Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. How is the government dealing with wasteful spending within the Australian Public Service? What legacy issues is the government addressing?

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

I thank the member for Lyons for his question. The opposition seem interested today in debating their economic management record in government. I am delighted to oblige, because, when we took over, we had government spending running at five per cent real growth. We had growth of approximately 35,000 additional public servants within about five or six years and astonishing scandals like $457 million being spent on government advertising within the last 16 months of the Howard government. In addition to this, we inherited a structure of government that was totally, absolutely decentralised, where government departments and agencies were essentially left to their own devices to do whatever they liked in managing their resources and their activities. They were virtually without any overarching scrutiny or coordination from central government. But this government is committed to tackling the inevitable waste and inefficiency that flows from that ultra-decentralised structure and is ready to address these problems. This government has put in place over $5 billion worth of spending cuts, savings in the budget for this year, a major clampdown on abuse of government advertising, new rules with respect to discretionary grants and a process of reforming procurement in order to ensure that aggregated buying, collective buying, can get better value for money for the taxpayer.

But the area that has had some of the most appalling problems has been ICT—information and communications technology—where the government spends somewhere between $5 billion and $6 billion per year. In the past, we have seen problems such as the rollout of the new Customs systems, the integrated cargo system, which we and countless small businesses remember with some degree of horror. We have seen FaHCSIA and the Department of Defence waste $50 million, $60 million, $65 million on projects that were ultimately abandoned, and we have seen a general problem with the lack of coordination of spending and the lack of aggregation of government buying power.

In order to tackle these problems, the government commissioned Sir Peter Gershon, a world-renowned expert, to advise the government on putting in place a new strategy. His findings about the current deficiencies in the way the federal government deals with IT were very interesting, and they were released recently by the government. The first was that there is virtually no across-the-government strategy to deal with purchasing or management of information technology; that there has been minimal scrutiny of business-as-usual spending by agencies and departments; that the purchase of desktop computers and associated elements ranged from $1,500 per desktop to $3,500; that costs per transaction with respect to members of the public from different systems ranged between 10c and $30 per transaction; that costs of human resources systems in various government agencies ranged from $10 per employee to $500 per employee; that, if the current fragmented arrangement with respect to data centres that prevails in the Commonwealth were left in place, this would cost the Commonwealth an additional billion dollars over 15 years more than it should; and that there should be an aggregated arrangement, a coordinated arrangement, with respect to data centres. But, most amazingly of all, the report from Sir Peter Gershon indicated that the ratio of public servants to desktop computers in the Australian government is one to about 1.6.

Joe Hockey (North Sydney, Liberal Party, Manager of Opposition Business in the House) Share this | Link to this | Hansard source

Give them to the schools.

Lindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Link to this | Hansard source

In other words, for every employee in the Commonwealth, including military employees, including some who have no particular need to have their own computer, there are over 1½ computers. Indeed, there are some agencies that have more than two computers per employee. I note that the member for North Sydney says, ‘Give them to the schools.’ Now we know why we have to invest in computers for schools. Now we know why the Howard government did not do anything about computers for schools—because they gave them all to the public servants.

The government is putting in place a new framework to deal with these issues. There will be a ministerial committee, as part of the ERC, to deal with overarching government decisions, and business-as-usual spending that was allowed to grow like Topsy under the member for Higgins will be cut by almost $400 million in a full year, and half of that will be returned in investment in new projects to upgrade IT systems and to enable the legacy systems, the mess that we have inherited, to be improved. A whole-of-government data centre strategy will be developed. There will be a reduction in the proportion of expensive contractors being used in place of full-time employees at, in some cases, double the cost, and there will be a whole-of-government IT sustainability strategy developed.

I am delighted to be able to indicate, as I announced this week, that the government has adopted all of Sir Peter Gershon’s recommendations and will be implementing the report in full. We will continue to work hard to have every possible efficiency to eliminate all the waste that we can from the budget we inherited from our predecessors, because the Liberal Party were asleep at the wheel. We are committed to maximising value for money for the Australian taxpayer. For those on the opposition benches who have suddenly got very excited about the prospect that the global financial crisis could conceivably push the budget into deficit, I ask this question: given all of the uncosted promises you have made—given all of the uncosted promises about fuel excise, about pensions and about capital gains tax for small business—where would they leave the budget position if you were in government? The Rudd government are committed to delivering efficiencies and savings and to eliminating the waste and mismanagement that we inherited from the previous government.