Budgets reveal minds biased against the public sector

Sue Simpson
Research Officer

Continuing cuts to public education in NSW stand in contrast to a positive outlook for the economy.

The NSW Coalition Government chooses to prioritise reducing taxes ahead of the public sector: all remaining Intergovernmental Agreement taxes will be abolished from July 1, 2016 and WorkCover premiums will be cut by 5 per cent on top of “the 12.5 per cent premium reduction to business in last year’s cycle” (but with no improvements in access for injured workers to compensation).

The Coalition supports the principles of a more equitable school funding formula and has kept to its commitment to fund its share of the National Education Reform Agreement (Gonski agreement). But how is the State Government funding its share?

The 2013-14 Budget announced additional cuts to the public sector (the 1 per cent “efficiency dividend” across the public sector to take effect from the 2015 –16 financial year) and changes in the level of student fees and subsidies under the Smart and Skilled policy to pay for implementation of the Gonski reforms in public and private schools. This is in addition to earlier announced public sector cuts including $1.7 billion of public education cuts.

In the lead-up to the state election the Coalition’s commitment to funding individual public schools could be assessed against the impact of the loss of out-of-school support, the gutting of TAFE, the increasing cost of vocational education and training and a weakened public sector. The very students who will benefit most from the injection of National Education Reform Agreement funding are the ones who rely the most on the public services that have been and will continue to be cut.

Budget papers reveal that job losses in the public sector have been significant. Between June 2012 and June 2013 “the number of non-frontline staff decreased significantly by 25.9 per cent (-9,573) … through efficiency gains in Health, Education, Transport and Central Agencies”.

In the same year and despite enrolment increases, public primary and secondary education had 450 fewer equivalent full-time employees.

The Coalition supports the National Disability Insurance Scheme but will be withdrawing totally from the direct provision of disability services leading to the loss of 10,000 public sector positions.

The Government implemented 6789 redundancies as at December 31, 2013.

Department of Education and Communities Secretary Michelle Bruniges confirmed at this year’s Budget briefing that public education’s contribution to the Budget savings over the term of the Coalition Government can be “conceptualised” as $1.7 billion or the equivalent of 1200 positions over four years.

In public schools the Budget cuts have already contributed to the loss of at least 200 consultant positions, more work being done by teachers that would have been conducted by out of school support staff, and a widening of the gap between the standard of facilities in public and private schools.

In TAFE colleges, the Budget cuts have contributed to the loss of at least 800 teaching positions including forced redundancies; increases in student fees and cuts in courses and course hours. The TAFE budget cuts are continuing with more positions being lost, more redundancies and more courses and hours being cut. That’s even before the impact of the Smart and Skilled privatisation policy.

Capital funding continues to languish despite the observations of the Gonski Review about the need for substantial injections of capital funding. This year’s Budget provided $235.6 million to primary schools and $163.5 million for secondary schools for a total of $399.1 million. Last year, the capital expenditure allocation for government primary and secondary schools was $420.2 million.

The capital budget continues to be inadequate to bridge the gap between public and private schools. This is an area that the NSW Gonski agreement does not address, even though underinvestment in capital works and maintenance was identified by the Gonski review as a significant problem. Further there is a significant need for extra permanent classrooms and schools in the inner city and lower north shore in particular.

NSW Treasury figures published in a report conducted by accounting firm PwC for NSW Infrastructure in 2012 revealed capital education expenditure (excluding Building the Education Revolution funding) reached a peak in 2009–10 of around $780 million. Capital expenditure under the Coalition Government has been at least 40 per cent less each financial year.

Public school enrolments are expected to increase by 70,000 to 2021 from 2011 enrolments. New schools will be needed in “emerging growth areas”. The Budget papers echo the sentiments of NSW Infrastructure that existing assets can, however, be adjusted “to technological advances” and made more efficient, rather than justify any knockdown rebuilds.

The TAFE budget provides for a cut of $5.1 million or 0.27 per cent over the revised budget 2013 –14. It forecasts a decline of 22,433 students in 2014 over the 2013 actual numbers (4 per cent decline). This enrolment forecast is 5000 fewer TAFE students than in 2011.

TAFE capital funding expenditure falls by $13.5 million or 15 per cent to $76.8 million.

With the introduction of the Smart and Skilled policy and the receipt of additional funding under the Skills Reform National Partnership, contestable vocational education and training (VET) funding has increased by 99.2 per cent to $653.3 million (from $447,406 million in last year’s Budget).

Budget Estimates show that VET funding will cover 457,955 enrolments entitled to government funding (356,872 at Certificate III and below and 101,083 at Certificate IV and above). Students with a disability are estimated at 48,377 and Indigenous students at 36,809. These last figures show the extent that TAFE provides for the most disadvantaged.

Cuts over four years

Agency heads have had the responsibility to cut expenditure in their portfolios under the guise of “efficiency dividends”:

• 1.5 per cent in 2011–12
• 1.5 per cent in 2012–13
• 1 per cent 2013–14
• $150 million in 2014–15
• 1 per cent from 2015–16

There has been an ongoing “Labour Expense Cap” of 1.2 per cent each year from 2012–13 with the purpose to “limit the growth of employee and contractor expenses, with the aim of avoiding additional labour expenses”. For the third year, teachers in schools, nurses in hospitals and sworn police officers have been excluded from the “Labour Expense Cap”. Teaching service consultants, non-teaching support staff, TAFE teachers and Corrective Services staff are not exempt.