Labor's efficiency dividend hike could cost 5000 public sector workers' jobs, their union fears.
That's little consolation for public sector workers who face the slashing of up to 20,000 jobs under a coalition government, the union says.
Community and Public Sector Union (CPSU) national secretary Nadine Flood said the government's move to lift the efficiency dividend from 1.25 to 2.25 per cent for three years was a slap in the face.
She said the government should reconsider this "awful" decision.
Based on budget figures and average public sector salaries, the CPSU estimates this measure could lead to over 5000 job losses and a reduction in services.
"The coalition's plan to cut 12,000 to 20,000 public sector jobs may be worse, but that's little consolation for public sector workers who expect the ALP to provide a positive alternative to the Liberals' slash and burn," she said in a statement.
Finance Minister Penny Wong said the long-running efficiency dividend on public sector agency budgets would be lifted one per cent for the next three years to produce $1.8 billion in savings.
Advice from the Department of Finance was that most agencies could absorb this temporary increase without sacking staff, the minister said.
Savings could be achieved through non-staff cost savings, natural attrition and voluntary redundancies, she said.
"The government continues to make it clear that it expects agencies not to resort to rounds of forced redundancies in order to meet these targets," she told reporters in Canberra.
The efficiency dividend is an annual funding reduction for Commonwealth government agencies, designed to reduce operating costs and lift efficiency.
It was introduced in 1987-88, initially for three years, at the rate of one per cent.
Greens leader Christine Milne said the government had resorted to the old scapegoat of cutting public sector spending instead of fixing structural flaws in the mining tax or reducing fossil fuel subsidies.
"This is Kevin Rudd just taking over yet another of Tony Abbott's policies," she told reporters in Hobart.
"Tony Abbott came out and said he would slash the pubic service by at least 12,000 if not more. And here is Kevin Rudd saying let's impose a further efficiency dividend and that is code for jobs lost and services slashed."
