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Kevin Rudd plans to visit the Governor-General on Sunday or Monday to seek approval for an election on September 7. Sources have told Fairfax the Prime Minister has now settled on the date and will fire the starter's gun on what promises to be one of the most intense political contests in memory. The election campaign comes within days of an extraordinary mini-budget designed to position the government to deal with changing economic circumstances. In delivering the mini-budget on Friday, the government offered no guarantees against mass public service sackings as it moves to rip another $600 million a year from the bureaucracy's budget from 2014. The Labor government is imposing the cuts in the form of a dramatically increased public service efficiency dividend that will jump from 1.25 per cent to 2.25 per cent from next July. The Finance Department will not say how many jobs could go, but public service unions say up to 5000 positions could be on the line after the "temporary" three-year increase to the dividend was announced as the government grapples with a $33 billion plunge in projected revenue over four years. Faced with a predicted deficit of more than $30 billion in 2013-2014, Treasurer Chris Bowen published an economic statement on Friday outlining a plan to get the budget back in the black by 2016-17. The government says it has found $17.4 billion worth of cuts, which it describes as ''responsible savings'' including the new hit to the public service and the already announced tax increase on cigarettes. Finance Minister Penny Wong said she expected an extra $1.8 billion in savings from the increased dividend and that the government "expects" agencies to bring in the savings without forced redundancies but offered no guarantees there would be no sackings. She said her department believed the increased dividend could be "absorbed" by agencies and departments. "The government has also identified $1.8 billion in savings over three years by increasing temporarily the efficiency dividend on the public service from 1.25 per cent to 2.25 per cent for the period of 2014 to 15, to 2016-2017 inclusive," Senator Wong said. "The advice from the Department of Finance is that agencies can absorb the temporary increase in efficiency dividend through a combination of non-staff cost savings, natural attrition and voluntary redundancies. The government continues to make it clear that it expects agencies not to resort to rounds of forced redundancies in order to meet these targets." In the job for little over a month, Mr Bowen laid much of the blame at the feet of a slowing Chinese economy. But the opposition attacked the revised economic statement, with shadow treasurer Joe Hockey describing Labor's economic management as ''chaotic'' and its budget ''in free fall''. Mr Hockey said nearly 800,000 Australians were now likely to be jobless in coming months. Softening economic conditions could force an extra 70,000 people out of work, as growth slows and Commonwealth revenues collapse over the next four years. The worsening picture has shredded Labor's budget forecasts, which were set just 10 weeks ago, creating a big political headache for the government. Mr Rudd enjoys a solid personal lead over Opposition Leader Tony Abbott as preferred prime minister, but the respective parties are more evenly poised on 50 per cent each in a series of recent opinion polls. The jobless rate is officially expected to climb to 6.25 per cent in 2013-14 and 2014-15. The last time the jobless rate was above 6.25 per cent was in September 2002. Meanwhile, all of the smaller departments that won exemptions to the dividend, including many of Canberra's cultural institutions, will continue to be exempt from the dividend, Treasury has confirmed. The main public service union, the CPSU, reacted to the news of the increased dividend on Friday by calling a "crisis meeting" of its senior leaders and suspending all of its pro-Labor election campaigning activity. National secretary Nadine Flood said the union calculated the increased dividend could cost 5000 public service jobs. "We are calling on the government to reconsider this awful decision," Ms Flood said. "What politicians forget is that public sector workers are real people with families, mortgages and bills. "If any other industry announced it was cutting thousands of jobs there would be a national outcry." Former Finance Department deputy secretary Stephen Bartos said that repeated efficiency dividends would eventually have an impact on service delivery and would even encourage departments to "game" their budgets in anticipation of the next round of dividends. "It's an easy saving to announce but in practical terms you have to wonder whether the government can keep imposing increased efficiency dividends without fundamentally restructuring program delivery," Mr Bartos said. "A better saving, but one which they obviously didn't have time to think through, would have been to determine which programs to cut. "The trouble with across-the-board efficiency dividends is that they're not targeted, it encourages gaming of the budget system in that agencies are encouraged to try to pad their budgets in expectation of future efficiency dividends. "That's counterproductive."

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