Efficiency measures to apply to Commonwealth payment
From 1 July 1996, an efficiency dividend will be taken from Commonwealth Own Purpose Outlays (COPOs) and Specific Purpose Payments (SPPs).
The new measure applies an efficiency dividend to any payments which are of a running cost nature but which have not previously been required to provide an efficiency dividend. The efficiency dividend is set at 3 per cent in the first year, with an annual 1 per cent to apply cumulatively thereafter.
These new arrangements do not apply to any COPO or SPP which is a personal benefit payment or a one-off addition to outlays of a capital nature or which has been the subject of savings equivalent to or exceeding the level of the efficiency dividend.
The new arrangements apply from 1 July 1996, but will be delayed where commitments or agreements have already been entered into. In these cases, the new arrangements will be put in place as soon as possible.
Public hospital funding under the Medicare Agreements is also exempt. However it is expected that efficiency gains in the public hospital sector will be taken into account during renegotiation of the Medicare Agreements.
In recognition of the Government's role of national leadership in medical research, no efficiency dividend will be taken from medical research funding, with the exception of the national casemix development programme.
The total effect of the measure on the portfolio is as follows:
The Movement to Award Wages Supplementation Programme
The Movement to Award Wages Supplementation Programme will cease from 20 August 1996. However, the Government recognises that a number of existing industrial cases have begun in the expectation that funding will be made available to cover increased operating costs arising from movement to awards.
As a result, claims from cases which began before 20 August 1996, and where the industrial process is expected to be finalised before 20 February 1997, will be considered. Claims for supplementation of costs arising from these will be processed only during 1996-97.
Contact: Helen Evans, Assistant Secretary, Budget Information and Evaluation Strategies Branch, Department of Health and Family Services, (06) 289 8040