invest in the public service."

READ MORE:

Some agencies, including the NDIS, National Recovery and Resilience Agency and Safe Work Australia, as well as ABC and SBS will be exempt from the spending cuts.

Mr Frydenberg said it was up to departmental heads to find where savings could be made to reach the government's target.

"The way the efficiency dividend works is it's up to departmental heads to find those efficiencies within their own organisation," he told Radio National on Tuesday.

"They are best placed as the departmental heads to work out how they'll find efficiencies."

The Coalition argues the savings demonstrate its commitment to fiscal discipline and spending constraint.

Mr Frydenberg criticised Labor for having not released its election commitment costings yet.

The Coalition says it has submitted 35 policies for costings for the 2022 election, of which eight are yet to be released. It has not revealed the detail of the efficiency dividend beyond the headline savings figure.

Labor has promised to cut $3 billion from contractors and consultants to the federal public service over the next four years, and reinvest $500 million into restoring frontline service delivery agencies.

It says it will also release costing for its policies this Thursday, with Labor frontbencher Bill Shorten telling Nine that when he ran against former prime minister Tony Abbott, the Coalition released its costs in the final week of the campaign.

"Yes, we have put our headline figures out. Then we've been very upfront," Mr Shorten told the Today show.

"But let's not forget that if Mr Morrison wants to have an argument about financial credibility, he has taken our debt to $1 trillion. There's not enough zeros to run across the screen. He is desperate. He just wants to bag Labor."

At the 2019 election, the Coalition promised to cut $1.5 billion from the public service through a 2 per cent efficiency dividend that diminished each year to 1 per cent.