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News News State budget slashes public sector funding

While the State Government was busy promoting its increase in funding to the non-profit sector in last week’s state budget, it was far quieter about its plans to slash public sector spending by more than $800 million.

This will be done through $300 million worth of cuts to public sector programs and a further 5% “efficiency dividend” for Government Trading Enterprises such as Water Corp and Homeswest,  amounting to an expected $515 million funding cut. A large portion of the cuts are expected to be met by reducing wage costs and shedding jobs.

Unions have strongly rejected Treasurer Christian Porter’s assertion that the cuts will not undermine services. UnionsWA Secretary Simone McGurk said Porter’s statement was completely without evidence. “It is entirely unbelievable that you can cut programs, staff numbers and pay without impacting on service standards.

“This move is completely contrary to what Western Australians expect from their Government. We need to invest in quality services not slash funding and make it more difficult to attract and retain the people who provide those services.”

Unions have said that the Government’s move to re-direct funding from the public sector to the non-profit community sector, without making any moves to guarantee much-needed increases in community sector wages, is clear evidence of their plan to deliver services on the cheap. Workers in the community sector are paid on average around 30% less than their counterparts in the public sector with 89% of these workers earning less than $51,000 a year.

“A large part of the funding given to the community sector in this budget needs to go to wages. Unions have repeatedly demanded that the Government quarantine part of the funding increase for wages and yet they have refused to do this,” said Ms McGurk.

“This Government is taking advantage of the low paid workers in the community sector in a cheap attempt to save a few dollars and at the expense of service standards.”

“The funding in this budget for the non-profit sector has unfortunately come at the expense of the professional public sector and at the expense of service standards.”

Industry representatives have also voiced concern about the effects of the cuts. The CEO of the WA branch of the Urban Development Institute recently  warned that the budget cuts could have the unintended effect of reducing efficiency. Debra Goostrey has warned that the cuts could blow out approval waiting times thereby slowing down new development. “There may be cuts in areas that are essential for improving the timeline for approval processes and other key aspects of development… You can end up being less efficient in the outcomes even if you meet a budget target.”

Article from The Australian Financial Review (23rd May 2011):

pdf FinReview_Alarm_bells_at_WA_budget_cuts.pdf

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