Back to Work and Back to Basics: An Efficient Government for all Australians
Address to the Menzies Research Institute
Monday, 3 March 2025
*CHECK AGAINST DELIVERY*
A Lack of Respect Leads to Waste
Milton Friedman once described four ways people spend money.
If you spend your own money on yourself, you will consider both how much it costs and how much you’re going to get - you are the most disciplined purchaser.
If you spend your own money on someone else, it’s different. The content of what you buy might matter less than what you can afford to spend on them.
Spending other people’s money on yourself means you’re probably going to enjoy yourself.
And spending other people’s money on other people means you don’t care about the cost or what they get. And that's the Government.
As politicians, we need to be better than Friedman’s analogy.
When we consider Government spending we should always have a mind to the way in which that Government got the money in the first place.
Every dollar the Government spends has to be earned first by an Australian worker.
This year the average Australian taxpayer will provide $23,756 in taxes. That is money that they otherwise could have spent covering the rising cost of food, housing or energy.
Instead, they provide it to Government in the hope that it is respected, and spent in their interest for a greater outcome than they could achieve on their own.
That’s the deal. They’re the terms and conditions of the ultimate social contract between a government and its citizens.
Sadly, last week in Canberra we were provided with example after example of the Government falling into Friedman’s trap; a lack of care, or a lack of respect, for the work that went into earning the taxes they spend.
At Senate Estimates, we heard about a department that spent nearly an Australian’s entire year of tax contribution on a single desk for one public servant.
You know how I know that those particular bureaucrats don’t respect the Australian taxpayer? That $20,000 desk is now in storage.
Having been wasteful, they now treat that waste as if it has no value. I bet the taxpayer who paid for it - any one of you - would disagree.
What is worse, that desk was part of a $56,000 bespoke furniture renovation for that one public servant - one who is no longer working in the service.
Unfortunately, this is not an isolated incident.
Whether it's big dollars on wrong priorities, like $500 million on a Voice Referendum, or the little things that show a blatant disregard for spending other people's money, like $620,000 for a speechwriter to make a Minister sound "more empathetic", every dollar adds up.
The appetite is insatiable.
In Canberra, there is growing sense that the taxpayer will be able to provide an unlimited line of credit.
Too often, departments and agencies, or their civil society stakeholders, provide political leaders with a one dimensional solution to every problem - more money.
If we spent another $100 million, or had an additional 100 bureaucrats working on a problem - from education and health to defence and foreign affairs - that problem will be solved.
But of course, it’s not their money. It’s taxpayer’s money.
And a lack of sensitivity for the price means that there is also a lack of sensitivity for the outcome.
This has to stop.
It is time Government as an organisation made the same hard choices that every Australian has made for the last three years of Labor’s cost of living crisis.
What can you do without? Where can you find savings? How can you do more with less?
Anyone who has run a business - or indeed a household - has had to answer these questions.
Now is the time to have the people spending our money on someone else face these questions as well.
And it's not just about efficiency in current programs. It must be about effectiveness.
Does it work? Is it solving problems that Government ought to solve?
A Dutton Liberal Government will make spending choices matter.
Choices Matter
The purpose of Government is to provide the right resources to achieve the right outcomes, not to provide the right answer to every wrong we face.
We need a Government that considers the Budget as something to be constrained and conserved, not a book of blank cheques.
If a Government respects that the money that they are provided is provided in trust, then it also understands that it will need to make choices with that money.
As Liberals, we know that our spending capacity should only match what we can afford to take in revenue or borrow responsibly.
There are priority pressures on spending that are created by the challenges of the day.
Defence in an increasingly dangerous world, or Aged Care as we confront our changing population.
Sometimes, priority spending decisions require a Government to increase funding in some areas beyond the growth of the economy or revenue.
We see it in our own lives.
Someone might decide that a private school education for their children is a priority to set them up for a better future. But for many families, that does not come without sacrifices; inevitably other expenditures get trimmed back or abandoned to create room.
They are often hard decisions. But the ability and commitment to make those decisions is how Budget pressure is reduced.
If one area of Budget spending grows faster, it follows that you need to find some other areas that can be grown slower, reduced, or removed.
How do we create efficiency by achieving the same or better outcomes for lower cost? How do we provide benefits to citizens but reduce the fiscal footprint?
