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

I move:

That the Senate take note of the document.

In speaking about audit report No. 16 of 2016-17, Offshore processing centres in Nauru and Papua New Guinea: procurement of garrison support and welfare services, I want to refer back to the previous parliamentary committee on the recent allegations relating to the conditions and circumstances at the regional processing centre in Nauru, and recommendation 15. Recommendation 15e said:

the extent to which contracts associated with the operation of offshore processing centres are:

delivering value for money consistent with the definition contained in the Commonwealth procurement rules;

meeting the terms of their contracts;

delivering services which meet Australian standards; …

And what do we have here? We have the most damning Australian National Audit Office report of a government department. It is almost incomprehensible. We have an examination of $3,045 million worth of expenditure as reported by AusTender at the end of March 2016. And we have an examination of the adherence to Australian government procurement processes, which combine Australia's international obligations on good practice and enable government entities to design processes that are robust and transparent and instil confidence in the Australian government's procurement activities. And what is the conclusion? The conclusion is damning:

The Department of Immigration and Border Protection's (DIBP) management of procurement activity for garrison support and welfare services at the offshore processing centres in Nauru and Papua New Guinea (Manus Island) has fallen well short of effective procurement practice. This audit has identified serious and persistent deficiencies in the three phases of procurement activity undertaken since 2012 to: establish the centres; consolidate contracts; and achieve savings …

This is an auditor outlining serious deficiencies.

I have not had the time to digest this audit completely. There are paragraphs about insufficient record keeping, about no due diligence, about no conflict-of-interest management—on the expenditure of $3 billion, or $3,045 million. The Australian National Audit Office has come down with a damning indictment of the activities of this department and this minister. We in this chamber at question time get lectured to by the finance minister about what a grown-up government they are and how fiscally prudent they are and how in charge they are. Well, let me just give you an example of how Finance is in charge of expenditure in this debacle. The Prime Minister had requested that per-head costs be lower as a result of retendering the contracts, but the department did not calculate a cost per person. Finance advised the Australian National Audit Office that under the consolidated contract the per-person per-annum cost of holding a person in offshore processing centres in Nauru and on Manus Island was estimated at $573,111 at the time of the Mid-Year Economic and Fiscal Outlook 2015-16. Prior to the consolidation of these figures, Finance had estimated the cost at $201,000. That is $371,000 per head that they could not get right, that Minister Cormann and his department cannot add up. They are $371,000, per head, out of whack.

And these are the grown-ups in charge. These are the people who lecture this chamber about prudent, diligent fiscal and economic management, and they are $371,000 out. This is not the end of this matter. This report should be digested by every senator in this place. It is an indictment on this government.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Gallacher. Your time has expired.

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

I seek leave to continue my remarks later.

Nick McKim (Tasmania, Australian Greens) Share this | Link to this | Hansard source

This report from the Australian National Audit Office is effectively a report into the establishment and operations of the detention centres on Manus and Nauru. I have to say, I am genuinely flabbergasted by the revelations in this report. Having digested but part of it in the short time available to me, I can confidently assert that the Department of Immigration and Border Protection would have terrible trouble organising the efficient purchase of a beer in a brewery. This is a damning and scathing report of an agency which in some aspects of its operations has clearly gone rogue. If people think I am overstating it, have a listen to this quote from the Australian National Audit Office:

The department used approaches which reduced competitive pressure and significantly increased the price of the services without Government authority to do so.

The Audit Office has also found:

The Department of Immigration and Border Protection's (DIBP) management of procurement activity for garrison support and welfare services at the offshore processing centres in Nauru and Papua New Guinea (Manus Island) has fallen well short of effective procurement practice. This audit has identified serious and persistent deficiencies in the three phases of procurement activity undertaken since 2012 to: establish the centres; consolidate contracts; and achieve savings through an open tender process.

It then goes on to say in relation to the open tender process:

… the approach adopted by the department did not facilitate such an outcome—

the outcome being that the government had indicated desire to rein in the growing expenses associated with managing the centres. The Audit Office has made it clear that the approach of the department in fact did not facilitate such an outcome. This is the most extraordinary audit report—the most damning and scathing audit report I have seen in my time in politics. It reminds me of the ones that used to be made into Forestry Tasmania; and, believe me, that is not a kind comparison to make of the Department of Immigration and Border Protection.

