❓ WA Treasurer answers questions regarding savings delivered by the Service Priority Review, detailing amounts for specific policy areas and accounting for separation costs. The government claims to be on track to meet savings targets.
AnsweredQoN 3648Legislative Assembly
Asked
14 August 2018
Member
Portfolio
Treasurer; Minister for Finance; Energy; Aboriginal Affairs
QuestionView source ↗
In relation to the Government’s election commitment for a Service Priority Review to deliver savings of $750 million by 30 June 2020, I ask: (a) What are the total savings delivered by the Service Priority Review for each of the financial years 2017-18 to 2019-20; (b) What are the savings made by the Service Priority Review for each of the financial years 2017-18 to 2019-20 listed by each policy area, including: (i) the reduction of the number of Government agencies by 20 per cent; (ii) the $1,000 wages policy; (iii) the Freeze Salaries and Allowances Tribunal; (iv) the Voluntary Targeted Separation Scheme; and (v) and the Government’s commitment to reduce the number of Senior Executive Service positions by 20 per cent; (c) In relation to (a) and (b), are these figures net of any severance and compensation payments; and (d) In relation to (a) and (b), are these figures net of the Department of Premier and Cabinets $15.9 million expenditure to oversee the delivery of public sector reform?
AnswerView source ↗
Answered
18 September 2018
Response time
9 days
(a) The 2017-18 Budget detailed Service Priority Review (SPR) savings totalling $763 million over the five years 2016-17 to 2020-21, with $446 million within the period 2017-18 to 2019-20 ($32 million in 2017-18, $171 million in 2018-19 and $243 million in 2019-20). Net of the upfront cost of the Voluntary Targeted Separation Scheme (VTSS), total savings of $356.3 million have been achieved for the years 2017-18 to 2019-20 to date (a net $178.4 million cost in 2017-18, and savings of $224.5 million in 2018-19 and $310.2 million in 2019-20). Total savings increase to $752 million over the four years to 30 June 2021, similar to the 2017-18 Budget provisions for SPR savings. These outcomes reflect the impact of the individual savings measures in item (b).
(b)(i) The Machinery of Government changes have reduced the number of departments from 41 distinct entities to 25 (with effect from 1 July 2017). Agencies impacted by the Machinery of Government changes will have reduced corporate overhead costs, and achieved reductions in expenditure through more efficient delivery of services by making use of the savings tools listed in parts (ii) to (v) of this question.
(ii) Savings from the implementation of the $1,000 wages policy were written into agency budgets and disclosed by agency in Appendix 3 of the 2017-18 Mid-year Review released on 20 December 2017 (see pp. 87-89). Total savings over the period 2017-18 to 2019-20 were $234.7 million ($27.2 million in 2017-18, $73.8 million in 2018-19 and $133.7 million in 2019-20).
(iii) Savings from the implementation of the freeze on Salaries and Allowance Tribunal salaries determinations were written into agency budgets as part of the the 2017-18 Budget released on 7 September 2017. Total savings over the period 2017-18 to 2019-20 were $8.9 million ($1.3 million in 2017-18, $3 million in 2018-19 and $4.6 million in 2019-20).
(iv) The VTSS is the largest such scheme implemented in the Western Australian public sector. It is on track to deliver the planned 3,000 separations but over a longer period. At 30 June 2018, a total of 2,311 separations had been finalised. Separation costs in 2017-18 totalled $280 million. Savings flowing from centrally-funded separations over the three years to 2019-20 total an estimated $380.9 million ($59.9 million in 2017-18, $159.7 million in 2018-19 and $161.3 million in 2019-20). As with previous separation programs run across the sector, agencies that self-funded separations (from within existing budget settings) have been able to retain all savings to reinvest in service delivery.
(v) Savings from the implementation of the 20% reduction in Senior Executive Service positions were written into agency budgets as part of the the 2018-19 Budget released on 10 May 2018. Total savings over the period 2017-18 to 2019-20 were $65.2 million ($13 million in 2017-18, and $26.1 million in each of 2018-19 and 2019-20).
(c) The savings in (a) and (b)(iv) include the cost of separations and compensation payments, where payable. Separation and compensation costs for the reduction in Senior Executive Service numbers (item (b)(v)) are not held centrally by Treasury (as these separations were paid for by agencies from existing budgets and not funded from a dedicated central-funding source).
(d) The savings detailed in answers (a) and (b) exclude the allocation of public sector reform funding provided to the Department of the Premier and Cabinet.
(b)(i) The Machinery of Government changes have reduced the number of departments from 41 distinct entities to 25 (with effect from 1 July 2017). Agencies impacted by the Machinery of Government changes will have reduced corporate overhead costs, and achieved reductions in expenditure through more efficient delivery of services by making use of the savings tools listed in parts (ii) to (v) of this question.
(ii) Savings from the implementation of the $1,000 wages policy were written into agency budgets and disclosed by agency in Appendix 3 of the 2017-18 Mid-year Review released on 20 December 2017 (see pp. 87-89). Total savings over the period 2017-18 to 2019-20 were $234.7 million ($27.2 million in 2017-18, $73.8 million in 2018-19 and $133.7 million in 2019-20).
(iii) Savings from the implementation of the freeze on Salaries and Allowance Tribunal salaries determinations were written into agency budgets as part of the the 2017-18 Budget released on 7 September 2017. Total savings over the period 2017-18 to 2019-20 were $8.9 million ($1.3 million in 2017-18, $3 million in 2018-19 and $4.6 million in 2019-20).
(iv) The VTSS is the largest such scheme implemented in the Western Australian public sector. It is on track to deliver the planned 3,000 separations but over a longer period. At 30 June 2018, a total of 2,311 separations had been finalised. Separation costs in 2017-18 totalled $280 million. Savings flowing from centrally-funded separations over the three years to 2019-20 total an estimated $380.9 million ($59.9 million in 2017-18, $159.7 million in 2018-19 and $161.3 million in 2019-20). As with previous separation programs run across the sector, agencies that self-funded separations (from within existing budget settings) have been able to retain all savings to reinvest in service delivery.
(v) Savings from the implementation of the 20% reduction in Senior Executive Service positions were written into agency budgets as part of the the 2018-19 Budget released on 10 May 2018. Total savings over the period 2017-18 to 2019-20 were $65.2 million ($13 million in 2017-18, and $26.1 million in each of 2018-19 and 2019-20).
(c) The savings in (a) and (b)(iv) include the cost of separations and compensation payments, where payable. Separation and compensation costs for the reduction in Senior Executive Service numbers (item (b)(v)) are not held centrally by Treasury (as these separations were paid for by agencies from existing budgets and not funded from a dedicated central-funding source).
(d) The savings detailed in answers (a) and (b) exclude the allocation of public sector reform funding provided to the Department of the Premier and Cabinet.
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