Coalition plan to increase APS efficiency dividend 'ill-conceived'

On Tuesday, it was announced a re-elected Morrison government would deliver an extension of the controversial public service efficiency dividend in order to deliver a $1 billion improvement to the budget's bottom line in less than half a decade.

Opponents to downsizing the public service lashed out against Tuesday's announcement, calling it "ill-conceived" and resulting in longer wait times for services.

Prime Minister Scott Morrison on Tuesday said he would task top bureaucrats to find $2.7 billion in savings out of departmental expenditure over the forward estimates from 2022-23.

He added it was up to department secretaries and agency heads to decide where those savings were made, declining to directly answer whether more money could be poured into consultancy and contract spending.

"[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."

The proposed measure would raise the existing 1 per cent efficiency dividend by an additional 0.5 percentage points, resulting in the $2.7 billion improvement to the budget by 2026-27, compared to what was outlined in the pre-election budget in March.

Labor senator, and finance spokesperson, Katy Gallagher slammed the policy, adding it was another reason the Liberals couldn't be trusted with the public service.

"Zed Seselja has deliberately hidden this cut from Canberrans. There's no reason this measure couldn't have been included in their Budget just two months ago," Senator Gallagher said in a social media post.

"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."

The main public sector said it estimated the decision could result in 5500 jobs being slashed from the workforce.

Community and Public Sector Union national secretary Melissa Donnelly said the government was turning its back on Australians by stripping the essential services they relied on.

"Ripping billions of dollars out of the public sector will have a devastating impact on jobs and services, and further reduce the capacity of the APS to support Australians," she said.

"Let's be clear about what these cuts to the public sector mean - they mean people wait longer on the phone to Centrelink, veterans wait longer for claims to be processed and backlogs will continue to grow.

"At a time when so many in the Australian community rely on essential public services, the Morrison Government has turned its back on the community."

Cuts to the bureaucracy are big news in Canberra, where government frontbencher Zed Seselja is in a tight race to retain his Senate seat against two Climate 200-backed independents.

David Pocock, who wants to unseat the senator, said the $2.7 billion cut was "ill-conceived" and shows "disrespect for Canberrans and the expertise and professionalism of our public sector".

"Each dollar ripped out of the APS is yet another dollar ripped out of Canberra," Mr Pocock said.

"Wherever I go around Canberra, across hundreds of conversations, this is something the community raises with me.

"Cutting down on government waste, pork-barrelling and mismanagement would be a much better start when it comes to improving the budget bottom line."

The opposition announced in April it would also cut $3 billion in public service spending but would focus on reducing spending on contractors and consultants over the next four years.

Labor's finance spokesperson Katy Gallagher committed to reinvest $500 million into restoring frontline service delivery agencies and abolish the public service staffing cap responsible for increasing job insecurity and waste while eroding capability.

"Under Scott Morrison and the Liberals, the essential public services Australians rely on have endured years of damaging cuts, which have eroded internal capability across the APS," she said last month.