The Slowey Vanishing Department of Agriculture WA

THE State budget came out last week.

But having learnt long ago to ignore the pre budget drops and spin put out by Minister’s offices, I have taken the time to grind my way line by line through the DPIRD budget to put together the true story, rather than rely on the glossy brochures put out by government.

As for this budget, well there is some good news of interest to the farming community, not including the Wheatbelt Budget Flyer put out by the Minister announcing the $541m for fund for rural school bus runs – Note to Minister …..it’s an essential service, not a political gift.?

But, to be fair let’s acknowledge the good news stories of interest to farmers up front.

? $48.6m for mobile and broadband (enough for 12 new mobile towers a year)

? $40m Regional Rail Freight Siding and Rail (the other $160m came from the Feds and $72m is dependent on a mine in Wickepin hitting $1m tonnes of clay)

? $25m for the R and D University Ag Collaboration (Lost opportunity to keep DPIRD scientists)

? $4.2m R and D for Livestock Carbon Emissions (yet more funding for climate change)

On the whole, they are good projects and there is a swag of additional line items across the government, but my primary interest is the funding (or lack of it) that goes into the old Department of Agriculture sec

on of DPIRD.?The success of a Minister is in part judged on their ability to extract funds from the Treasurer.

So, putting aside the redirection of $600m of the $800m Royalties for Regions bucket that used to be part of the Regional Development portfolio, let’s see just how successful this Minister is in defending her department from the razor gang that make up the Economics Expenditure Review Committee?

As regular readers will recall, I have been detailing the decline and fall of the old Ag Department’s budget for the past four years.?Some may have seen my article ‘The Sinking Ship – HMAS DPIRD’ in February which raised the ire of the Minister with claims it was not factually correct. In response WAFarmers President wrote to the Minister seeking clarification, but not surprisingly the questions, to date, have been ignored.

So, to save the Minister’s office the embarrassment of ignoring yet another leer I offer up my services as a former Ministerial staffer who has penned many a leer and draft a reply for the Minister to consider sending back to us (see attached). But first have a read of an edited down version of the letter we sent the Minister in Feb.

Followed by my suggested reply.

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Minister 7 Feb 2022

As discussed during our meeting on Monday 24 January 2022 regarding the merits of the articles that the WAFarmers CEO puts in the Farm Weekly each week, I committed to ensuring that if there are any glaring factual misrepresentations then we would follow up with a published correction.

In turn, we would also welcome any public response from you to the articles, as they usually raise important questions of public policy.

In relation to the recent article “The Sinking Ship - HMAS DIPRD” I stand by the premise that since the Machinery of Government changes, your Department has suffered a loss of senior management who had both agricultural science qualifications and experience in broad acre agriculture.

This, combined with the loss of all the Royalties for Regions funding, that underwrote many research and development projects, plus budgetary cuts has left the Department both demoralised and unable to deliver core services. See the Auditor General’s Report and the Capability Report (or at least implied as the report has not been made public).

Our members have watched the Department of Agriculture’s decline for over three decades and have repeatedly called on governments from both sides to invest more into maintaining core capacity to address biosecurity risks, manage animal welfare and grow the industry by matching grower levies and Federal funding.

Our request is the Department work through the following questions for the benefit of budget clarity;

1.?????How have full time staff numbers changed since the McGowan government came to power in April 2017 (Agriculture, Regional Development and Fisheries through to the number in DPIRD today).

2.?????Can we have a list of numbers by classification level for the last year of the Barnett government through to today, including both professional and technical classifications so we can do a full comparison.

3.?????How many FTEs were working on scientific and policy projects in the days of the Department of Agriculture in early 2017 compared to today. Again, can we have by classification, including both professional and technical levels.

4.?????How much consolidated funding has been allocated (not including revenue from fees and charges) for ag related research and development projects in the last four years of the Barnett Government and how much consolidated funding was spent in the first four years of the McGowan Government?

