Budget cuts to hit salaries of Australia’s development workers

From July 1, Australian government employees involved in international official development assistance, humanitarian support and disaster relief work for 91 days or more will see a drop in their take-home pay. Previous entitlements to a tax-free income are being revoked for public servants under changes announced in the 2015-16 federal budget. For some staff members, it’s an unwelcome addition to a budget that has already hit Australia’s foreign aid program hard. The new cut is set to save the government $6.7 million by the end of the 2018-19 financial year and will impact staff from a number of federal agencies, including the Department of Foreign Affairs and Trade, Department of Immigration and Border Protection, Attorney-General’s Department and the Department of the Treasury. Until recently, some staff had been entitled to the exemption — mainly former AusAID staff absorbed by DFAT after their agencies merged in 2013, a DFAT representative told Devex. “This was not consistent with public expectations that [Australian Public Service] employees should pay tax on their earnings,” the representative said. Since Jan. 1, no employee of DFAT has been entitled to a tax-free salary, and “the department’s firm view is that all public servants should pay tax on their earnings,” the DFAT representative told Devex. “The secretary made this clear to all staff after the merger of AusAID and DFAT.” Insiders suggest the handling of the changes have been poor, with AusAID staff being unfairly targeted for having this “salary perk” after coming under the umbrella of DFAT. While the department has yet to see any negative effect from the changes to the salary of staff delivering ODA, the impact will likely be seen in the long term. And by July, the revocation of the tax-free exemption will be extended beyond DFAT. Employees of the Australian Federal Police and Australian Defense Force involved in delivering ODA will still be entitled to a tax-free income, however, as will individuals working for nongovernmental organizations or private sector contracting firms in development roles. It is therefore possible that public servants could be working side-by-side with private sector employees still legally entitled to a tax-free salary. Will this lead to an exodus of experienced public servants to the private sector? Time will tell. For former AusAID staff, this loss of income is just one of many concerns for staff currently negotiating on their working conditions. “By the end of this financial year, DFAT staff will also have seen their numbers reduced by 500, around two-thirds of whom worked directly in the delivery of aid and development programs,” Rupert Evans, deputy secretary of the Community and Public Sector Union, told Devex. “The past 18 months have been very challenging for staff as the merger of Foreign Affairs and Trade and AusAID goes through,” Evans added. “The next challenge is dealing with the government’s harsh and aggressive bargaining policy, which seeks to take away staff workplace rights and conditions in return for below inflation pay rises. That is where the real challenge lies and where the focus of staff is for the foreseeable future.” Whether you’re a seasoned expert or budding development professional — check out more news, analysis and advice online to guide your career and professional development, and subscribe to Doing Good to receive top international development career and recruitment news every week.