But it gets worse for the department, because, of course, in the department's response it basically blames the government. Let me read you a bit of the department's response, contained in the audit report:

When legislation was passed on 17 August 2012 enabling regional processing—four days after the release of the expert panel's report—the Department needed to establish the necessary operational requirements immediately. Consistent with expectations, the first asylum seekers arrived in Nauru three weeks later … The Department met these requirements in an environment that was high-tempo, at the peak of national interest and complicated through logistics and uncertainties involved with processing in foreign countries.

In other words, the government should not have established in indecent haste regional processing centres in foreign countries. The Greens could not agree more with the Department of Immigration and Border Protection on that one. It was always going to end in tears and it has ended in people's tears. It has not only ended in a massive waste of taxpayers' money; it has ended in levels of human misery accomplished in the name of the Australian people that we have rarely seen in this country's history.

The Audit Office, make no mistake, has come down like a tonne of bricks on the Department of Immigration and Border Protection to the extent that I genuinely believe that the minister needs to seriously consider the position he finds himself in here. I make the same argument in relation to the secretary of the department. This is a scathing, damning report the likes of which I dare say this Senate has rarely seen. There are senior people not only in government but in the department that need to have a good, long look at themselves here, because we are talking about the expenditure of billions of dollars of taxpayers' money in a way that has not been in accordance with accepted principles of proper process and probity.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

What a disgraceful and unworthy attack that was on the hardworking public servants who during the course of this whole episode were really under enormous pressure. There were tens of thousands of illegal arrivals ending up on Australia's shores. The poor departmental officials had to try and process all of them under the time of the Labor government because they just kept coming. That attack by the previous speaker is unwarranted, unfortunate and wrong.

The previous speaker went halfway. He mentioned that the department had blamed the government. The speaker did say it was in 2012, and of course that was the Australian Labor Party government that the Greens political party supported all the way. It is a pity Senator Gallacher was not still in the chamber to hear Senator McKim, because what Senator McKim said was right about the then government that introduced this, and that was the Labor Party government that sent people to Manus and Nauru in the first instance. And you never acknowledged that, Senator McKim. You try to blame the current government. You are saying the current minister needs to look at it and the current secretary needs to look at it. It is in fact them trying to make up for the oversights—the dereliction of duty—of the minister who was in charge at the time this was all put in place. I cannot even remember who the Labor minister was, but I do remember it was Kevin Rudd, the Australian Labor Party Prime Minister, who started this Manus and Nauru issue. Senator Gallacher, I really suggest that you actually read the report before you get up and make those comments, because this report is a report by the Audit Office on the actions of the then Labor government who started the process of going to Manus and Nauru.

Let me remind senators who were not around at the time what this was all about. Years ago the Howard government did have processing centres there. They were properly managed. They had been put in place with careful consideration by the then public servants doing it the right way. The Labor Party came along and did away with that and, as a result, tens of thousands of people landed on Australia's beaches. Many were killed getting here. In a fit of pre-election anxiety, the then Labor Prime Minister, Mr Rudd, decided that, after denying it for years and years, they had better reinstate the Howard government's offshore detention proposals. In the course of a very short period of time, Mr Rudd called upon the public servants at the time without proper consultation and without the ability to sit down and work out how it could and should be done. Had they been asked to do that, the public servants would have done that very well, but Mr Rudd insisted they do it immediately, because he was facing an election. He knew the Australian people would not tolerate his government on the open borders policy, so he introduced this policy in a hurry. Senator McKim will never acknowledge that his criticism is accurate, but it is accurate against the government that introduced it, and he never mentions that. Did he call for Mr Rudd to be censured? No, he calls for Mr Dutton to be censured. It just shows how hypocritical and how dishonest the Greens political party are in the way they approach this particular issue.

As I say, before Senator Gallacher opens a page and starts commenting on a quite technical report, he should have a look at what it really said. It really laid the blame back on those early days when the bureaucrats were not given the appropriate attention. Unfortunately, time is going to escape me, but we are going to have another inquiry. The last two inquiries have been inconclusive; we have hearsay evidence on hearsay; nobody has ever proved anything; the department, which has all the facts, is never consulted. It is a bit like that children's report of the disgraceful Human Rights Commission—full of inaccuracies, which the department tried to tell the Human Rights Commission about; but they ignored it and simply issued what was clearly a political device at the time. If the department had been asked, as with this latest incident, they could explain the things and give the truth to those allegations. The audit report is right, but it is an indictment of the Labor government led by Mr Rudd.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Macdonald. Your time has expired.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

I seek leave to continue my remarks.

Leave granted; debate adjourned.