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National Gallery of Australia director Gerard Vaughan has described continual funding restraints as "challenging" but believes staff understand the pressure placed on management. The gallery announced several positions would be cut last month - including the head librarian position - as it continued to trim its resources guided by consultancy firm Fyusion. Dr Vaughan used the NGA's annual report to reflect on an organisation restructure triggered by an increase to the efficiency dividend in December, which reduced the gallery's budget by five per cent in one year. "We closed NGA Contemporary - our new exhibition space beside Lake Burley Griffin - and two of our food and beverage outlets and we reviewed our commercial activities and our programming to reduce costs across the board. "It has been a challenging period, but I am pleased that all members of the staff understood and accepted the issues confronting us." Job losses at the gallery were outlined in the 2016-17 federal budget, which announced that 63 full-time positions would be cut from cultural institutions over 12 months. The gallery was also hit by the mid-year economic and fiscal outlook, which took $36.8 million from "cultural and collecting entities within the arts portfolio". NGA Contemporary was closed in April less than two years after it opened on the shores of Lake Burley Griffin due to declining funds. Mr Vaughan said the venture was "highly successful" with 24,176 visitors. The annual report stated recruiting and retaining skilled and talented staff was an ongoing challenge with 10 staff resigning during the year and four accepting voluntary redundancies. Consultants were briefed to work with NGA management and council to find savings and outline possible staff reductions. The changes were not revealed in the annual report, but will be implemented within the financial year. The NGA oversaw 44 consultancy contracts during 2015-16 worth $969,000, which was a slight decrease on the $1.1 million spent a year earlier. The change was due to a declining need for marketing and curatorial advice. In September, the gallery confirmed seven full-time positions would be considered "excess" with management committing to redeploy staff if possible or offer voluntary redundancies. Despite staffing and funding challenges, the gallery exceeded its visitation target for exhibitions with national works by more than 640,000 visits. The most popular exhibition was Tom Roberts, which drew 131,878 visitors to the gallery. Mr Vaughan described moving the Australian collections from level two to level one and closer to Indigenous collections as one of the most important changes for the gallery during 2015-16.

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