The Coalition doggedly promised to cut 41,000 public servants in Canberra. Public service minister and Labor’s ACT Senate candidate Katy Gallagher said the number of public servants was “about right”, but as the ABC pointed out, she “did not rule out cuts altogether”.
Her exact words were: “there may be some changes across departments and agencies as programs finish and other priorities ramp up”.
There’s an obvious question here: if there’s still room for greater efficiency in the public service, what good does the annual efficiency dividend on the public service do?
The efficiency dividend was brought in by the Hawke Government in 1987. It forces government departments and agencies to find enough savings and efficiencies in their operations to accommodate a 1% cut in their budget each year.
It’s been around for nearly forty years now, and governments dial it up or down depending on whether they think there’s political advantage in it. But whichever way you look at it, they haven’t worked as intended.



