Government lifts efficiency dividend to meet surplus target
The Minister for Finance and Deregulation, Senator Penny Wong, has that Australia's 'efficiency dividend' -- the ratio of agencies' reduction of running costs to budget – will be lifted from 1.25 percent to 1.5 percent for two years in 2011/12 and 2012/13, before it is returned to 1.25 per cent for 2013-14 and 2014-15.
Senator Wong said the measure will deliver additional savings of $465 million in the 2011-12 Budget, and an overall saving through the efficiency dividend of $1.1 billion over the forward estimates.
She said the savings would help reach the Government’s target of bringing the budget back to surplus in 2012-13.
“The Government is restraining spending and building surpluses to ensure we are not adding to price pressures arising from the investment boom in the years ahead,” Senator Wong said.
Senator Wong said it was the Government’s “strong expectation” that agencies would be able to meet the temporary increase in the efficiency dividend without resorting to forced or compulsory redundancies.