Tim Ayres (NSW, Australian Labor Party) Share this | Hansard source

I present the report of the Finance and Public Administration References Committee on the capability of the Australian Public Service, together with accompanying documents. I move:

That the Senate take note of the report.

This is a substantial report. It describes the deterioration of public service capability under this government. It builds upon the good work that David Thodey did in his independent report on public service capability, but it is indeed a critical report of the government's performance in implementing that review. The report, titled APS Inc: undermining public sector capability and performance:the current capability of the Australian Public Service, is not simply about capability in the Public Service, the expansion of casual labour hire contracting to government departments or the routine outsourcing of critical policy advice to consulting firms; the report describes an industry of outsourcing and sleazy Canberra deals. It's an industry that reaps billions of taxpayer dollars and hides its profits in offshore bank accounts but delivers an inferior service for taxpayers and undermines public sector capability. It's an industry that relies upon opaque contracts and no accountability to the Australian public or to the parliament. It's an industry that redirects taxpayer money that should serve the public interest and hands it to rent-seekers and ticket clippers. It's an industry that's politicised the very institutions that underpin our democratic system. It's government by management consultants, for management consultants. There is a giant transparency deficit here: billions of dollars going to labour hire companies, ICT companies and consultancy companies, but no measurement; and tens of thousands of workers—a shadow workforce—with thousands under opaque contracts, completely unmanageable and ungovernable.

This report surveys the damage left by eight years of this toxic vision of the country, the logical outcome of privatisation ideology, hostility to the independence of the Public Service and hostility to public servants themselves. It describes the most absurd excesses of APS Inc.—the billions wasted, the services gutted, the institutions that have been undermined. But it also finds some sources of hope. It finds that APS staff are diligent and mobilised by their vision of public service. It finds that labour hire workers are skilled and capable, although their contingency and uncertainty has left them afraid and impoverished, in many cases, for year after year after year. And it finds that agency heads, for the most part, are committed to the Public Service but, of course, infantilised by the government's ASL cap. It outlines a comprehensive plan to build on those sources of hope to redirect public resources into public institutions and to create thousands of good jobs. But, to build that future, APS Inc. must be dismantled.

The four agencies that have the highest rate of labour hire contracting are the Department of Veterans' Affairs, Services Australia, the Aged Care Quality and Safety Commission, and the National Disability Insurance Agency. It's no coincidence that the service failures in those departments have generated public scandal. There is the Royal Commission into Defence and Veteran Suicide. There is the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability. There has been the Royal Commission into Aged Care Quality and Safety, and there should be a royal commission into the robodebt scandal.

The situation at the Department of Veterans' Affairs deserves particular focus. It's a case study in the impact of labour hire, outsourcing and external consultants undermining something that really matters. You see, Acting Deputy President Fierravanti-Wells, after 2015, as veterans of Iraq and Afghanistan deployments were returning from their service, they should have returned full of optimism and hope into good jobs and a department that was able to look after them. However, the federal government's ASL cap, managed by the now Prime Minister, Mr Morrison, meant that the department could not hire any more public servants to deal with this increasing case load—and so the Department of Veterans' Affairs became the largest user of labour hire contracts in the Australian Public Service. At its height, in 2019-20, 41.6 per cent of the department's workforce was external, including over 50 per cent of its frontline claims-processing staff. That is entirely unacceptable. That year, the department signed contracts with 46 separate labour hire providers, totalling over $84 million. That outsourcing has coincided with a blowout in waiting times for processing liability claims. And it has been a disaster. Veterans are dying waiting for their claims to be processed. Their families, their friends and the Australian public deserve an answer. And what has the new minister for this department done? He has commissioned another McKinsey report. You couldn't make it up: the department is paying McKinsey & Company to review why the claims processing times have blown out! Minister Gee, there is a report. It's here, and it's free.

I want to take this opportunity to recognise the extraordinary efforts that those workers, both APS and labour hire, have made to help veterans receive the benefits that they deserve. This failure is not yours. It is a failure of this government, who have put an unfair burden on you and your department and your colleagues. And, to the veteran community who rely upon DVA to do its job: you deserve better than this.

The recommendations for government to act on are clear. There are 36 recommendations. This builds on the Thodey report and should, if these recommendations are adopted, rebuild a public service with the capability that is required—that can deliver the frank and fearless advice that is important to the functioning of our democracy and that can act with independence and integrity. The report recommends doing this in three ways. Firstly, turn off the tap. Identify where the outsourcing is happening, limit it to situations of last resort, make contracts public, and cap the money spent on labour hire by Commonwealth agencies.

Two, start investing in the skills and the capability of the APS. Establish an internal consultancy hub to provide policy expertise and advice to APS departments and agencies and to oversee the rebuilding of policy expertise within agencies so it's not always contracted out to consultancy hubs. It's a good idea. In fact, Mr Johnson in the United Kingdom is doing exactly that. Develop and fund, finally, a whole-of-government ICT blueprint. The government has failed utterly to resolve its problems in ICT capability. Create an employment framework that rewards and encourages talent and expand the APS graduate program.

Thirdly, restore the dignity of the Australian Public Service. Abolish the ASL cap. Allow management by department secretaries and agency heads of their budget envelope. Allow them to determine what is value for money and what is in the public interest and to be accountable for it. Stop the ideological restrictions on workplace bargaining.

These measures are savings measures. They'll redirect taxpayer money instead to building capability, not trashing capability. They'll create thousands of good, stable public sector jobs, many of them in regional areas. They'll improve services and lift confidence in public administration. I repeat: these measures are savings measures. There is a substantial amount of the billions of dollars, the rivers of gold, that are going to these companies that could and should be saved by government to deliver a better service.

I want to thank the fellow members of my committee, as well as the tireless secretariat, who themselves represent the highest ideals of public service. I want to thank all of those people and organisations that made submissions and participated in the discussions.

Finally, the committee requested staffing profile information from agencies across every portfolio. Unfortunately, three departments didn't respond to this request and have not provided an explanation. With no surprise I report to the Senate that they were the Department of the Prime Minister and Cabinet, Treasury and the Department of Education, Skills and Employment. That result, indeed, is a reflection of the politicisation of the upper echelons of the APS.