By Julian Bajkowski

Federal finance minister Penny Wong has laid the ground for a fresh round of public service cost cutting in the May Budget as the Gillard government anxiously hunts for ways to trim federal spending without firing bureaucrats.

In a statement released on a public holiday and April Fools Day, Senator Wong said that half-year results showed that public service spending on air travel had decreased by 22 per cent “compared to the same time last year” and that travel volume was down a corresponding 17 per cent.

According to Senator Wong the amount spent by government agencies on travel decreased by $54 million to $193 million.

The highly publicised pursuit of reductions in government air travel has been a key imperative of Finance as it seeks to trim day-to-day operational costs in a way that can be understood by the wider public.

Senator Wong previously flagged the removal of business class seating as a visible way to hack down costs, a move resented by some senior public servants.

However behind the high-flying rhetoric, Finance has been fighting a far less public battle to inject competition for its travel dollars to Qantas’ dominance in bookings through measures including requirements to choose the best fare available.

More mobile public servants have traditionally been biased towards using Qantas because of the perception that the airline offers a higher level of service through access to its airport lounges and flexibility around changing bookings.

However the appeal of Qantas’ services has diminished over recent years as the airline continues to sweat its ageing fleet of noisy Boeing 767s on key runs in contrast to the newer aircraft of competitors.

Virgin has over recent months intensified its efforts to lure across public sector travellers through the promotion of its upgraded airport lounges that are regarded as a key part of the offer to business travellers.

The government is also attempting to unseat travel agents from the federal balance sheet by getting public servants to book directly.
Senator Wong said the government was “committed improving efficiencies in the public service” and the reductions in travel were “evidence of the real savings being made”.

“These savings have been achieved by booking domestic travel further in advance, selecting lower priced less flexible fares and using online booking tools rather than a travel consultant,” Senator Wong said.

The pressure to reduce travel represents a significant opportunity for networking companies that offer high-quality video conferencing be cause they can potentially sell more equipment or upgrade existing facilities to keep bureaucrats on the ground.