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The spotlight is on the Efficiency Dividend, but to what avail?

Wednesday, June 29, 2016

Australians go to the polls on Saturday 2 July 2016 to elect their next federal government. Amongst the economic and social welfare claims and counterclaims the Efficiency Dividend, which still applies to 'technical agencies' such as collecting institutions, has become a campaign issue.

In April we reported on some recent impacts of the Federal Government's Efficiency Dividend on the National Film and Sound Archive and the National Library of Australia.

Click here to read our 'From Deadline 2025 to Trove under threat' news item, which contains explanations of the Efficiency Dividend and provides links to our coverage of the issue since June 2011.

Just as we posted our news item in April a new report on the impacts of the Efficiency Dividend was released by the Community and Public Sector Union. Titled A Portrait of Failure: ongoing funding cuts to Australia's cultural institutions reveals how, after a short reprieve in 2011-12, these cuts have continued to disable collecting organisations in fulfilling their public roles. This de-funding is particularly painful at a time when these organisations are expected to direct large portions of their budgets to making their collections available online.

Click here to access A Portrait of Failure online

Yesterday's Canberra Times ran an article by journalist Noel Towell which presents Labor Party estimates of expenditure by Commonwealth Departments in order to deliver minimum services through outsourcing. It is argued that this high level of outsourcing is in part attributable to the Efficiency Dividend. 

Click here to read 'Public service blows $7.6 billion a year on contractors'.

The article overstates the Labor Party position on the Efficiency Dividend in FY 2016-17 though. Labor Party quotes on the matter, including in the Towell article, talk of not increasing the measure rather than abolishing it.

Click here (scroll towards the bottom) to read a doorstop interview on the same day with Bill Shorten, Leader of the Opposition, about historic Labor support for the measure and about reducing consultant costs through alternative efficiency policy while retaining the Efficiency Dividend.

Several days earlier an article with comments by an Australian National University economist, Dr Racionero, reports that the efficiency dividend is simply a budget cut which disproportionately harms smaller agencies, such as collecting organisations. Dr Racionero also states that these smaller agencies are more efficient than larger ones, by definition. In a quick survey of political positions in the article, sitting Labor candidate, and former Economics Professor, Andrew Leigh, only talks in terms of not increasing the level of the Efficiency Dividend rather than abolishing it, if elected on Saturday. The current rate is 3%, more than double the level it was originally designed to be in 1987.

Click here to read 'Is the Commonwealth efficiency dividend really that efficient?'

Perhaps the newly announced NSW Parliamentary Inquiry into museums and galleries will yield the most useful updated empirical evidence about the disproportionate impact of the Efficiency Dividend on these beleaguered 'technical agencies' by year's end, as examining the NSW state-based equivalent is amongst the Terms of Reference.

Click here to read our news item on this titled 'Have your once in a generation say by August 14'

For the National collecting institutions it looks like the Efficiency Dividend is here to stay, despite the recent heartfelt pre-election rally 'round.


Posted on Wednesday, June 29, 2016 (Archive on Monday, January 01, 0001)
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