The federal government's commission of audit is a prime opportunity to scrutinise the activities of government in Australia. Some functions of government are justifiably handled at the federal level and some at the state level. Ideally, these functions should be clearly delineated. As the reach of the federal government has grown, however, there have been duplications and the addition of non-essential programs to the federal budget.
Duplication blurs the lines of responsibility and accountability. It also creates inefficiency and unnecessarily increases costs to taxpayers, problems that become urgent in a time of budgetary stress.
Two examples of redundant federal government portfolios are the Department of Education and the Department of Agriculture. These departments can be abolished by winding up programs that either duplicate state government responsibilities or are beyond the necessary scope of the federal government, and transferring any remaining essential functions to other departments.
These departments employ about 1000 and 5000 public servants, respectively. Not all these employees perform roles essential to good governance; the federal Department of Education, for example, does not employ teachers or manage schools.
The idea of abolishing the federal Department of Education is not new. As education expert Brian Caldwell has pointed out, Canada is a high-performing, high-equity country on international assessments even though it does not have a federal department of education.
The majority (90 per cent) of funds in the federal education budget is recurrent funding to schools. Although recurrent funding to schools began only in 1974, schools have become increasingly dependent on it. The new Better Schools funding system, which begins in 2014, has secured federal funding for at least the next four years so this is not an area amenable to immediate reform.
Even so, recurrent funds to schools do not need to be administered by a department of education; this function can be transferred to Treasury. Other programs could also be transferred into different federal government portfolios, such as Abstudy into the Department of Human Services. Programs such as the School Chaplaincy and other grants, awards and fellowships can be ended.
These steps would terminate the federal Department of Education, saving taxpayers an estimated $130 million a year initially, much more over time. This would also curtail the government's ability to invent and implement new programs.
Like education, many functions associated with agriculture management do not need to be carried out by the federal government. The Department of Agriculture comprises six R&D agencies – cotton, fisheries, grains, grape and wine, rural industries, and sugar. Along with a wine marketing body, these agencies spend more than $1 billion a year offering subsidies to perform functions already done by the states and territories.
Each state, and the Northern Territory, has its own department and agencies to regulate agricultural land and administer grants for R&D. There is no need for both federal and state governments to each regulate agricultural land and dole out subsidies for R&D. And there is no justification for a federal marketing body to promote Australia's wine interests.
There are two legitimate functions of the Department of Agriculture – the Australian Fisheries Management Authority and the Australian Pesticides and Veterinary Medicines Authority. These agencies perform vital functions for the federal government and should be preserved.
The rest of the federal Department of Agriculture should be wound up and the AFMA and APVMA transferred to the Industry portfolio. Taxes levied on industry to pay for part of the subsidies can then be abolished, along with the office of the Minister for Agriculture. This would save the federal government $1.7 billion in spending and cost $403.9 million in tax receipts foregone – a budget reduction of $1.3 billion a year.
The savings from abolishing the federal departments of Education and Agriculture are based on publicly available figures and are therefore estimates only. Yet the principle that government programs and agencies, once established, need not be permanent is an important one.
The boundaries between state and federal government responsibilities ought to be redrawn to make significant savings now and into the future.
Jennifer Buckingham is a research fellow and Alexander Philipatos is a policy analyst at the Centre for Independent Studies. They are contributors to the TARGET30 report, Emergency Budget Repair Kit: In Case of Emergency, Cut Spending, released on Thursday.
Home > Commentary > Opinion > Double trouble means it’s time for drastic cuts
Double trouble means it’s time for drastic cuts
The federal government's commission of audit is a prime opportunity to scrutinise the activities of government in Australia. Some functions of government are justifiably handled at the federal level and some at the state level. Ideally, these functions should be clearly delineated. As the reach of the federal government has grown, however, there have been duplications and the addition of non-essential programs to the federal budget.
Duplication blurs the lines of responsibility and accountability. It also creates inefficiency and unnecessarily increases costs to taxpayers, problems that become urgent in a time of budgetary stress.
Two examples of redundant federal government portfolios are the Department of Education and the Department of Agriculture. These departments can be abolished by winding up programs that either duplicate state government responsibilities or are beyond the necessary scope of the federal government, and transferring any remaining essential functions to other departments.
These departments employ about 1000 and 5000 public servants, respectively. Not all these employees perform roles essential to good governance; the federal Department of Education, for example, does not employ teachers or manage schools.
The idea of abolishing the federal Department of Education is not new. As education expert Brian Caldwell has pointed out, Canada is a high-performing, high-equity country on international assessments even though it does not have a federal department of education.
The majority (90 per cent) of funds in the federal education budget is recurrent funding to schools. Although recurrent funding to schools began only in 1974, schools have become increasingly dependent on it. The new Better Schools funding system, which begins in 2014, has secured federal funding for at least the next four years so this is not an area amenable to immediate reform.
Even so, recurrent funds to schools do not need to be administered by a department of education; this function can be transferred to Treasury. Other programs could also be transferred into different federal government portfolios, such as Abstudy into the Department of Human Services. Programs such as the School Chaplaincy and other grants, awards and fellowships can be ended.
These steps would terminate the federal Department of Education, saving taxpayers an estimated $130 million a year initially, much more over time. This would also curtail the government's ability to invent and implement new programs.
Like education, many functions associated with agriculture management do not need to be carried out by the federal government. The Department of Agriculture comprises six R&D agencies – cotton, fisheries, grains, grape and wine, rural industries, and sugar. Along with a wine marketing body, these agencies spend more than $1 billion a year offering subsidies to perform functions already done by the states and territories.
Each state, and the Northern Territory, has its own department and agencies to regulate agricultural land and administer grants for R&D. There is no need for both federal and state governments to each regulate agricultural land and dole out subsidies for R&D. And there is no justification for a federal marketing body to promote Australia's wine interests.
There are two legitimate functions of the Department of Agriculture – the Australian Fisheries Management Authority and the Australian Pesticides and Veterinary Medicines Authority. These agencies perform vital functions for the federal government and should be preserved.
The rest of the federal Department of Agriculture should be wound up and the AFMA and APVMA transferred to the Industry portfolio. Taxes levied on industry to pay for part of the subsidies can then be abolished, along with the office of the Minister for Agriculture. This would save the federal government $1.7 billion in spending and cost $403.9 million in tax receipts foregone – a budget reduction of $1.3 billion a year.
The savings from abolishing the federal departments of Education and Agriculture are based on publicly available figures and are therefore estimates only. Yet the principle that government programs and agencies, once established, need not be permanent is an important one.
The boundaries between state and federal government responsibilities ought to be redrawn to make significant savings now and into the future.
Jennifer Buckingham is a research fellow and Alexander Philipatos is a policy analyst at the Centre for Independent Studies. They are contributors to the TARGET30 report, Emergency Budget Repair Kit: In Case of Emergency, Cut Spending, released on Thursday.
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