Public service savings fund govt promises

Josh Frydenberg says public service efficiencies will cover the cost of the coalition's promises.
Josh Frydenberg says public service efficiencies will cover the cost of the coalition's promises.

The coalition says it will more than offset the cost of its election promises by keeping the two per cent public service efficiency dividend in place for another two years.

Treasurer Josh Frydenberg on Thursday revealed policies announced during the election had totalled $1.4 billion over four years, building to $3.8 billion over 10 years.

However, they would be offset by new savings of $1.5 billion over the forward estimates, building to $5 billion over the medium term.

The efficiency dividend - which involves departmental secretaries cutting costs and finding better value for money - would be kept at its rate of two per cent for a further two years, dropping to 1.5 per cent in 2021/22, before returning to the base rate of one per cent from 2022/23.

Exemptions would apply to the ABC, SBS and Safe Work Australia, as well as the Australian Signals Directorate and Office of National Intelligence.

As well, exemptions would be extended to the National Disability Insurance Agency, the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority.

Institutions such as the Australian War Memorial, National Archives of Australia, National Gallery of Australia, National Library of Australia and National Museum of Australia would also escape the dividend.

"The net effect of all our policy commitments announced since the budget during the election campaign is a slight improvement to the budget surplus in each year of the current forward estimates period, without increasing taxes," Mr Frydenberg told reporters on Thursday.

Cumulative surpluses are now expected to be $45.1 billion over the next four years.

Asked why the coalition waited until two days before the election to reveal its costings, rather than a week out as Labor had done, Finance Minister Mathias Cormann said a budget had been delivered on April 2.

"This is a very small set of additional measures," he said.

Shadow treasurer Chris Bowen said Labor did not accept the need for a further efficiency dividend.

"We don't need to because we have made tough decisions," Mr Bowen told reporters in Sydney.

"It is further cuts from the Liberals 36 hours before people are voting."

Australian Associated Press