Alex Gallacher (SA, Australian Labor Party) Share this | Hansard source

At the outset, I just want to place on the record my appreciation of the extraordinary good work done by the Australian National Audit Office. It is an invaluable resource with tools for us to scrutinise the effect of some of the appropriations and expenditure that pass through this place from time to time.

The second point is I want to place on the record my appreciation of the work of the public servants and the Department of Immigration and Border Protection. I am sure that they are, like most public servants, very hardworking and diligent performers.

I have to also address the issue that has been raised by the performance audit report—Offshore processing centres in Nauru and Papua New Guinea: procurement of garrison support and welfare services. I made a brief reference to this report in a contribution earlier in the week and, immediately, my sparring partner, Senator Macdonald, rebutted my claim that there was something not quite right and that it was all Kevin Rudd's fault. It was all in the Labor years and the audit report, which I had not read, did not refer to anything untoward in the current regime.

Like a good senator, I took Senator Macdonald's advice and I read the report several times—not once, not twice but three times. I can also add that media reports are clearly setting out that the report covers the period under Labor when the camps were re-established and under two further procurement phases handled by the current government from 2013 onwards.

Mr President, I am sure that you have a remarkably good memory and you would remember some of the jousting on this issue when I chaired the report into the recent allegations in Nauru. Senator Macdonald and I had some robust discussion but I do remember a contribution I made. In that contribution in the initial phase of establishment, we could point to urgency, expediency motions properly carried out in the House of Representatives by the respective Labor ministers. They did follow proper parliamentary scrutiny and process, and they also referred to the Public Works Committee as appropriate. That simply has not happened under the coalition's watch.

I go to today's media reports, where the Hon. Peter Dutton is quoted as saying:

The department was placed in a very difficult situation and we are still dealing with, frankly, the mess of Labor's making.

Clearly, I doubt very much whether the Hon. Peter Dutton has actually read the report. It makes two recommendations—two absolutely chilling recommendations. They are reasonably lengthy but they go to staff training and staff selection, the central procurement unit, the budget unit, the program area and staff and delegates—

through guidance, training and staff selection—an approach to ensuring that officials have appropriate seniority and experience to undertake key procurement roles,

The department has agreed to all that.

The second recommendation is absolutely chilling. It says:

That the Department of Immigration and Border Protection take practical steps to ensure adherence to the requirements of the resource management framework when undertaking procurements, including:

The obligation to manage all aspects of a procurement process in accordance with the Commonwealth Procurement Rules—

A huge department has been reminded to follow the Commonwealth Procurement Rules. It is not a small department. This is a $3 billion-plus expenditure and they have been asked to follow the Commonwealth Procurement Rules. They have been asked to comply with the government approved scope and contract value.

You have got a contract: follow it in value and scope. It continues:

In respect to open tender processes, adopting a value for money assessment which compares tenderers against other bids.

This is a huge department expending $3 billion worth of money which lets out tenders and does not follow the scope, does not follow contract value, does not compete and does not have any competitive tension. It goes on:

The application of documented eligibility criteria in line with the Request for Tender and consistent with the Commonwealth Procurement Rules.

…   … …

The need for ethical conduct throughout the procurement to ensure consistent and fair treatment of suppliers;

The need to recognise and manage actual, potential and perceived conflicts of interest; and

The maintenance of clear and complete records of all tender bids, key actions, decisions, conflict of interest and SES disclosure declarations.

The audit is actually telling them that they have not obeyed any of the rules or acted with any due diligence or common sense. It is extraordinary.

In a previous life, I had 16 completed annual audits. My auditors used to say the documents had been filed. There were no questions. We always followed the correct procedures. For Mr Dutton to come out and say that we are dealing with Labor's stuff-up, or words to that effect, ignores the fact that the Commission of Audit was a coalition government initiative to look at some $408 billion worth of government expense, and one of the things they wanted to do was reduce the cost per asylum seeker and the cost into the future—a laudable objective.

We know that the Chair of the Commission of Audit, a Mr Tony Shepherd—I do not know this person; I have never met him—chaired Transfield Services on one day and then chaired the Commission of Audit on another day. He resigned as the chair of Transfield Services at a later date. It was not that much later. He divested himself of his entire shareholdings in Transfield Services.

We know from reading this report that G4 services and the Salvation Army were never told that they were deficient in their contracts. There was no paperwork served on them telling them that they had not honoured their contracts in full or that they were doing an unsatisfactory job. However, a limited tender which was introduced—which is criticised severely in the audit report—was awarded to Transfield Services. I do not want to cast any aspersions on the Chair of the Commission of Audit. I only know about and raise these matters because they are contained in this audit report.

The auditor thought it was pertinent to go down this path and seek a disclaimer from Mr Shepherd and seek some information from all of the people. But what appears to have happened is the Salvation Army and G4 were going along, doing their business and thinking they were going to get renewed and the Commission of Audit said, 'If you combine the contracts together, you can probably save some money.' It may have seemed logical and quite reasonable, but in that exercise all of the Commonwealth procurement rules, regulations, due diligence and conflicts of interest were thrown out. They are not evident to the auditor.

To add insult to injury, the result is this: Finance forecast $211,000 per asylum seeker. Under Transfield and the combining of the services, the cost was $573,000 per asylum seeker—an additional $362,000. Mr Tony Shepherd was the Chair of the Commission of Audit. He was also the chair of Transfield. Those are all matters of fact. The Prime Minister instructed that the cost of asylum seeker care, support and custody be reduced, but the reverse has happened. Do not tell me, Senator Ian Macdonald or the Hon. Peter Dutton, that it was on our watch that that happened, because quite clearly that happened from 2013 onwards. It was on their watch, when the grown-ups were in charge! They appear to have thrown money to the wind without proper process and due diligence, and their own department is seen in an extremely poor light in what is, I think, the most damning audit report that I have had the pleasure of reading in this place.