5.?????Focusing on Grains and Livestock, how many people (FTEs) were working on grains and livestock projects in the last year of the Barnett government vs today? Of these (FTEs) how many have their funding guaranteed funding across forward estimates?

6.?????Have there been any redundancy rounds provided in DPIRD since it was established? If so, how many rounds and how many people (FTEs) have left the department? Can we have a list by classification levels, including both professional and technical levels?

7.?????What was the total cost to pay out for these redundancies and what was the justification of the redundancies if it was not to reduce total FTE numbers?

8.?????What was the FTE count of DPIRD when it was first established? What is it now? Please break down by Agriculture, Regional Development and Fisheries.

9.?????What is the FTE count anticipated to be under the Employee Benefits budget in each of the years out to 2025?

10.??How much of the Royalties for Regions was spent on purely Ag related projects in the last four years of the Barnett Government? How much has been spent in the first four years of the McGowan government?

11.??What is the amount of industry funds from RDCs that was paid to the old Ag Dept in the last two years of its existence? What is the amount of industry funds that DPIRD received from the RDCs for each financial year since it was created? For each of these, list the CF contribution listed in each contract to secure the RDC funding.

12.??How many FTEs are budgeted for in the Biosecurity section of DPIRD since it was formed and predicted out in each year of forward estimate?

Noting the large budget surplus that has recently been announced, this information will help industry to work with the Treasurer / Premier to help ensure a growing sustainable sector of the economy has the budgetary support to continue to grow.

?John Hassell?(By Email)

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MY SUGGESTED DRAFT LETTER FOR THE MINISTER TO SEND TO WAFARMERS IN RESPONCE TO BOTH THE LETTER AND THE RECENT BUDGET

Dear Mr Hassell (President WAFarmers)

THANK YOU for your letter dated February 7 seeking DPIRD Budget Clarity.

Unfortunately, because of the timing of the upcoming May budget I have delayed responding to your letter so as to be able to provide you with the latest figures.

As you will see from Budget Paper No 1, page 218, the Total Appropriations for DPIRD is down from its COVID peak in 2021-22 of $277, to $276m in 2022-23, this will again fall to $237m in 2023-24, and again in 2024-25 to $209m until hitting a record low of $195m in 2025-26.

Now admittedly, this is a large drop, but it does include capital funding for new buildings, (but not the new biosecurity labs that are desperately needed), so if we strip out the capital budget and focus solely on service delivery, then you will see the budget only falls from $246m down to $189m.

This is a drop of just 25%, with inflation it’s probably closer to 33%, but with efficiencies and a whip cracking new Director General driving the staff harder, I’m sure my priorities will still be front and centre of the department’s efforts.

Now if you look at page 221, you will find that the Total Cost of Services is at a record $622m in the coming year.?Yes, it’s an impressive figure, the only problem is over $100m of this is carried forward money from the previous year, money that should have been spent on COVID support, unfortunately we could not organise ourselves to get the money out the door so now it will simply be adding to local inflationary pressures.

Let me quote from page 230.

The?$108.4 million (21.1%) increase in the Total Cost of Services from the 2021-22 Budget Year is largely due to the carryover of $76.3 million of R f R funded projects.

?The 2021-22 Estimated Actual for the R f R Regional Community Services Fund reflects a $73.7 million reduction to the 2021-22 Budget with funding carried forward to the outyears.

?The increase in restricted cash of $11.8 million and the 2021-22 Estimated Actual is due to the revised timing for the delivery of a number of programs as a result of the COVID-19 pandemic.

See how they have reallocated the money to make it look good. The $608m is misleading. But hopefully you will ignore this and focus on our little blue flyer of Key Highlights

My favourite is the $4.2 billion over the next four years for Royalties for Regions.

Most of the money is going into wages and not into infrastructure or projects that the community is calling for.

Unfortunately in my Ministerial flyer, what we did not have space to include is the Total Cost of Services, see page 218, which is planned to drop to $481m in 23-24, $456m in 24-25 and then down to $396m in 25- 26. This equates to a 37% drop over forward estimates. But who’s looking?

