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Public sector hit hard by Budget shortfall

Federal Budget 2013

The Australian public expect to see greater fiscal responsibility and efficiency within the State and Federal Public Sector concerning the delivery of essential public services, according to Grant Thornton Operational Advisory specialist Rory Gregg.

The anticipated budget shortfall is likely to lead to considerable cuts and inevitable job losses across the sector over the next twelve to eighteen months. Those reductions could be in the order of 15-20% of the existing workforce over the next 2 to 3 years, according to leading accounting and advisory firm Grant Thornton Australia.

According to Grant Thornton Public Sector - Workforce Lead Partner Rory Gregg, the long term prospects for those working in the Public Sector are likely to be uncertain as the efficiency dividend begins to materialize over coming months and years.

“The forecasted savings and efficiencies slated for the sector will not be realised without the need to consider a raft of significant and lasting reforms and productivity improvements to the Public Sector workplace,” he said.

Mr Gregg argues that whole of sector reform and workforce productivity are two of the most critical challenges facing the Australian Public Sector, at both a Federal and State level.

“The evolution of technologies and other enhancements in the way organisations operate will inevitably led to the sector having to consider a raft of new and innovative performance improvement opportunities that will see technology and public private partnerships taking a greater role.”

“As a consequence, the Public Sector is going to have to consider a range of workforce productivity reforms and improvements including the use of outsourcing and possibly offshoring certain aspects of service delivery functions in order to bring the sector up to acceptable levels.”

“This means the actionable and measurable targets relating to workforce productivity improvement need to be considered, including their role. Undoubtedly, these decisions are going to be unpopular with unions and workforce advocates across the sector.”

Mr Gregg explains that if the Public Sector is to “pivot” and respond quickly to these immense cost pressures, it is going to have to consider a range “unconventional” alternatives to how public services are delivered to citizens - particularly, within rural and isolated regions of Queensland.

“Health and education are likely to be the most significantly impacted. Undoubtedly, the use of technologies such as the NBN and outsourced services will need to play a far more significant role in how these services are delivered in the future,” he said.

Not surprisingly essential reform of the sector will undoubtedly lead to significant reductions in headcount and jobs for many of the larger agencies such as Health and Education and possibly Human Services as the sector begins to make the changes necessary.

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To speak with Mr Gregg or for further information please contact:

Helina Lilley
National Public Relations Manager
+61 2 8297 2421
0437 725 520

About Grant Thornton Australia Limited
Grant Thornton Australia provides audit, tax and advisory services to dynamic, growing organisations and is a single national firm, with over 150 Partners, more than 1,200 people across Australia and national turnover of AUD $232 million. Grant Thornton International is the fastest growing international accounting network in the world, with a global turnover of US$3.7billion and more than 30,000 people, and was recently named 2013 Network of the Year by the International Accounting Bulletin.