Small is beautiful, says Federal government

Back-to-basics budget focuses on consolidation and mergers between departments and agencies.

Downsizing government

Downsizing government

The mantra of abolitions and amalgamations is gaining a foothold in Canberra. A raft of government bodies are either being abolished, consolidated, merged or departing the Commonwealth.

The latest reforms reinforce the move towards more more efficient government. Cuts into the New Year are slated to reduce waste and duplication while improving the business of delivering services.

This back-to-basics regime is the most comprehensive to date, according to the Federal Minister for Finance, Mathias Cormann. He said the administration has delivered the “third and most significant phase of abolitions and amalgamations of government bodies so far.”

Under budget cuts and broader fiscal responsibility, Canberra is abolishing 138 government bodies. Moves are underway to consolidate 15 bodies into existing departments. Two bodies leave the Commonwealth.

Another 26 are being downsized to 20. Five entities will consolidate their back offices with shared service centres or supporting departments.

A new “scoping study” is considering options around the future ownership and operation of the communications network used by the Commonwealth.

Sell-offs and savings

Among other cost-cuts, the consolidation has involved selling off Medibank Private and raising $5.7 billion in proceeds. These proceeds are being recycled into “productivity enhancing, job creating infrastructure,” Cormann said.

AusAid is being merged with the Department of Foreign Affairs and this merger delivers savings that are close to $400 million over four years.

The former Department of Regional Australia and Local Government was integrated with the Department of Infrastructure. This integration offers a saving of $17.6 million over four years by removing duplicated corporate functions.

Moreover, legislation was passed to abolish Health Workforce Australia and save $142 million over four years. The high-profile Council of Australian Governments Reform Council was abolished in June this year. Residual monitoring functions are shifting to the Productivity Commission.

In-depth reviews are planned ensuring that departments and major agencies stay efficient and financially-savvy. Independent experts start of by reviewing the Departments of Education and Health.

Lessons gleaned from these investigations will be reflected in “subsequent reviews of other departments and major agencies.”

Leaner bureaucracy

An Australian Government Governance Policy is being rolled out to strip back the layers of bureaucracy. This policy seeks to ensure that structures are efficient, effective and more streamlined.

Plans are underway to release an organisations register that lists and classifies all Australian government bodies. This register will enable people to gain more clarity around the functions and composition of the public sector.

The latest tally shows the current government has inherited up to 1,252 separate bodies from the predecessor. The goal is to get this well below 1,000 by the end of this term.

Follow Shahida Sweeney on Twitter: @ShahidaSweeney

Tags sustainable governmentfederal governmentFinance Minister Mathias CormannProductivity Commissionbudget cutsmergersconsolidationcommonwealth budgetcorporate governance

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