Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Deregulation. I refer the minister to a report in last week’s Australian newspaper that the total value of consultancy contracts for policy advice, research and audits let by this government to date is $940 million. Is this figure correct and does the minister agree that this government has failed to fulfil its election promise to reduce spending on consultants?

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

I genuinely thank the member for Mackellar for her question, because unfortunately there has been a degree of inaccurate reporting over the past few months on this matter and I am in a position to set the record straight.

Julia Gillard (Lalor, Australian Labor Party, Deputy Prime Minister) Share this | Link to this | Hansard source

Surely not!

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

Some members will be astonished to hear that, Mr Speaker. The facts that are available from the annual reports that have recently been presented to the parliament do indicate that of the top 40 agencies’ spending on consultancies—and typically that covers virtually the vast bulk of overall spending on consultancies—the figure for the final full year of the Howard government, the 2006-07 year, was $511 million. The figure for the 2007-08 year was $426 million and the figure for the 2008-09 year was $460 million. In other words, in both cases the spending of the Australian government under the Rudd government was substantially lower than that under the Howard government. We are currently completing in the department the analysis of the total figures, but I can indicate that the amount—that is, the total figure for the 2008-09 year for all government agencies—is still well below the figure for the top 40 in the last full year of the Howard government. So the truth is that, under the Rudd government, contrary to media reports in various newspapers, including the Australian Financial Review and the Australian, consultancy spending has gone down very significantly.

In a broader sense, it is worth noting that, as a result of the government’s reform agenda with respect to procurement, we are seeing savings on a variety of fronts, including IT purchasing, including travel purchasing and including arrangements with respect to both ownership and tenancy of property. We are also seeing savings as a result of the two per cent one-off efficiency dividend that was put in place in last year’s budget. In overall terms—and this is a figure that I would commend to the attention of members on both sides of the House—we are seeing savings of approximately $7 billion over six years in the costs of administering government in this country. One modest component of that is a reduction in spending on consultancies. We inherited government from a government that was rolling in money and that was wasting a lot of money on the costs of government, and we are tackling the waste and inefficiency that we inherited and we are substantially reducing the cost of government to Australian taxpayers.