In fact, the amount allocated to the Net Cost of Services, once we take out all the fees and charges to farmers and fishers, sees the budget fall from $527m to just $297m in four years’ time.?Once you factor in inflation the real cut is closer to 50%.

I know this seems high, but with less votes in the farming regions as a result of our Upper House electoral boundary changes, the government decided that those funds were better spent in the city to help win the next election.

Not to mention keep the mining industry happy, as it is such a big money spinner. We would prefer to see it grow before agriculture, which is why we are funding $12m for seismic surveys across the State( including your farm) to help identify any minerals sitting underneath it.

Moving on. If you continue reading to page 229 you will see the Department’s annual equipment replacement program has had to be cut in half in real terms from the $6m in 2022-23 to just over $3m for each of the following three years.

The Wild Dog Action plan is also being cut from $3m down to an annual allocation of $1m a year but with the end of live exports it should coincide with the run down in stock numbers.

As for staffing, fortunately, we won’t be cutting staff by much (the unions do get upset and they fund the party, so I’m sure you understand) but as we can reduce the Activities Budget they can all simply sit at their desks doing nothing. As a result funding for employees will only fall from $218m to $210m over the next four years.

However, we will still have to cut staff numbers by about 10%, which equates to about 30 FTEs a year which is about what we have averaged over the past 5 years.

We would have been able to keep more of these staff, but we have allocated $25m to go to the universities and support their budgets and scientists rather than retain our own research capability. It’s a win for the universities.

The good news is this coming year we will get access to around $226m of Royalties for Regions (yes I know some of it still exists), but most of that, the regional community’s won’t actually see, as it is simply a book entry and is lost in cross subsidising other departments, so there is no new money for mobile phone towers or anything else you could nail a plaque on.

Besides, the Nationals were spending hundreds of millions a year on projects and all they have to show is new buildings and hundreds of towers around the countryside.

That funding bucket is planned to be cut by more than half to $104m in four years’ time, (see page 231).

On the upside, Regulatory Fees and Fines will increase from $8m to $8.5m and we have found savings in the Supplies and Services (page 236) from operations which will halve from $140m to $76m so we will save good money by doing less.

Just as we will be cutting our Grant Program (page 236) from $191m to $34m over the next four years, not to mention cuts to capital appropriations which will be reduced from $28m down to $4.4m as we run down our regional buildings now that we have a nice new head office (that’s the leased one which was supposed, to be temporary but will now be permanent).

We do have new labs on the drawing board for Murdoch but with my track record of getting money out of Treasury they may just have to make do with the lick of paint on the old ones for the next 30 years.

On the positive side, even with all the cuts, I have managed to find even more funds to be directed to my priority areas of regenerative agriculture and climate change, although we have had to cut areas such as biosecurity to do it (page 221).

Still what’s the point of keeping out Foot and Mouth Disease or Lumpy Skin if the cows are dying from heat stress?

Despite all the risks out there, I have penciled in for total biosecurity funding to remain flat over the next four years growing slower than inflation from $94m to $95m.

While the biosecurity section will stagger on I’m afraid our Regional Technical and Technology Development section has had to be cut in half from $127m down to $57m, but I’m assured it won’t impact my carbon projects.

As for head office, I’m sure your members will be pleased to hear that HQ have received a boost in funding with a staffing increase from 109 to 129 and funding $37m to $41m to cover the costs of the effort required to reduce the level of services to the regions. It all makes perfect sense.

So, in summary since 2017 when I became the Minister, I am proud to say I have managed to cut the Total Cost of Services from $501m in 2016/17 down to $396m out in 2025/26 which is a reduction of 20% or 40% in real terms over the 10 years. A real gift to the budget bottom line not to mention what by then will be over $8 billion of R for R funding siphoned off.

As for your very specific questions from your letter dated 7 February, I think I have answered them, its full steam ahead with more cuts.

But I will leave you on one last positive note, I can guarantee that DPIRD is setting an example to the farming community by continually reducing its carbon footprint, which is a real achievement.

Yours

The Minister