This is the key to structural fiscal balance, and the cornerstone of our national economic resilience.
An important way to alleviate government spending pressure is to get the settings right to grow a strong economy; you can lessen demand on public resources if you create prosperity elsewhere.
This is why low unemployment is inevitably an objective of any responsible government; it helps with both sides of the ledger.
More Australians in work leads to increased revenue, but it also means fewer Australians drawing down on welfare payments.
Understanding this basic premise, you can see why the former Coalition Government was so clear-eyed about securing employment as a priority of our pandemic response.
Jobkeeper kept a link between workers and their workplaces to ensure we didn’t see long term lags in unemployment rates.
We saw the benefits. Extraordinarily, by the end of the last Government, welfare rates were down to pre-pandemic levels.
Incidentally, the only reason the former Coalition Government was able to tackle the greatest crisis of our generation so aggressively was because of our good fiscal health.
After years of tough decisions, the 2018-19 Final Budget Outcome recorded an underlying cash deficit of $0.7 billion - 0.0 per cent of gross domestic product, confirming a balanced budget for the first time since 2007 - proof these disciplines deliver economic strength and resilience.
2025 presents very different challenges.
But how can those challenges be adequately addressed without the fiscal discipline required to make hard decisions?
How do we ensure that taxpayer money is spent efficiently on the right priorities that deliver an effective government?
Let me give you an example: Labor have chosen to prioritise $13.7bn for mining production credits. That's the equivalent of all the tax paid last year by Australia’s largest tax payer, BHP.
As production credit is a payment to private sector miners to do what they were going to do anyway, you would be right to question whether this is an effective government policy.
This fails both tests; it is neither efficient nor effective. Spending unnecessary money for an outcome that was likely to occur anyway.
In contrast, the Government’s own analysis points to the need for more Defence investment sooner. But Labor has failed to deliver.
How have they prioritised wasteful spending over a necessary priority?
Because under Labor, simple guardrails that could have helped even ill-disciplined Treasurers and Finance Ministers are gone. It distorts priorities and Budget choices.
Over successive Budgets, Anthony Albanese and Jim Chalmers have spent far more than they have saved; the most recent MYEFO included $12 of spending for every $1 saved.
The result has been inflationary spending, and a lack of respect for the taxpayers’ money.
A Dutton Liberal Government will bring these fiscal rules back, and get back to basics.
Back to Basics
What does this mean in practice?
First, we will return to the Coalition’s tried and tested rule that all new spending is offset with an equal or greater reduction in expenditure.
Budgets need to be consistently evaluated and prioritised to ensure they remain the best use of taxpayers’ money.
Again, it's not just about delivering programs efficiently for the taxpayer - more output for less input. If a program is not effective, it doesn't matter how efficient it is, it’s a waste of resources and it should go.
These are often tough decisions. But if we are serious about ensuring spending is lower and the economy is stronger, Government can’t delay or brush off tough decisions.
Second, our Government will stop the growth in public servants.
The Commonwealth has and must maintain its world-class public service.
However, we will ensure Government costs are as low as possible without impacting the delivery of essential services or policy development.
In Labor’s first five months they added almost 8,000 new public servants.
Now that number has ballooned to 36,000 new public servants. This growth is both inefficient and ineffective.
The Department of Health has increased by 40% but bulk billing rates have collapsed.
Climate Change, Energy, the Environment and Water has more staff but environmental approvals take longer and emissions have increased.
Services Australia has thousands of new workers, but both processing and call wait times have blown out.
A bigger public service does not necessarily mean a better service to the public.
Finally, our Government will adopt a tax-to-GDP cap, and stick to it.
We know you cannot tax your way to prosperity.
But Labor ditched the rule in its very first Budget and by doing so removed a handbrake.
Now their strategy for budget repair is simply higher taxes, more borrowing, and using bracket creep to prop up its bottom line.
Budget rules and guardrails aren’t ideological frolics, they are economic imperatives.
The private sector understands this. The Business Council of Australia has said the government needs to “impos[e] more discipline to curb growth in spending. This includes via the adoption of fiscal rules.”
Fiscal discipline contains inflation and limits taxation. Importantly, it also stops government crowding out the private sector.
