Paul Fletcher (Bradfield, Liberal Party) Share this | Hansard source

I am very pleased to rise to speak on the Public Governance, Performance and Accountability Bill 2013. This is a bill which deals with a very important subject matter, which is the performance of the Commonwealth government and its agencies. If you look at the explanatory memorandum there are some very bold ambitions established for the reform program of which this bill forms part. We are told, for example, that 'all governments will need to consider often fundamentally the ways in which public services are delivered and outcomes are measured'. We are told that 'the objective of CFAR'—that is, the Commonwealth Financial Accountability Review—'is to improve performance, accountability, risk management and service delivery across government.' We are also told that the CFAR process:

…identified opportunities for reform to remove red tape from the public sector; enhance the public sector's potential for innovation; improve the performance of the public sector in meeting the government's goals; gain the best value for money spent on any particular purpose; promote high standards of stewardship and accountability; and enhance transparency.

Nobody could disagree with those objectives. Indeed, on this side of the chamber we think they are very important objectives and we think this is an area where the present government has performed conspicuously poorly, as I will speak about in a little detail in a moment.

The fundamental proposition that we put to the House this afternoon in considering the bill before us is that the bill the government is asking the parliament to pass today does not live up to these bold and sweeping ambitions. In fact, it presents only a very modest amount of detail. It is largely a statement of sweeping, high-level principle—in itself not objectionable—but it does not do the job which it claims to do. That is the reason, fundamentally, why on this side of the House we are not disposed to support the bill and to support it being passed at this time. We believe that the task in this area is so important that the time needs to be taken to do a proper job.

I want to make three points in the time available to me this afternoon. Firstly, that there is simply too little detail in the legislation before the House this afternoon. Secondly, that there are very few downsides if we delay passing this bill to take the time to get its content right. And thirdly, that the stakes are very high; that there is no more important objective than an efficient, productive and highly-performing public sector. We are a very long way away from that now, and if we are to work towards achieving that very important objective, then one of the things the parliament needs to be satisfied of is that the new financial accountability and governance mechanisms—purportedly contained in this bill, but in fact the detail is not there—are up to this very important job.

Let me turn, firstly, to the fact that what we have before us is lacking in the requisite detail. As Mr David Tune, the Secretary of the Department of Finance and Deregulation told a parliamentary committee, the key element of this bill is the rules, which 'sit below' the general principles outlined in the bill. At the time he was speaking to the committee, Mr Tune admitted that the drafting of these rules had not yet begun and that with the operational provisions of the bill not due to commence until 1 July 2014 then there is plenty of time for further development.

That is all very well, but on this side of the House we want to see the further detail. We are not satisfied with some broad, high-level assurances. The subject matter of this bill is so important that we want to see the detailed mechanisms which will apply to give effect to the stated objectives of this bill. We have not seen them and we do not think that is satisfactory. As the Auditor-General noted in his submission to the parliamentary committee:

… many of the provisions of the Bill rely on the making of rules to operate effectively. … currently there is no visibility around the content of the rules that will need to be drafted prior to the proposed date of proclamation of the Bill.

In other words, the key elements of this bill—the provisions that do the work that it purports to do—are not available to the parliament to consider. On this side of the House we say that that is not satisfactory. Until we can see the detail of how it is going to work we are unpersuaded that the case has been made for this bill to be passed.

More importantly, so too would it seem, from the disquiet that they have expressed, are key officers of important agencies and statutory authorities. For example, the Chief Operating Officer of the ABC said,

I guess the reservation we have about the haste is around clarity on the rules that sit underneath the legislation and the detail that flows with them.

If we do not have the detail that is required for the parliament to give proper consideration to the mechanisms which are proposed to give effect to the worthy stated objectives of this bill, then the question arises: ought the parliament to proceed to rush to pass this bill into legislation? Or ought we to send it back and say, 'Let's take the time to do a thorough job'?

In considering that question I come to the second point that I wanted to make in the brief time available to me today, which is that there are very few downsides to delay. If the case has not been made out to rush this through, then you need to ask yourself, 'Well, if we don't do anything, if we pause and say, "No, not good enough; come back when you've done a better job," are there any material downsides from not rushing the bill through in its present form?' The answer to that is clearly 'no'. And do not take my word for it; please take the word of the government, stated in the explanatory memorandum:

The current financial framework is not broken, but it does creak at times, …

The Auditor-General noted in his submission:

… the existing framework remains sound, …

In other words, we do not have an urgent, pressing problem needing to be solved. There is no particular case for rushing this through now.

We are in agreement on both sides of the chamber that it is timely and appropriate to review the accountability and governance framework that applies to the public sector in this country. We are in agreement! But on this side of the House we say, 'If you haven't done a proper, adequate job, then do not pass it'. Go away and do the detailed work and then come back to the parliament and tell the parliament, 'Here are the provisions which put in place the detail of the accountability mechanisms, and here is the detail on which you as parliamentarians can base some confidence that the claimed improvement in the efficiency and output of the public sector is going to be delivered'.

