Public sector winners in big spending budget

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Josh Frydenberg’s third federal budget is big on spending, big on winners, and big on debt, as Australia edges closer to its next federal election.

Declaring Australia to be ‘coming back’ in the face of a once-in-a-century pandemic, the treasurer forecast a 2021-22 deficit of $106.6 billion dollars, improving over the forward estimates to an expected deficit of $57 billion in 2024-25.

The cash balance in the current financial year is now expected to be a deficit of $161 billion, compared with the $213.7 billion deficit previously predicted.

Frydenberg said Australia’s stronger-than-expected economic recovery, predominantly because of better-than-expected tax receipts, had improved the budget position.

“The Australian spirit has shone through,” he announced.

But he said the health crisis had come at a ‘significant and unavoidable cost’, with much left to do to fix the economy.

“Our plan is working. Australia’s economic engine is roaring back to life,” he said.

“Since the last budget, almost half a million jobs have been created.”

Overall, the public sector does well in this budget, with most agencies to benefit from resourcing boons.

The increases to funding signify the times we live in, with agencies to be responsible for administering $589.3 billion in expenses to deliver services for individuals, families and businesses as the nation recovers from COVID-19.

According to the budget papers, the government will further strengthen the resources and tools of the public service in 2021-22, so it can efficiently deliver the next stage of temporary and targeted support for continued economic recovery.

Finance minister Simon Birmingham noted that throughout the difficult events of the past 15 months, the Australian Public Service had risen to the highest standards of public service.

“APS staff have proven themselves resilient and flexible, working long hours and reaching across traditional boundaries to deliver essential services to the public.”

The average staffing level (ASL) resources estimate will increase to 174,276, which is 5,364 above the updated estimate for 2020-21.

The uplift was anticipated last year, but the greater estimate comes due to coronavirus recovery investment.

To implement the government’s pandemic recovery policy objectives, the areas of health, employment, and social services will be boosted significantly.

The measures include:

• ASL increases in the Education, Skills and Employment portfolio to deliver measures to support job creation and growth. This includes the establishment of the New Employment Services Model, which will replace the jobactive program and help connect employers with job seekers;
• ASL increases in the Health portfolio to deliver the COVID-19 vaccination program rollout, and to underpin the government’s response to the Royal Commission into Aged Care Quality and Safety;
• ASL increases to deliver a range of measures to reform the mental health system in response to key recommendations made by the Productivity Commission’s Inquiry into Mental Health;
• ASL increases to the Department of Social Services to support initiatives aimed at reducing violence against women and children, and strengthening the Cashless Welfare program and the National Redress Scheme; and
• ASL increases to help improve the efficiency of veterans’ service delivery, establish and support the Royal Commission into Defence and Veteran Suicide, and support the establishment of the Office of the Special Investigator.

These and other decisions have been taken in line with the government’s policy to manage the size of government administration through the assessment of the need for additional staff, including an ongoing requirement that agencies first inform the government of opportunities to reprioritise resources before requesting additional ASL.

Some of the ASL increase is temporary and will decline when relevant policies cease, particularly many pandemic response initiatives.

But there are numerous new initiatives requiring long-term, dedicated public sector resources and attention.

“In this budget, the government is providing record funding for schools, hospitals, Medicare, mental health, aged care and disability support,” the treasurer said.

National security will be boosted with an additional $1.9 billion over the decade, with a $270 billion investment in defence capability over 10 years.

A total of $17.7 billion is committed to improving the aged care system; an additional $15 billion infrastructure commitment; $1.2 billion to be invested in the Digital Economy Strategy; and $480 million in new funding for the environment.

“Jobs are coming back. The economy is coming back. Australia is coming back,” Frydenberg said.