Barbara Pocock (SA, Australian Greens) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Finance (Senator Gallagher) to questions without notice I asked today relating to consultancy services.

Big consultants and their impact on our economy are all over the news today, and it's no surprise, given that we know that $10 billion has been expended on the big four over the last decade. That is an extraordinary spend outside the public sector. Conservatives and the LNP have often talked a big game about containing the public sector and capping employment in the public sector, which is part of their ideological war against the public sector. In fact, that's not what we've seen in the last decade. We've actually seen a cap on employment of public sector employees and a massive explosion in the privatisation of the public sector through the big spend on consultants and, in particular, the spend that went into the coffers of EY, Deloitte, KPMG and PwC.

This has been a privatisation project of enormous dimensions done on the sly, quietly. That's $10 billion that didn't go into our hospitals or our schools, didn't go into child care, didn't go into climate transitioning and didn't go into decent policy development and building that capability into the public sector. Instead, $10 billion went out of our public sector and out of public scrutiny. That is the powerful thing that this kind of expenditure, in particular, buys. It takes public dollars out of the scrutiny of this chamber and the parliament. It's not exposed to the transparency tools of estimates, questions on notice and so on. Those spends are hidden from the taxpayer and kept inside a black box of consultancy expenditure. That loss of transparency is especially damaging for our democracy, and it's nowhere more evident than in the Department of Defence, as we will see on the Four Corners program to be televised tonight.

There are allegations that KPMG in particular, which is the major consultant to the defence sector, has inflated invoices and created bills for work that was simply never done. It has taken brave whistleblowers to draw that to the attention of the Australian public, and those whistleblowers have lost their jobs, they've lost their contracts and, in many cases, they've lost their health and years of their lives, and imposed big burdens on their families. Nonetheless, they have stood up, and we will see them tonight on Four Corners. In one case, a whistleblower said KPMG proposed a million dollars worth of new work that was already covered by existing contracts. In another example it's alleged that KPMG won a $14 million logistics contract in Defence, based on personal relationships, despite being the most expensive tender option offered for that contract. These are examples of the 'land and expand' philosophy, where you farm your relationships for profit and you do down the public sector and its capability.

Instead of big-four transparency and honesty, we have to rely on whistleblowers and dogged journalists. Without them, the egregious example of corruption in PwC and its misuse of confidential government information would simply have never surfaced. We are so reliant on whistleblowers and on our journalists, including journalists like Neil Chenoweth and Edmund Tadros at the Financial Review, who've been amongst the kelpies of the media pack and have chased down all of the issues of corruption that we have seen slowly emerging in consultancy project after project. They have ignored distractions and remained focused on the main game, which is the business model of the big four—to profit from public money, in particular. We see extraordinary breaches of regulation and we see unethical conduct and rampant profiteering. We have to rely now on our national broadcaster to bring forward allegations in relation to KPMG and in relation to Defence in particular. So don't miss tonight's Four Corners, which will give us an overview of what's going on in the big four and of the cost paid by our public sector. We need to focus on the structural questions that are at work in our economy, we need to cut back on the overuse of these profiteering consultants and we must rebuild our public sector.

The final point I want to make is in relation to political donations. These are donations that buy access. That's what we have heard from consultant after consultant in our Senate inquiry. They don't bring brown paper bags of cash to politicians, but they seek access by their donations. This is nowhere more obvious than in the case of KPMG, which has had a very profitable rate of return on its donations over the last 10 years—gaining $1.8 billion in contracts for a mere $1.7 million in donations. That's a return of a thousand dollars on every dollar invested. We need to do better than that.

Question agreed to.