The efficiency dividend – or not

Working as we do in the private sector, there are various public sector anomalies that we just don’t get. One of these is the so called ‘Efficiency dividend’ that year in year out federal collecting institutions, e.g. the National Gallery, the Australian War Memorial, the National Library etc, seemed to get pinged with. Certainly from our perspective we can’t see any more efficiencies, and all that it appears to achieve is a reduction in staff and services.

Well, now this has been confirmed as told in a fascinating article published in Public Space; The Journal of Law and Social Justice (2009) Vol 3, and available on line.

The article details that the efficiency dividend was implemented by the Hawke labour government in 1986, as a short term budget cut designed to require agencies to look for efficiencies in their operations. But here we are in 2009 with the ‘dividend’ still being ‘paid’ to the government at an average of a budget cut of 1.25% per annum.

And of course as the efficiencies have long since been achieved, what it really means is a budget cut year in year out. The result is what we have been seeing, namely a diminution in staff and services, and this article spells out in graphic detail what these are. The information in it is drawn from a Parliamentary inquiry into the ongoing effects of the ongoing dividend.

Its’ effect crosses many parts of the institutions operations, from reducing and delaying digitisation work, cutting staff (to a level where the National Library states that in 3 years time the effect of the dividend will mean through resulting staff cuts ‘it will not be a viable institution’) , limiting pay increases and thus losing skilled staff, and curtailing touring exhibitions (the National Gallery has reduced theirs from 14 to 9 over the last few years).

It’s a depressing article, the one hope being that the Parliamentarians that heard the evidence at their inquiry are finally going to remove the dividend. Given that Rudd promised as part of his election platform that if elected he would cut an additional 2% from agency budgets to ensure efficiencies, I fear the future for collecting institutions is looking pretty bleak.