Efficiency dividend
| This article is part of a series on |
| Public finance |
|---|
 |
| Part of a series on |
| Finance |
|---|
 |
An efficiency dividend is an annual reduction in resources available to an organization.[1] It is usually applied as a percentage of operational (running) costs.
It has been used by the Australian Government on Australian Public Service departments and agencies since 1987. Some departments and agencies have been exempted.[2]
History
[edit]A 1.25% efficiency dividend was introduced by the Bob Hawke Government in 1987–88. It was reduced to 1% from 1994–95 to 2004-2005 then increased to 1.25% from 2005 to 2006. For 2008-09 a one-off 2% efficiency dividend on top of the ongoing efficiency dividend was applied. In 2011-12 it was 1.5% and in 2012-13 another extra one-off 2.5% was applied.[3]
Controversy
[edit]Proponents of the efficiency dividend argue that it improves the cost effectiveness of the public sector, allows managerial flexibility in the allocation of resources, and is a good way to generate savings in the cost of public sector administration.[4] Critics have described the efficiency dividend as a blunt instrument,[5] a false economy,[6] and lazy budgeting.[7] Smaller agencies have also highlighted the difficulty in finding such savings.[8]
References
[edit]- ↑ "efficiency dividend". www.businessdictionary.com. WebFinance Inc. Archived from the original on 30 December 2014. Retrieved 5 January 2015.
- ↑ "Agencies exempt from the boosted efficiency dividend". The Canberra Times. Fairfax Media. 29 November 2011. Archived from the original on 4 March 2016. Retrieved 5 January 2015.
- ↑ Horne, Nicholas. "The Commonwealth efficiency dividend: an overview". www.aph.gov.au. Retrieved 5 January 2015.
- ↑ "REPORT 413: The Efficiency Dividend: Size does matter". www.aph.gov.au. Commonwealth of Australia. Retrieved 5 January 2015.
- ↑ Stone, Christopher (1 July 2014). "In government, small isn't always efficient". The Canberra Times. Fairfax Media. Retrieved 5 January 2015.[permanent dead link]
- ↑ Hutchens, Gareth (2 January 2015). "Why this obsession with cutting public service jobs?". The Canberra Times. Fairfax Media. Archived from the original on 8 January 2015. Retrieved 5 January 2015.
- ↑ J, Samuel. "The Government's efficiency dividend". catallaxyfiles.com. Retrieved 5 January 2015.
- ↑ "Australian Public Service Commission Submission to the Joint Committee of Public Accounts and Audit: Inquiry into the effects of the ongoing efficiency dividend on smaller public sector agencies" (PDF). www.aph.gov.au. Retrieved 7 January 2015.