WA budget cuts a blunt hit to departments under the pump

By Jason Whittaker

October 8, 2014

Public servants in Western Australia are bracing for more cuts to their ranks, with one former bureaucrat concerned another blunt hit from efficiency dividends will strip the service of capacity and experience.

Premier Colin Barnett said yesterday the state’s worsening financial situation — exacerbated by a fall in iron ore prices — had blown a $1.5 billion hole in the budget and the public service will be impacted:

“In the longer-term future there’ll be some cutbacks on both recurrent and capital spending. We have to look at cutting government spending and, to the extent possible, the burden will be borne by the public sector.”

Barnett wouldn’t be drawn on whether another efficiency dividend would be applied to government departments. The Premier’s office told The Mandarin an announcement would be made “in due course”.

The public sector union estimates 7500 jobs have gone from state services since 2010 under annual efficiency dividends of around 3%, including 1000 workers in the last financial year. It’s warned the government cuts to the bureaucracy can only go so far and service delivery will suffer.

David Gilchrist, a former state assistant auditor-general and now professor at the Curtin Business School, is concerned the “nuances of each department” won’t be considered in another cost-cutting drive.

And by ring-fencing direct service delivery from the cuts — as the government has always instructed — departments will need to eat into administrative capacity, making the service less responsive to the needs of government. “That means that director-generals and ministers will get less advice and are less able to respond to decision requirements in a logical and thoughtful way,” Gilchrist told The Mandarin today.

Gilchrist flags “quite a dramatic loss in intellectual capital that can see a real ongoing difficulty in capacity in government as a result … The medium- to long-term impact can be substantial.” Service delivery could then be “inadvertently effected”.

A “more logical and mature response” would be to take an “agency-by-agency view”, he says.

The Community and Public Sector Union/Civil Service Association says public servants already bore the brunt, accepting wage packages with minimal increases in the coming years. State secretary Toni Walkington said in a statement:

“As Western Australia’s population continues to expand and demand for public services that are delivered by government increases it doesn’t make sense to reduce staff levels that are required to do the work.

“Premier Barnett claims the private sector is more efficient yet has earmarked over $200 million of taxpayers’ funds to improve the capacity of non-government organisations to deliver public services. Retaining services in the public sector would have avoided this costly exercise.”

While Walkington says the government should be looking elsewhere for cuts, the Premier says there will be no changes to the infrastructure projects already committed to, including the airport rail link.

Opposition Leader Mark McGowan says the government is “softening up people for more broken promises”.

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