Senate debates

Thursday, 14 November 2013


Commission of Audit

3:38 pm

Photo of Claire MooreClaire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | | Hansard source

I move:

That the Senate condemns the Government for its failure to rule out cuts to health and education programs, instead making it clear, when the Commission of Audit was announced by the Treasurer (Mr Hockey), that no area of the budget was ruled out, declaring that there are 'no restrictions' for the work of the commission.

The reason this particular motion is on the agenda paper is that we believe we should start the way we are going to continue, and that is: when promises are put out, we are able to discuss them here, not in a way of yelling across the chamber and saying, 'You did wrong,' but by looking at exactly what the promises are and the context in which they are made. Members in the chamber and, I hope, members in the community would understand the interest there is around the ongoing issues of health and education. If there are areas in our budget that people who may not work through budget papers do understand, they are health and education, because those areas impact on them every day.

It is a common practice—and I think most people in the community understand this practice—that there can be a change of government as a result of an election. It happens. Some of us are very unhappy and actually question the role of democracy in this process but, nonetheless, governments change. