Ross Womersley: South Australia not-for-profit services cannot afford to lose government funding

NOT-for-profit health and community services are becoming increasingly worried about cuts to government funding after the state election – no matter who wins, writes Ross Womersley.

NOT-for-profit health and community services are becoming increasingly worried about the prospects of cuts to their government funding – no matter who wins the state election.

The maths is simple. To cover the $90 million lost annually from the abandoned state bank tax the State Government has instituted an “efficiency dividend”, cutting an average 0.6 per cent across all departments in 2018-19.

This doesn’t sound like much, but it still means cuts of $109 million in health and $29.7 million in community services over four years. In this election the Liberal Party has already promised tax cuts amounting to around $130 million ($90 million from the Emergency Services Levy and $44 million in payroll tax).

The Liberals will release their full election costings soon but they have said that they also will look to efficiency dividends to balance the Budget. Nick Xenophon has supported cuts to the ESL, so there are similar questions for his Budget bottom line.

At the SACOSS-hosted leaders debate on social issues last week, Premier Jay Weatherill labelled taxation as the elephant in the room, claiming promises to cut taxes would inevitably lead to cuts in community services. In response Liberal leader Steven Marshall and Mr Xenophon said this was just a scare campaign which showed a lack of ambition to grow the economy.

While economic growth undoubtedly plays a part in growing the budget to fund vital services, it does not automatically lead to commensurate growth in government revenue. Accordingly if you plan to cut revenue of $130 million a year out of the State Budget, then the rate of economic growth required to cover that deficit is considerable.

Similarly, targeting waste is important but it is no silver bullet. For instance, cutting the number of politicians and advisers sounds attractive but the entire legislature is only around 0.2 per cent of the State Budget – so that won’t get us far towards balancing the books.

It is these numbers that have the not-for-profit health and community services worried. Our sector delivers frontline services on behalf of government and the community, often more cheaply than government.

However, if cuts to government budgets are done behind closed doors through “efficiency dividends” they can easily be passed on to our sector and nobody will be accountable for the loss in services.

Hence, we are asking all parties to commit to ensuring that non-government services are quarantined from the impacts of any funding cuts or government efficiency dividends.

ROSS WOMERSLEY IS CHIEF EXECUTIVE OFFICER OF SACOSS