Remarkable cost-cutting performance from Queensland Government

Average input costs for Queensland Government activities appear to have declined by up to 5 per cent since mid-2012, based on State Accounts data from Queensland Treasury, assuming State Government activity mostly drives the State and local general government consumption implicit price deflator (i.e. price index) in the chart below. This average cost reduction would largely be associated with labour savings through leaner, less top-heavy bureaucracies. It confirms the Government’s remarkable performance in limiting expenses growth reported in the Mid-Year Fiscal and Economic Review (see my post from last week).

ipd_qld_sa

ABS data also show a drop in average input costs for State and local governments in Queensland (see chart below).

ipd_abs

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6 Responses to Remarkable cost-cutting performance from Queensland Government

  1. Craig Wilson says:

    Excellent post gene

    Sent from my iPhone

    >

  2. KT says:

    this could be a great vote winner for the current government. They are providing arguably the same for less cost. However, the LNP has been terrible communicating its ideas.

    I agree with Craig – its a great post

  3. Jim says:

    Gene

    Great post. It is good to see the State spending less on their inputs. This is a story the State should be promoting as they are turning the corner in controlling expenditure.

    It is a long time since I’ve thought much about the detail of measuring the components of State Final Demand, but I do remember that there are significant difficulties in measuring Implicit Price Deflators for Government due to difficulties in estimating output.

    I wonder if the significant downward trend in the Implicit Price Deflator is due to both lower prices for inputs and a result of declines in real expenditure by the Government?

    • Gene Tunny says:

      Thanks, Jim. Yes, indeed, the statisticians don’t bother measuring govt output and value government services at the cost of inputs, which is problematic obviously. I’m hoping my post will inspire someone at the Govt Stats office to unpack the IPD for govt consumption and work out what’s driving the reduction. Now they’re in caretaker mode they should have plenty of time!

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