Governments are under pressure to balance their budgets and are responding by reducing their printing. It looks like a trend rather than a coincidence.
Cutting back on printing must strike governments as a no-brainer. Few voters will complain, and if anyone does kick up a fuss, they can always repeat the furphy that moving documents online will help the environment.
The razor gangs have delivered three big shocks to the industry in the past four months. The Federal Labor government announced in September it would reduce printing by 5% in a bid to save $6 million. The New South Wales Coalition government announced in October that it would generate $2 million in savings by no longer printing annual reports for 180 government agencies and organisations.
They may have been inspired by cash-strapped Queensland, whose incoming Liberal National government announced in July that it would close its unprofitable commercial printing unit, Goprint, and review the rest of its loss-making printing operations.
Part of a trend
To make matters worse, governments had already been quietly cutting back on printing. When NSW Premier Barry O’Farrell announced his new policy, he boasted that the Coalition had already saved about $31 million in its first year of office after reducing government advertising by more than 30%. Presumably, much of that would have come through cutting back on expensive television advertising, but it would also have included a print component.
The recent NSW announcement to cut a further $2 million from the printing budget was poorly received by the industry. Progress Printing, a 10-staff outfit in the country town of Condobolin, said the assault on annual report printing would see it miss out on five or six jobs per year valued at $3,000-$6,000 each.
“To a small- to medium-sized printer that’s a reasonable sort of order,” said sales manager Jeremy Voss.
“They say the printing industry is dying the death of a thousand cuts and this is probably another cut. It’s a drop in the bucket in dollar terms to the government but not exactly what’s needed in the current climate.”
One of Voss’ peers backed him up with a comment on the ProPrint forums. “My company too has just lost its government print work. There will be many small printing companies impacted by the government cutbacks.”
When ProPrint spoke to printers in the nation’s capital, they said quiet, ongoing cuts had preceded Federal finance minister Penny Wong’s headline-grabbing announcement.
One Canberra print boss spoke for many when he said: “It’s pouring salt in the wounds. The industry here is pretty despondent. The cuts represent a sizeable percentage of our market. It undoubtedly will lead to job cuts in the industry.”
Qprint owner Tanya Yachmen was also upset. “I’ve cut back. I’ve only got two staff. Everybody is cutting back. I’ve been in this business for 17 years and bled my finances down to nothing. If I could get out of this industry today I would walk out, but we invest so much money in this equipment, so you can’t. I owe hundreds of thousands of dollars with all the equipment I have.”
But government cutbacks aren’t always a bad thing. Queensland firms reacted with cautious optimism to the news the internal printing unit, Goprint, would exit commercial printing after budgeting to do $8.9 million of work this year – at a loss of $3.6 million.
Mitchell Simpson, managing director of commercial printer Tennyson Group, said at the time: “They weren’t economical. We were competing against them for work and it didn’t make sense. It’s not like it’s infrastructure a government needs to control. If they privatised electricity, they should have privatised printing a long time ago.”
Platypus Graphics owner Tom Lusch was one of many to assume that all $8.9 million of work would “flow back out into the market”. However, Cranbrook Colour chief executive Phil Watt warned the government may cut back on printing given Premier Campbell Newman’s determination to balance the budget. There were also predictions from some figures, such as the managing director of Heaneys Performers in Print, Susan Heaney, that any extra work would be low-margin fare.
More cuts to come
Premier Newman has signalled that Watt’s fears may be well-founded. Shortly before announcing the Goprint restructure, cutting 40 of its 60 staff, he told parliament “that printing needs in government have changed” and that the government was “not just reviewing Goprint”.
“The interesting thing is that we have discovered that there are other government printing organisations or businesses. There is one in the Department of Justice and Attorney-General. There is one in the Department of Education. There is one in the police service and there is also a mob called Print Management Services… [There] is a plethora of printing services. And guess what? They are all losing taxpayers’ money.”
Any move by Queensland to follow the lead of Canberra and NSW would be sure to disappoint the Printing Industries Association of Australia (PIAA), which has described government printing cuts as harmful and misguided.
Chief executive Bill Healey told ProPrint that he planned to raise the issue with NSW and had been organising a meeting with the Federal Department of Finance that at the time of publication looked likely to happen in November.
Healey said he understands that governments are facing serious fiscal challenges, but believes they are wrong to focus on print, which represents a nominal cost to budgets. The problem is that firing staff or abandoning programs is hard to do and causes problems, whereas cutting printing is easy and seems harmless. Yet the impact is much bigger than one may initially think. “It’s not just printing, it’s design. It’s the entire creative process, so it goes right across a range of areas in the industry.”
Makes no sense
Healey has other complaints. Transferring documents online is less environmentally friendly than producing hard copies. Online documents are harder to read, which prompts a lot of people to print the documents, inevitably less efficiently than if the job was handled by a commercial printer. There is also a democratic price to be paid in that important information becomes less accessible.
The PIAA chief said the industry has “to fight this battle about the relevance of print” or the myth about print’s ‘inevitable’ decline could become self-fulfilling. Otherwise, razor gangs will continue to see printing as an easy target.
“People are assuming print is going to disappear and that’s not the case. I don’t believe we’re ever going to live in a world where paper-based communication is going to disappear,” said Healey.
“Nothing comes as a surprise at the moment, because there’s this misconception out there. All governments are under pressure and they see this is a very visible cost.”
Background Briefing
• The Federal government is thought to be the single largest print buyer in the country. Some individual agencies, such as Centrelink, represent more than $10 million of annual print spend.
• Canberra instigated a major overhaul back in early 2010 when it moved to an approved supplier arrangement for up to $220 million of spend.
• Printers have previously criticised the Federal government’s increasing preference toward procurement via tendering portals as a strategy that inevitably leads to reverse auctions and a race to the bottom for print prices.
• NSW and Victoria have changed print management suppliers in the past 18 months. Finsbury Green won the $15 million, whole-of-government deal in Victoria, previously supplied by Stream Solutions, while in NSW, Finsbury scored a multimillion-dollar contract with the Department of Education and Communities.
• Printing has again come under the scythe this year, with the Federal and state governments in Queensland and NSW announcing specific policies to trim their budgets by reducing print.
• The first announcement came out of Queensland’s incoming Liberal National government, which said it would close internal printing plant Goprint and outsource work.
• Commercial printers treated the announcement with cautious optimism that it may mean an increase of print spend on the open market, however, further cuts to the budget are expected.
• The Federal Labor government announced in September that it would reduce its printing by 5%
in a bid to save $6 million.
• The NSW Coalition government announced in October it would save $2 million by no longer printing annual reports for 180 government agencies.
• One printer, which said it had “just lost its government print work”, predicted “there will be many small printing companies impacted by the government cutbacks”.
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