Budget 2014: Axe to fall on government agencies in search for savings

Updated

The Abbott Government says it will save nearly $500 million in tomorrow's budget by taking an axe to Commonwealth agencies.

A further 36 government bodies will be abolished on top of the 40 already slated for closure.

Parts of seven national, cultural institutions will be merged while the Royal Australian Mint and Defence Housing Australia could be privatised, as the Coalition moves to reduce the size of government.

AM also understands the Government is poised to freeze funding or lower the indexation of more than 200 spending programs.

Combined with the cuts and closures, it is more bad news for public servants as thousands will lose their jobs.

Finance Minister Mathias Cormann says there are close to 1,000 different Commonwealth bodies and that many are inefficient.

"It is quite extraordinary when we were told on coming into government that nobody could actually tell us exactly how many different individual government bodies there were," he said.

Among those to be abolished outright are the Australian Renewable Energy Agency, the COAG Reform Council, the National Water Commission and the Prime Minister's Indigenous Business Policy Advisory Group.

Dozens of other organisations will be merged.

The Administrative Appeals Tribunal, the Classification Review Board, the Migration Review Tribunal and Refugee Review Tribunal will be amalgamated.

So will the back-office functions of the National Archives, the Film and Sound Archive, the National Gallery, National Library, National Museum, Old Parliament House and the National Portrait Gallery.

Customs will become part of the Immigration Department, as was announced last week by Immigration Minister Scott Morrison.

The functions of the Australian Information Commissioner will be split between several other agencies, while smaller agriculture, health and communications bodies will be absorbed by other departments.

Senator Cormann says the Government will save about $470 million over the budget forward estimates.

"This is not a matter of targeting one area of government more than another," he said.

"We are very systematic and very methodical in going right across government."

Unions are warning against further cuts to the size of the public sector, arguing demand for services is set to increase in coming years.

ACTU national secretary Ged Kearney says cutting the public service is a short-sighted measure that goes against the advice of economists.

"When I hear a government is about to slash thousands, tens of thousands of good, secure public sector jobs, then that is a concern because these are real people this is going to affect. Not only that, but you have to ask: what services are going to disappear?" she said.

Labor Senator Doug Cameron says the Government cannot be trusted.

"This is a government that promised so much to the Australian public, but has decided that it will not keep its promises," he said.

"This government hates the public service."

Asset sales also on the agenda

Tomorrow night the Government will announce scoping studies into the privatisation of the Royal Australian Mint, Defence Housing Australia, Australian Hearing and the registry function of corporate regulator ASIC.

Any surplus Commonwealth-owned property will be sold and a new "contestability framework" will be implemented to encourage competition to see if certain government functions should be open to competition from inside and outside government.

The Coalition will also spend the rest of this term reviewing agencies to see if their work should still be performed by government.

"The objective is to save money for taxpayers by ensuring that government administration is as streamlined and efficient as possible, but also to ensure that government services are delivered in a way that's effective and accountable," Senator Cormann said.

Topics: budget, privatisation-and-deregulation, public-sector, federal-government, government-and-politics, australia, act, nsw, nt, sa, qld, tas, vic, wa

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