MOTION MOVED IN THE FEDERATION CHAMBER, HOUSE OF REPRESENTATIVES

Public Service Contractors

15 June 2020

Ms CLAYDON (Newcastle) (18:27): I move:
That this House:
(1) acknowledges that:

(a) an effective public service relies on skilled public servants who have fair and equitable conditions of employment and job security;
(b) the Government's arbitrary average staffing level (ASL) policy is:

(i) driving privatisation as it forces agencies to outsource their core functions;
(ii) causing a blowout in spending on contractors, consultants and labour hire; and
(iii) leading to a hollowing out of the public service; and

(c) evidence to the Australian Public Service (APS) Review indicates that contractors cost 40 per cent more than permanent APS employees;

(2) notes that:

(a) the Australian National Audit Office Information Report No. 19 of 2017-18, Australian Government Procurement Contract Reporting, indicates that in 2016‑17:

(i) Government spending on consultants was close to $700 million, up from around $380 million in 2013; and
(ii) "the big four" had 1,617 consultancy contracts worth $502.1 million since 2012‑13;

(b) more than $400 million has been spent on privatising Department of Human Services call centres, including a $135 million contract for Stellar Asia Pacific, $132 million to Concentrix Services, $120 million to Datacom Connect and $36 million to Serco Citizen Services;

(c) the National Disability Insurance Agency:

(i) recorded a 600 per cent increase in consultants and contractors over two years—from $70 million in 2016 to $430 million in 2018; and
(ii) has previously stated its staffing levels would be 10,595 staff in 2018-2019—this is now capped at 3,230 in the 2019‑20 budget with core functions such as local area coordinators outsourced; and

(d) the Government's billion dollar plan to privatise Australia's visa system will lead to increased visa costs, data and national security risks and job losses; and

(3) calls on the Government to:

(a) abolish the arbitrary and damaging ASL policy;
(b) ensure that workers doing the same job get the same pay to stop the use of labour hire from undermining the pay and conditions of existing workers; and
(c) end the secrecy on government spending on contractors, consultants and labour hire firms.

Mr DAVID SMITH (Bean) (18:58): I also rise to speak in favour of this motion, and I thank the member for Newcastle for bringing this issue to the attention of this chamber.

Sadly, I note the lack of government speakers on this motion on the importance of an effective Public Service. This may be because since coming to power the coalition has slashed nearly 9,000 jobs from the capital region alone. This may be because the Morrison government's arbitrary cap on the number of public servants has forced government agencies to use labour hire to meet their key resourcing requirements, even if it would be cheaper and more effective to do the work in-house.

Maybe members of the government are not here tonight in numbers to defend their record on the Public Service because, as we know, they are sick of experts. It's the simple premise that departments should not be forced to spend billions of dollars of taxpayer money on expensive external labour hire firms when they could be doing this work themselves.

The COVID-19 pandemic has shown the Australian Public Service to be a valuable but under-resourced source of expertise and essential services, yet the COVID Commission is a simple example where the government could have utilised senior leaders from across the public sector rather than appoint a group, with the exception of one, compromised by their approach to conflicts of interests.

I concur with former departmental secretary Renee Leon, who highlighted this government's devaluing of expert advice and over-reliance on consultants, neglecting Public Service expertise in favour of external views that were more a testament to the wonders of the marketing of consultants than the greatness of the product they produce. Her contribution should be a wake-up call for anyone who is interested in evidence based decision-making and good governance.

The member for Newcastle's motion highlights just how far we are down this road. Government spending on consultants increased from $380 million in 2013 to almost $700 million in 2016-17. Privatising Department of Human Services call centres cost over $400 million. In just two years, the NDIA had a 600 per cent increase in consultants and contractors, with the 2019-20 budget capping staff again.

The devaluing of expertise and the outsourcing of public sector advice is not news to me. For more than a decade, while I worked for Professionals Australia, the science and engineering union, I appeared before Senate inquiries and met with government agencies to put on the record concerns about the consequences of the erosion of science and engineering expertise across governments at all levels. Australia's Public Service has undergone a dramatic shift in technical, engineering and scientific capacity.

Governments employed about 100,000 engineering professionals across all levels of government three decades ago, yet now there are fewer than 20,000. Within Defence, a failure to address recurring recommendations to rebuild in-house skills has led to significant costs blowouts and loss of significant material capability. Without technical capacity, governments can neither manage nor assess what the private sector sells them. They have effectively become cashed up, uninformed buyers. Given this, concerns around the Future Submarine program should not be at all surprising.

Last year, The Canberra Times reported that the big four consultancies alone nearly tripled their income from the federal government, to over $2 billion since 2013. There is a reason why they colloquially call the government 'the dairy'. At the same time as this surge in the use of consultancies, there has been a significant increase in the use of labour hire and contracting arrangements to perform business-as-usual roles that are indistinguishable from the role of ongoing public servants.

The use of these arrangements for business-as-usual roles undermines the capacity of the Australian government to build policy and program expertise on an ongoing basis. The government appears to give little or no consideration to the sensitivity of the work, the fact that such workers are not bound by Public Service codes of conduct and that having such a workforce opens the possibility of multiple conflicts of interest into every public sector workforce. The practice runs against the intent of the Public Service Act 1999.

It's true that using contractors and consultants can be useful to provide a just-in-time workforce to respond to peaks in workload, but they are not the foundations for a healthy government workforce. Strong government needs to be driven by a skilled workforce motivated at all times by the public good rather than commercial interest.

ENDS