Rachel Siewert (WA, Australian Greens) Share this | Hansard source

With regard to the government response to the Community Affairs References Committee report, Impact on service quality, efficiency and sustainability of recent Commonwealth community service tendering processes by the Department of Social Services, December 2015, I move:

That the Senate take note of the document.

If the chamber remembers back somewhat, to 2014, the government changed the way they were going to be contracting putting out services and contracting community services in the community sector and the not-for-profit sector, causing—I think it is fair to say—mayhem and chaos in those sectors. They threw everything up at once, at the same time as cutting $240 million worth of funding originally and then cutting an additional $30 million through MYEFO. During that process they dropped whole sections of support that had already been opened up for tender. The community sector were not consulted and they did not have enough time to get their grant applications in. Because of the chaos that was caused, this was referred to the Senate committee.

Some of the issues that were raised through that inquiry process were the loss of staff for organisations, as I said; the chaos that it caused; the lack of consultation; and the poor timing, leaving organisations very little time—in fact, no time—to adapt to the changes with organisational change. Smaller organisations were shut out of the process, and there were issues around the application of Commonwealth grant guidelines. Many issues were raised. This was an extremely destructive process. As I said, it was on the back of the cutting of $270 million.

This actually had a real impact on people in the community. It is not just about organisations and the impact on the organisations; it is also about the provision of services to some of the most vulnerable members of our community. That is why we also, during the committee inquiry, focused on regional areas—three in particular: Geraldton, the New South Wales south coast and Western Sydney. We used these as case examples because the other thing the government had not done in its rush to cut this funding and to throw all these services up in the air was to look at the collective impact on a regional area. So the committee actually went and talked to the service providers and the people on the ground in regional areas. We looked at what it means to a community like Geraldton when they cut emergency relief from every provider in town bar one, essentially—it is either taken away or cut substantially—and then to get outside organisations to come into the region to try to pick up the pieces. That was the first time they had been spoken to about this issue, which was also deeply concerning.

In the government's response, the government have agreed to a couple of our recommendations, which is pleasing, but they have not agreed to a number, which is deeply concerning. One of our recommendations, which was that the future grants processes need to be based on clear analysis of need, has been accepted. I look forward to seeing how the government will implement this agreement. I hope that the future government tendering processes will be based on such an appropriate analysis and not the same haphazard restructuring process that the government claimed was based on analysis. Given the deep disquiet and the failure to fund critical services in the community, none of us actually accepted that it was based on a deep analysis. The fact that the government then turned around and had to carry out a gap analysis to actually start putting more funding back in to cover the services and to fund the services that they had cut clearly shows that the analysis was deeply flawed.

It is also interesting to note that not only were services funded through a process of gap analysis—and I actually want to come back to that gap analysis in a second, because that relates to one of the recommendations—but the fact is that senators were lobbying and MPs were lobbying to make sure that emergency relief funding got to organisations where, for no good reason, funding was cut. It also showed a totally unrealistic understanding by the government of the geographic spread—for example, cutting funding in Margaret River and expecting service providers from Bunbury to cover that—in larger regional areas.

In fact, we did two reports: we did an interim report and then the final report. The interim report focused particularly on the Commonwealth Grants Rules and Guidelines and whether they actually had been applied or not. The government kept saying, 'Oh, we did this because of the Commonwealth grants guidelines.' In fact, what the inquiry found was that they did not stick to them; in fact, they were using the guidelines as an excuse—for example, not to consult with the organisations that may be tendering in the future. The guidelines clearly show that that is in fact a nonsense; you can consult. They do not preclude the government from consulting.

So we recommended that the Auditor-General carries out an audit of the application of that process. The government say that they will provide the fullest capability, should the Auditor-General decide to include this in the work program. But with the other processes we have also recommended that the Auditor-General updates the Commonwealth grants guidelines, to look at the requirement for consultation periods and documentation of those consultation periods.

One of the things I am deeply disappointed that the government has not agreed to is that we recommended the Department of Social Services publish its recent analysis of service delivery gaps, to promote transparency and to encourage informed decision making in a strategy that ensures that vulnerable people are properly supported right across Australia, with no gaps. They carried out this gap analysis and then did not make that available. In fact, they are not agreeing to make that available. That is deeply disappointing. It is pleasing that they may do other gap analyses and make those available, but not to make this one available—this is the critical one. This is the one where they made haphazard decisions, where the community was not consulted and where we lost essential services. This continues to play out on the ground as we speak—as we meet here. Services that were funded are no longer funded and people are not getting that support. That is extremely disappointing, that the analysis has not been made available and that the government has not agreed to make it available.

Some of the recommendations they have agreed to 'in principle'. I am concerned that the fact that it is 'in principle' means that we will not actually see significant action. For example, on recommendation 4, where we recommended that the department ensure that if an organisation is not awarded a grant that any subcontract or consortium arrangement offered for the same service must be on comparable terms to those which have been offered in a funding agreement. The government say that they agree in principle but that this is a matter for the lead consortium member. They say that as per the terms and conditions of the Department of Social Services comprehensive credit agreement, any subcontracting arrangements established must be consistent with the obligations binding on the lead consortium member.

The obligations binding on that member are very different to the fact that what happened in some instances was that funding was taken from a particular organisation and was given to another organisation, which could not provide the service and then re-subcontracted to the original organisation for a lower price and for lower funding and expected them to do the admin as well. The government knows very well that that is exactly what we were talking about in this recommendation. And so while they agree in principle, if you read the fine print, in fact they do not. They are putting it back onto the lead consortium member when, in fact, they actually need to ensure that this does not happen—that money does not get taken from one organisation, given to another and then that organisation is subcontracted for more funding.

The particular instance that I have very close in my mind is when funding was taken from an Aboriginal service that was providing the service and given to another organisation, and then they were re-funded back. That is not good enough. Those are the sorts of things that the government needs to address.

We will continue to follow up this issue, the implementation of these recommendations and the issues overall of community service provision and funding to our vulnerable community members.

I seek leave to continue my remarks.

Leave granted.