As bushfires burned across Victoria in January, funding for rural firefighting became a political flashpoint.
State Opposition Leader Jess Wilson claimed the government had cut funding for the Country Fire Authority (CFA), the volunteer-based emergency service for outer Melbourne and regional Victoria.
In particular, the Liberal leader claimed Labor "reduced funding every year since 2020" for the CFA.
Premier Jacinta Allan called this "misinformation", saying the state government had increased CFA funding "year on year and year".
"We've only ever increased funding to the CFA," the premier said in January.
Ms Wilson later said an independent budget analysis had proven the premier wrong.
"Premier [Jacinta] Allan's claim that Labor has only ever increased funding for the CFA is simply not true," she said in a press release last month. "Victoria's independent budget watchdog has confirmed Labor has reduced funding every year since 2020."
EVIDENCE FOR THE CLAIMS
AAP FactCheck asked both the premier and the opposition leader's offices for their evidence.
The premier's office pointed to a January 12 CFA statement and a statement from Emergency Services Minister Vicki Ward.
The CFA claimed its budget had "increased year on year since Fire Services Reform in 2020".
The minister's statement specifically noted an increase in government grant funding for the CFA in 2024/25.
Ms Wilson's office pointed to a Victorian Parliamentary Budget Office (PBO) analysis of CFA accounts covering 2020/21 to 2023/24 published on January 19 (the 2024/25 financial statement wasn't publicly released until January 20).
While the PBO found government grants fell every year from 2020/21 to 2023/24, the analysis also found the CFA's total revenue fell in 2021/22 before rising in 2022/23 and 2023/24.
The opposition also provided AAP FactCheck with calculations of annual CFA grants adjusted for inflation, which it called "real funding".
THE BOTTOM LINE
Analysis of these competing claims shows that, to some extent, both sides have been talking past each other.
The government has cited 2024/25 funding figures that the opposition didn't have access to when it made its claim.
However, the opposition's claims are still misleading because grants are not the only way the government provides resources to the CFA since reforms in 2020.
Despite that, government funding doesn't appear to have risen every year since 2020.
An accounting issue in 2020/21 casts further doubt over the accuracy of the data.
CFA FUNDING UNPACKED
The CFA's annual reports state two main streams of state government funding.
About three-quarters of its funding in a given year comes from state government grants, the focus of Ms Wilson's claims.
She is correct that the PBO's analysis shows these grants fell each year from 2020/21 to 2023/24, from $351.6 million to $339.5 million
The CFA's 2024/25 accounts, published after the PBO report and Ms Wilson's claims, showed that government grants rose to $361.3 million, which the premier pointed to as evidence for her claim.
The opposition's analysis has omitted a second government income stream for the CFA called "value for services received free of charge".
When this is accounted for, government funding for the organisation has not fallen each year since 2020.
This funding, arising from Victoria's 2020 firefighting reforms, includes tens of millions of dollars annually for firefighter wages and equipment that the CFA receives from Fire Rescue Victoria (FRV), the state's professional firefighting body.
The 2020 reforms, signed off by the government in 2017, moved professional firefighters from the CFA into the FRV, which became responsible for firefighting around many large regional centres.
The reforms changed how the government funds the CFA, causing some of the staffing it utilises each year to be funded through the FRV under arrangements that see both organisations work closely together.
For example, the FRV fights fires with the CFA outside of Melbourne and has 38 regional stations, many of which are shared with the volunteer-based service (p12).
FRV provides commanders, administrative and training staff to the CFA under a secondment agreement established after the reforms, according to its latest annual report.
The CFA report noted that these resources "would have been paid for if not provided free of charge" (p82).
David Hayward, a public policy expert at RMIT University and chair of the FRV's expert advisory committee, said the FRV secondments must be included to get a complete picture of government funding for the CFA since 2020.
"You've got a big chunk of salaries that suddenly disappear [in 2020/21], but reemerge in another form," Dr Hayward told AAP FactCheck. "You've got to really examine the books to work out what the trends are."
This is demonstrated by the CFA's staffing costs before and after the reforms.
The CFA recorded $439.5 million in staffing costs in 2019/20 (p63), covering 1411 permanent operational staff and 1053 permanent support staff (p27).
But after the reforms, in 2020/21, direct staff expenses were $116.6 million (p64) for just 11 permanent operational staff and 828 permanent support staff (p26).
When services received free of charge are accounted for, government resourcing to the CFA increased in 2023/24 - contradicting Ms Wilson's claim - and was relatively flat in 2022/23, falling by about $900,00 or 0.2 per cent.
However, records show state funding for the CFA fell in 2021/22, even including services received free of charge from the FRV, appearing to contradict the premier.
Total CFA revenue - which also includes sales, interest and other income - fell from $456.3 million in 2020/21 to $430.6 million in 2021/22.
Despite subsequent increases, total revenue did not surpass 2020/21 levels until 2024/25.
Grant funding fell $4.5 million in 2021/22, while the assets and services received free of charge declined by $20.9 million, accounting for most of the funding reduction.
However, the CFA pointed to an accounting issue in its 2021/22 annual report that casts doubt on the accuracy of the reported $20.9 million fall in the value of services received free of charge.
Its annual report states that the decline was due to changing how services free of charge was measured in 2021/22 to base it on "actual data". "In 2020-21, the transition post Fire Services Reform meant that some of this information wasn't available for the full year and hence could not be used to perform this calculation," the CFA report said (p69).
The CFA told AAP FactCheck that the 2020/21 figure for the value of services received free of charge was based on estimates, while the 2021/22 figure used actual costs. Prof Hayward said the adjustment reflects the fact that the arrangements were new.
"Costing the staff is tricky due to overtime, age and seniority, etc," he said.
"It would have taken a bit of time to get the estimates right."
INFLATION-ADJUSTED FUNDING
The opposition also claimed CFA funding had declined in "real terms."
It claimed that after adjusting government grants against an 18.6 per cent cumulative rise in Melbourne's all groups Consumer Price Index (CPI) from 2020/21 to 2024/25, real funding was $55.5 million lower in 2024/25 than in 2020/21.
The calculation omits the value of services received free of charge from the FRV since 2020/21.
Though even including these funds in the above calculation, the value of government funding would still decline.
Stephen Bartos, a University of Canberra economist, said while CPI can be appropriately used to adjust programs that are explicitly linked to the CPI such as the aged pension, it doesn't reflect the costs of running a public body.
Some CPI components are costs shared by households and government alike, such as electricity, Professor Bartos said, others, such as food, recreation and culture are not.
"The CPI is based on prices of a basket of consumer goods," he told AAP FactCheck.
"It is thus not a good reflection of the costs of running a government agency."
Prof Bartos said government agencies typically face cost inflation in wages and capital equipment, neither of which is captured in CPI statistics.
Because of that, he said, governments often determine an "appropriate index" for individual agencies. "Good practice would be for the budget adjustment to be made based on the actual costs faced by the authority," Prof Bartos said.
AAP FactCheck asked Victoria's Department of Treasury and Finance whether data was available about an agency-specific cost index developed for the CFA, but did not receive a response.
