WA workforce 'renewal': good for young, bad for capability?

By David Donaldson

January 6, 2015

A budget-saving program of “renewal” in Western Australia’s public service will open up opportunities for younger workers, the government says. But others question the capabilities of the workforce left.

The Barnett government will slash public service salary budgeting by up to 40% in many areas. The state’s budget outlook was revised down in December, predicting a deficit of almost $1.3 billion this year thanks to receding revenue as the price of iron ore falls.

The Public Sector Workforce Renewal policy will see savings “harvested” from agencies’ budgets when a public servant leaves their job.

For front-line employees such as teachers, nurses and police, this will mean the money available to pay for a replacement will be 10% less; for all other bureaucrats the cut will be 40%.

Savings will be calculated on an aggregate basis, meaning positions can be left unfilled to top up salaries in other areas. Casual staff and those on contracts of less than 12 months will not be covered by the policy. Agencies with fewer than 30 full-time equivalents will also be exempt.

The government is promoting it as an opportunity to rejuvenate the public service. Treasurer Mike Nahan insists the changes will not lower the capacity of the bureaucracy.

Nahan says the cuts will help attract younger people to the WA public service, stating that “not enough young people [are] coming into the public sector, and therefore not having a traditional career in the public sector, and we’re adjusting and making efficiencies ­accordingly”.

WA’s public service is older than most: the State of the WA Public Sector report released in November showed WA had the highest proportion of workers aged 55 or older compared to other jurisdictions. Public service commissioner Mal Wauchope has lamented that the average age of the SES in WA is 53.

But former WA assistant auditor-general Professor David Gilchrist thinks the cost-cutting approach amounts to “a very blunt tool” that will cause a decrease in the quality of services and advice to government.

Gilchrist, now at Curtin Business School, is concerned that while the relative insulation of front-line services from the cuts may play well politically, putting such a burden on behind-the-scenes staff will inevitably lead to administrative problems. The government “trades on the relative naivety of the general population about the public service” by taking such a position, he says.

A “program-by-program approach” would serve the public better, “particularly at a time when you need the best people on deck”. “There have already been several years of efficiency dividends, and that’s an extremely blunt instrument as well,” he told The Mandarin.

“The Barnett government expects people to swallow their spin that this will be an opportunity for young people …”

The public sector union estimates 9000 jobs have gone from state services since 2010 under annual efficiency dividends of around 3% and the cuts announced in October, including 1500 workers in the past three months.

“It’s the antithesis of good management,” said Gilchrist. A “much more mature and sensible” approach would be to “go through the budget line by line” to find areas that can be cut entirely with minimal impact.

The are also questions about how well the WA government managed the iron ore windfall during the mining boom.

“It’s a grave error for Treasury to rely on a boom-bust cycle,” said Gilchrist. “There could have been more effort put into planning what the money could be used for, knowing that the good times would not last forever. It’s not like we haven’t lived through this before.”

Toni Walkington, state secretary of the Community and Public Sector Union, argues the government is continuing to sacrifice public services as it struggles to manage its finances.

“The Barnett government expects people to swallow their spin that this will be an opportunity for young people but it is just another cut to public services,” she said. “There are no job opportunities or careers in a shrinking sector.”

In a statement about the hiring of new pilots for WA’s police helicopters, Walkington argued “offering reduced salary and employment conditions to new staff, particularly those who have a high level of skill and qualification, is going to seriously impact on the quality of people who apply”.

More at The Mandarin: WA state of the service: declining workforce, but strong indicators

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