The Coalition has said it would improve the budget bottom line over the next four years by roughly a billion dollars, by driving down spending on the public service.

Treasurer Josh Frydenberg says an increased "efficiency dividend" placed on public service agencies would raise more than $2 billion.

An efficiency dividend is a mechanism, introduced by the Hawke Labor government in 1987, that cuts public sector budgets by a certain percentage each year.

Currently the efficiency dividend is 1.5 per cent, but if the Coalition were re-elected it would increase that to 2 per cent for the next three years.

Mr Frydenberg says the efficiency dividend will cover the cost of every policy the Coalition has announced during the campaign, and leave the budget better off.

"What we are doing is offsetting that spending with an increase in the efficiency dividend by half a per cent, which will raise more than $2.3 billion," he said 

"The annual departmental bill across the Commonwealth is about $327 billion. What we're saying is it will be reduced to about $324 billion, as a result of this additional measure."

The Coalition has submitted all of its policies for costing by the treasury and finance departments, while Labor intends to release its costings on Thursday.

Labor has pointed to cracking down on multinational tax avoidance and reviewing spending on previous government programs as the way it would pay for its policies.

But Shadow Treasurer Jim Chalmers said it was not important whether or not budget deficits under Labor would be larger, saying the quality of government spending mattered more.

"The most important thing here is not whether deficits are a couple of billion dollars each year better or worse than what the government is proposing," Mr Chalmers said. 

"What matters most is the quality of the investments. We'd be inheriting a trillion dollars in debt, and no plan to grow the economy the right way."

Mr Chalmers said Labor had "a better way" to make the public service more efficient: by cutting consultants and contractors.

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https://www.abc.net.au/news/2022-05-17/cuts-public-sector-spending-coalition-policy-costings-election/101072270