I want to turn, thirdly, to the proposition that the stakes are very high; that efficiency and productivity in government—objectives that we are told will be aided by the passing of this bill—are not where they should be and that any government should have as a priority improvements in this area. We know, for example, that there is steady growth in the size of government. From 2006-07 to the current year, Commonwealth staff numbers are up by nearly 20,000. The number of government bodies is growing. The Australian newspaper recently reported that the total number of Commonwealth agencies has risen from 87 to 107 in the last five years.

I have asked every cabinet minister a question on notice: how many new entities have been created within their portfolios since the Rudd government was first elected to office?

Not all have responded but, of those who did, there were some 34 different bodies identified with the total staff across them numbering 4,700.

I have already referred to a recent report in The Australian. Remarkably, according to that report, the precise number of Commonwealth bodies is currently not even known. The most recent list was prepared by the department of finance four years ago at which point there were 930 federal government 'bodies and governance relationships'.

The fact is the public sector size has grown and expenditure in the public sector has grown. Indeed, according to the Review of the Measures of Agency Efficiency report of March 2011, between fiscal 2001 and fiscal 2009, Australia's GDP grew by 64 per cent after correcting from improved terms of trade, while expenditure administered by government grew by 98 per cent—well ahead of the size of GDP growth.

The government is growing in its expenditure, the government is growing in terms of the number of people employed and it is growing in terms of the number of bodies and agencies. There is clear and substantial—and under this government—unchecked growth in government. Of course, that does not prove that we have a problem with public sector efficiency and productivity but it certainly raises a suspicion. That suspicion is reinforced by, amongst other things, some of the difficulties that one finds in identifying in one single place a number as to the total number of Commonwealth employees. For example, the Australian Public Service Commission Statistical Bulletin reports 168,500 staff as at 30 June 2012. The budget quotes Commonwealth staff numbers as at this date as 256,000 and that includes ADF personnel and statutory authorities, but even this number does not include contractors and it does not include employees of government corporations such as Australia Post and NBN Co.

Another interesting data point that suggests that we have a significant problem with efficiency and productivity in government is the 2010 review of public service arrangements conducted under the chairmanship of the then Secretary of the Department of the Prime Minister and Cabinet. That review found that there were 63 agencies with fewer than 500 employees and noted that this suggested real scope for rationalisation—for example, through sharing corporate services. It gave one example which I think is quite telling: an agency with an annual budget of $15 million of which fully one third went on corporate costs such as finance and human resources.

The evidence suggests that there are significant problems in the very areas where the bill before the House this afternoon is supposed to deliver improvements: the productivity and the efficiency of the Commonwealth Public Service of Commonwealth agencies. If you are serious about improving productivity and efficiency, then you need to take the time to carefully examine these provisions and examine the entire regime for financial accountability. It is uncontested that what we have in the bill before us today is not a comprehensive regime but only a skeleton, only an overview, with the detailed rules yet to be drafted. Because of the importance of the issues at stake, until we have that comprehensive explanation of the new regime which is proposed, it is unwise and premature to pass this legislation.

If you care about the government doing a good job; if you believe that there are some things that the public sector is better equipped to do than the private sector; if you believe that the demands of the community on government are only going to increase, if you believe in a government which serves the people; and if you believe in doing more with public resources for the things we care about, then you must care about the efficiency and productivity of government and therefore the reform direction that this bill supposedly deals with is the first importance.

There is no doubt that the demands on the public sector are ever-increasing; for example, a recent Grattan Institute paper argues that there is growing demand for government services in areas like health, the age pension and other welfare programs, and this will significantly increase pressures on government in coming years. There is no doubt that more is expected of the public sector by citizens, not just in Australia but all around the world. To quote from a recent paper by PricewaterhouseCoopers:

… the public sector is increasingly required to redefine its role, strengthen its customer focus and build integrated service-delivery models … these models must be based on meeting customer needs more efficiently and more effectively.

Another reason we must all care about improved public sector productivity and efficiency—purportedly, the matters that will be secured through the passing of the bill before the House this afternoon—a that of Australia's national productivity agenda. We all know that productivity is not what it needs to be. We need to get productivity growth and yet, remarkably, in Australia productivity measures effectively ignore the public sector. Public sector productivity is assumed to stay constant. Let me quote consulting firm McKinsey which argues:

The public sector is the largest employer in all advanced economies, yet its slow productivity growth has long made it a drag on the economy.

There is no disagreement on this side of the House that the issues at stake that this bill purports to address are of the highest importance. What we dispute is this: we say this bill does not do a good enough job of getting to grips with the issues of accountability, scrutiny and oversight of the public sector. It is a mere statement of high-level principles. It does not give the detail; we want the detail, so we say, 'Go back, do a better job and come back when you have done that better job'.

See this speech in context