Managing fiscal pressures

Significant budget cuts

4.8 Consistent with its medium-term fiscal framework, the Australian Government has committed to limiting annual growth in government spending to 2% until the budget returns to surplus.^[1] This policy requires public sector agencies, including the ALRC, to operate within limited resources. A major challenge for the ALRC over the current budget and forward estimates period is to align its expenditure with significant budget reductions, which are additional to the so-called ‘efficiency dividend’.^[2] These include a $0.242 million reduction in 2010–11 appropriation,^[3] with further reductions of $0.495 million per year over the forward estimates period (from 2011–12 to 2013–14). The latter reductions represent a 20% cut on 2009–10 levels.

4.9 A reduction of this magnitude to a small organisation is significant and has meant that the ALRC has had to reduce its expenditure significantly. Currently 80% of the ALRC’s annual expenditure is in salaries (60.31%) and accommodation (19.35%) with little room in the budget to make savings. Other operational costs such as those associated with consulting, publishing reports and other operational requirements constitute a small proportion of the total budget (14%) so that even significant savings made in these areas have little impact on the budget bottom line.

Savings measures

4.10 The ALRC is implementing savings measures from 2010–11. The ALRC has decreased its programs from two programs to one program. The ALRC has traditionally had two programs (formerly ‘outputs’)—the first concerning conducting inquiries and the second about public information and education services to enhance community consultation and participation in the law reform process. As a direct savings measure, the ALRC has removed its second program from its budget to focus on the first. In particular, the ALRC has discontinued the publication of its bi-annual law journal, Reform. This publication provided a quality discussion of law reform issues—such as water, animal law, native title and children—including articles contributed by eminent authors, updates on the work of the ALRC and an overview of current law reform projects within Australia and internationally.

4.11 Other strategies to generate savings have been:

•  Delaying the appointment of full-time Commissioners. The ALRC is now operating with only one full time Commissioner, the President—the minimum allowable under the ALRC Act, as opposed to having, in addition, at least two full-time Commissioners—one per inquiry. This strategy was agreed with the Australian Government Attorney-General’s Department as a short-term strategy as the ALRC was able to call upon the NSWLRC full-time Commissioner for the joint Family Violence inquiry. One direct consequence, however, was a significantly increased workload and level of responsibility of the ALRC’s Senior Legal Officers.
•  Reducing the staffing complement, by not refilling a number of positions as they have become vacant as follows: Legal Officer, Research Manager, Executive/Project Assistant, Communications Manager, and Publications Coordinator. The duties of these positions have been allocated to remaining staff across the organisation, and have significantly increased the workload of all staff.
•  Streamlining the inquiry processes to fit within tight time-frames and reduced resources, including producing only one consultation paper, as opposed to the usual two (an Issues Paper and Discussion Paper), preceding a final report.
•  Producing the Consultation Paper for the Discovery Inquiry in a soft copy online and not producing any hard copies, as well as introducing for the first time, full cost recovery on our final report for the Family Violence inquiry. Charging for this report has significantly reduced the number of reports requested by submitters and stakeholders. Charging has therefore created a barrier to access to ALRC reports.
•  Developing online consultation strategies so as to reduce the cost of consultation travel

4.12 However even with these savings and efficiencies, the ALRC is facing significant challenges going forward, due the size of the decrease in its appropriation and the increase in its operating budget due to increases in the fixed costs such as rent (annual increase of 4%), salaries, communication charges, travel and suppliers’ costs.

4.13 The ALRC has made genuine attempts to reduce other general operating expenses but given that such expenses constitute a small proportion of the total budget, even significant savings have little impact on overall expenditure. For example, the ALRC is required to travel within Australia in order to ensure effective consultation on law reform issues, but travel expenses constitute only around 2% of total ALRC expenditure. A 20% saving in travel expenses would only reduce total expenditure by 0.4%. (The ALRC does, however, make every effort to reduce travel expenses and is looking increasingly to online communication strategies and use of telephone conferences in place of face to face consultation where appropriate).

4.14 Reducing the number of legal and complementary inquiry staff any further would have a direct impact on the ALRC’s capacity to conduct law reform inquiries, to meet tight deadlines and to ensure widespread national community consultation.

Recent trends

4.15 The abovementioned reductions form part of a broader trend. Table 3 below indicates that the ALRC’s appropriation has steadily declined, in real terms, from 2000–01. As remuneration is the ALRC’s major area of expenditure, staffing levels (full-time equivalents, excluding statutory members) are also included in Table 3.

Table 3—ALRC appropriations and staffing levels, 2000–01 to 2013–14