It's not just about the encroaching size of the public service. It's also about changes to how the public service works; how it delivers on the promise of its name.
At a time when Australia’s anaemic productivity is a handbrake on economic growth and prosperity, and public sector labour productivity is regularly identified as the most intractable component, the status quo is no longer an option.
A Dutton Liberal Government will bring our public servants back to work.
Back to Work
Last week, I asked one senior public servant about the rates of staff working from home in their department.
They responded by telling me they couldn’t give me the data, but from their own experience they themselves were most productive when working from home.
Interesting - but what about their team? Are they as productive when their boss is working from home?
Do they get the same leadership and guidance, or have the same productivity and collaboration? Do they get appropriately mentored or acknowledged?
A recent report from Stanford’s Institute for Economic Policy Research consolidated research on working from home and its impact on productivity.
One paper in the report found that regardless of perceptions for employees and employers about their own productivity, in reality these arrangements led to a reduction in productivity, with the worst being fully remote workers.
One paper found that after work from home arrangements were put in place, productivity fell by about 20%.
Time spent on coordination activities and meetings increased, but uninterrupted work hours shrank. Employees spent less time networking, and received less coaching and 1:1 meetings with supervisors.
And while one paper noted the savings for companies who sell their office space, this isn’t always possible in the public service.
Australian Bureau of Statistics latest data on working arrangements shows that the number of Australians usually working from home has declined for the last three years to 36%.
Large companies such as NAB, CBA, Flight Centre, Coles and Dell have all told their staff to return to the office.
These groups have cited the collaboration and productivity that working in the office brings to their teams.
While this trend has even carried over to the Labor Government in New South Wales, it has not been the experience of the APS.
In 2019, only 22% of APS Employee Census respondents worked away from the office or from home at least part of the time.
This increased to 53% in 2020 during the pandemic, and by 2022 was 55%.
According to the latest results, three years after the pandemic, it is now at 61%.
Part of our effort to bring Canberra’s focus back to serving the public must be to ensure that they are present.
While work from home arrangements can work, in the case of the APS, it has become a right that is creating inefficiency.
Work from home arrangements for public servants should only be in place when the arrangements work for the employee’s department, their team, and the individual.
This isn’t controversial.
It is a guideline that was worked and agreed by the Secretaries Board and reflects the considered view of all Secretaries and the Australian Public Service Commission in 2023.
However, this Government has given public servants a blank cheque to work from home. Led by the Community and Public Sector Union, Labor has made work from home a right for the individual, not an arrangement that works for all.
This is unsustainable.
There are plenty of public servants who know the current system is not working.
We know some departments and agencies are telling stakeholders not to schedule meetings on Mondays or Fridays as there will likely be no one in the office.
In one instance, a stakeholder travelled to Canberra only to be shown into a meeting room where they were greeted by all departmental participants dialling in from home.
One public servant told my office that one of their colleagues worked from home five days a week. They were frequently uncontactable and thus unreliable.
Why? Because while they were working, they were also traveling around Australia with their family in a campervan.
The challenges faced by Australia today are significant.
We have been in a per capita recession for seven consecutive quarters - the longest on record.
27,000 small businesses have closed - a record high.
We are in an era of significant geopolitical competition, facing significant security challenges. Yet we have become less cohesive and less safe since October 7 2023.
There are many talented, driven people in the Australian Public Service. And if elected, I want them to come back to the office with me to help solve these challenges.
Using existing frameworks, it will be an expectation of a Dutton Liberal Government that all members of the APS work from the office five days a week.
Exceptions can and will be made, of course; but they will be made where they work for everyone rather than be enforced on teams by an individual.
This is common sense policy that will instil a culture that focuses on the dignity of serving the public, a service that relies on the public to fund it, and a service that respects that funding by ensuring they are as productive as possible.
A public service that respects its resources and a Government that is disciplined in its fiscal management, we can deliver more effective and more efficient services for Australians.
Expecting more from Government is both reasonable and essential for a healthy democracy.
It doesn't require a new department, or a tech billionaire. But it does require a change of government, a restoration of disciplines Labor has abandoned, and a back to basics approach.
Under a Dutton Liberal Government, Australians will know that the taxes they pay are being spent in Australia’s best interests.