Australian government departments to cut $1b from public service spending

Australian government departments will slash more than $1 billion from their spending in order to help bring the budget back to surplus.

Finance Minister Penny Wong said efficiencies can be driven in a number of ways, such as coordinating procurement between departments to generate savings.

Departments will be expected to cut their budgets by 1.5 per cent for two years.
Minister Wong said she expects the public service to be able to deliver the savings without resorting to forced redundancies, despite union claims the measure will cost jobs.

"These savings will help bring the budget back to surplus in 2012-13 and show the Government is determined to lead the way by tightening its own belt first," she said.

"We are seeing a much more cautious Australian consumer. People are saving more than they're spending. We know there is a high Australian dollar that is putting pressure on some sectors - particularly in the non-mining sectors.

"The floods and cyclones have come at an economic cost as well as a human cost," she said.
But Community and Public Sector Union national secretary Nadine Flood says the measure breaks an election commitment and will cost jobs.

"Potentially this decision will impact in agencies such as Centrelink, Medicare, in border protection agencies and at airports, cultural institutions and in science agencies," Ms Flood told ABC News Online.

Ms Flood says Labor promised at the last election that the efficiency dividend would not be increased beyond 1.25 per cent.

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