Kate Lundy (ACT, Australian Labor Party) Share this | Hansard source

I also rise to speak on the tabling of this final report of the Select Committee into the Abbott Government's Commission of Audit. I am grateful for this opportunity to speak to the report being tabled today. As you see, this report provides quite a damning insight into the process that went on to form part of Mr Abbott and Mr Hockey's unfair and disreputable budget. The secretive processes, the flawed assumptions and the lack of evidence to support recommendations contained in the Commission of Audit report were of great concern to the committee. Let me spell out some of these concerns. The conflicts of interest identified among commissioners and the secretariat were not made clear, and the processes for managing these conflicts were not disclosed, even though it was asserted they were addressed. As was highlighted in the committee's first interim report, the processes used by the National Commission of Audit to gather and analyse information lacked transparency. We spent many hearings trying to provide that transparency through the committee's work. It was not forthcoming. We were also concerned about the processes around stakeholder meetings. These appeared to the committee to be ad hoc, and the ways the submissions were dealt with remaining unclear.

The committee was pleased that submissions made to the commission were eventually made public, however, we were also disappointed that information on meetings and consultation with stakeholders has not been provided, so we still do not have the full picture. We are also very concerned about the time frame provided for a report of this scale. We do not believe the time frame was sufficient. The chair of the commission urged that the recommendations be adopted in full, yet admitted that they did not have the time to work through each proposal thoroughly with each relevant department. I will come back to that point shortly.

On this point there were agencies that were identified by the commission for abolition which had not even been given the courtesy of a meeting with the commissioners, or with even one of the commissioners, to explain their role and function and perhaps, if necessary, justify it. It is worth making the point that there were agencies that were not even given a heads-up that they had been flagged for abolition, or scrapping, until the day the Commission of Audit report was published. You can imagine the shock that that would have provided to the professionals providing those functions on behalf the Commonwealth.

During the course of the inquiry the committee requested costings for each of the commission's recommendations. This information was not forthcoming. The commission went on to admit that they did not prepare costings for all of their recommendations and did not undertake detailed financial modelling. In fact, in an answer to a question on notice the commission noted that they instead provided advice on, 'the broader order of magnitude of savings potentially arising from its recommendations.' I would like to emphasise that without the detailed financial modelling estimates provided can only be treated as indicative. There is no basis for accuracy in that regard.

What a shock it was when many of the recommendations in the Commission of Audit report landed, front and centre, in the budget that the Abbott government handed down. The lack of costings and the limited evidence-base relied upon was not appropriate for a report of this magnitude, as I said, or for it to form the basis of so many of the Abbott government's measures in the budget. For example, in relation to the GP co-payment recommendation, we know now that it has become policy. The chair of the commission admitted that they did not have technical expertise for that analysis. The committee proved that the commission's terms of reference were based on a number of incorrect assumptions. There was the contrivance that the government needed to respond to some kind of budget crisis or spending blowout. This so-called budget crisis has been thoroughly discredited by reputable economists.

As far as the broad fiscal policy is concerned, the ACTU pointed out in their submission to the inquiry that Commonwealth revenues as a percentage of GDP were slightly lower than they were in the 1996-97 budget at the time of the last Commission of Audit and substantially below the level of the 2007-08 budget handed down by the then Liberal Treasurer, Mr Costello. In fact, Commonwealth expenditure as a percentage of GDP is only 0.2 per cent higher than it was in 1996-97 when the last review was undertaken.

Another example of the false assumptions made—very relevant to the constituency I represent in the Australian Capital Territory—is the assumption from the outset that the Public Service is too large and inefficient. The fact is, and evidence shows, that the Australian Public Service indisputably ranks as one of the most efficient and effective in the world. We had substantive evidence, as you would expect, from the CPSU National Secretary, Ms Nadine Flood, to this effect. She was able to point to statistics from comparable countries around the performance of the Australian Public Service. Government employment as a percentage of the population is currently lower than it ever has been. Notwithstanding this, the Commission of Audit called for a range of agencies and functions to be transferred from the Commonwealth to states as well as extensive outsourcing of public services like Centrelink. I will come back to that in a moment. The commission gave an extremely conservative estimate that these measures would result in the loss of almost 15,000 Public Service jobs. But, I remind my colleagues, we know that a detailed analysis was not done and as the CPSU, the union representing public servant workers, pointed out, given the massive amount of work the commission wanted to cut or outsource, they expected this number to be closer to 25,000 jobs lost.

Some 40 per cent of Australia's public servants are employed in Canberra and live in our region. We have already lost upwards of 6,000 APS positions since the Abbott government took office. While the Canberra economy is becoming increasingly diverse, there is no understating that such a significant reduction in the size of the Public Service will lead to economic challenges for Canberra. I am pleased that the ACT government in their recent budget brought down a series of thoughtful measures to help the ACT economy along. We have faced these types of challenges before. We are in a much stronger position to withstand some of the impacts, but it is through the thoughtful and clever budgeting of the ACT government which ensures that our level of economic activity remains as high as possible and confidence does not take a nosedive.

The Australian Public Service was subjected to tough efficiency dividends under the previous government that I was a part of. There is no denying that there was little left to cut with the application of those dividends. But one key difference was that our efficiency dividend sought to target the non-jobs area where waste and inefficiencies did exist. That remains as a stark difference from the arbitrary and ideological approach of trying to create smaller government with little consideration to the function and operation of the Public Service itself.

In conclusion, I want to reflect more broadly on this exercise. What we now know is that the Commission of Audit report and all of its hastily pulled together recommendations, which are without a substantive evidence base, form the basis and heart of many of the Abbott government's recent budget decisions. That audit has put a deep fear into the people of Australia as they now observe an unfair budget: a budget they had no idea was coming; a budget that was not foreshadowed in any election promises prior to the general election last year. And yet it has subjected Australians to the most unfair—and now disreputable—budget that they have ever seen. It has been a shock for many people. It will remain so as we continue to see the radical directions that a government which misled the people at the last election continues to take, and no flimsy exercise such as this Commission of Audit and the recommendations put forward will provide any political cover for a government as negligent as this.