efficiency dividend
{{Public finance}}
{{Finance sidebar |public}}
{{Use Australian English|date=January 2018}}
{{Use dmy dates|date=January 2018}}
An efficiency dividend is an annual reduction in resources available to an organization.{{cite web|title=efficiency dividend|url=http://www.businessdictionary.com/definition/efficiency-dividend.html|website=www.businessdictionary.com|publisher=WebFinance Inc|accessdate=5 January 2015|archive-date=30 December 2014|archive-url=https://web.archive.org/web/20141230162748/http://www.businessdictionary.com/definition/efficiency-dividend.html|url-status=dead}} 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.{{cite news|title=Agencies exempt from the boosted efficiency dividend|url=http://www.canberratimes.com.au/national/agencies-exempt-from-the-boosted-efficiency-dividend-20111128-1v15w.html|accessdate=5 January 2015|work=The Canberra Times|publisher=Fairfax Media|date=29 November 2011}}
History
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.{{cite web|last1=Horne|first1=Nicholas|title=The Commonwealth efficiency dividend: an overview|url=http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2012-2013/EfficiencyDividend|website=www.aph.gov.au|accessdate=5 January 2015}}
Controversy
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.{{cite web|title=REPORT 413: The Efficiency Dividend: Size does matter|url=http://www.aph.gov.au/parliamentary_business/committees/house_of_representatives_committees?url=jcpaa/efficdiv/report.htm|website=www.aph.gov.au|publisher=Commonwealth of Australia|accessdate=5 January 2015}}
Critics have described the efficiency dividend as a blunt instrument,{{cite news|last1=Stone|first1=Christopher|title=In government, small isn't always efficient|url=http://www.canberratimes.com.au/national/public-service/in-government-small-isnt-always-efficient-20140630-3b1qq.html|accessdate=5 January 2015|work=The Canberra Times|publisher=Fairfax Media|date=1 July 2014}} a false economy,{{cite news|last1=Hutchens|first1=Gareth|title=Why this obsession with cutting public service jobs?|url=http://www.canberratimes.com.au/business/why-this-obsession-with-cutting-public-service-jobs-20150104-12h1nj.html|accessdate=5 January 2015|work=The Canberra Times|publisher=Fairfax Media|date=2 January 2015}} and lazy budgeting.{{cite web|last1=J|first1=Samuel|title=The Government's efficiency dividend|url=http://catallaxyfiles.com/2011/12/16/the-governments-efficiency-dividend/|website=catallaxyfiles.com|accessdate=5 January 2015}} Smaller agencies have also highlighted the difficulty in finding such savings.{{cite web|title=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|url=http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_Committees?url=/jcpaa/efficdiv/subs/sub54-2.pdf|website=www.aph.gov.au|accessdate=7 January 2015}}