Labour reveals massive savings strategy covering reduced consultancy costs, non-wage expenses
The Labour Party has unveiled a massive billion-dollar savings plan that will see the government reduce its reliance on consultants, contractors, and labour hires.
The plan was unveiled in Labour's election policy costing that was released on Monday.
It stated that the party, if re-elected, plans to further reduce spending on consultants, contractors and labour hires, as well as non-wage expenses such as travel, hospitality, and property.
"Agencies will also be encouraged to achieve savings through whole-of-government purchasing arrangements and productivity gains from new technologies and flexible work," the party said.
This move could see the government save $6.4 billion, according to the Labour Party.
"Labour will continue the work needed to rebuild the public service after inheriting one that was hollowed out after a decade of the Liberals' outsourcing, underinvestment, and undervaluing of the work that public servants do and the services they deliver," it added.
Finance Minister Katy Gallagher said the plan will not reduce the number of employees involved, The Guardian reported.
"We've managed in our first term to find about $5.3 billion in savings in those areas," she said as quoted by the news outlet.
"So, this is really a continuation of that effort and we have no doubt that we will be able to deliver those savings without impacting importantly on the services and the programmes that the APS provides."
Labour's announcement comes in the wake of Opposition Leader Peter Dutton's affirmation to cut 41,000 public service jobs in Canberra if elected.
"I've been very clear about that [plan] from day one," Dutton told reporters last week. "Some of those positions, of course, haven't even been filled yet, as well, so they're projected numbers."
Meanwhile, Labour's massive savings plan comes as analysts at S&P Global Ratings warned that the AAA rating could be at risk if campaign pledges led to larger deficits.
"The budget is already regressing to moderate deficits as public spending hits post-war highs, global trade tensions intensify, and growth slows," said Anthony Walker and Martin Foo in a note quoted by Bloomberg.
"How the elected government funds its campaign pledges and rising spending will be crucial for maintaining the rating."
But Treasurer Jim Chalmers downplayed these concerns as he noted that their election pledges have been "more than offset" by the improvements in the budget, Reuters reported.
"If the ratings agencies are worried about spending and if they're worried about off-budget funds we have demonstrated we have found the room for our election commitments," Chalmers said as quoted by the news outlet.
"From time to time the ratings agencies make their views known. We take their views seriously. We are managing the budget responsibly."
Labour's plan, in addition to the workforce spending changes, also includes a hike in the visa application charge for primary student visa applicants to $2,000 starting 1 July.
The party said it expects a $760-million savings amount from the initiative, leading to a total of $7-billion savings to offset their election promises.
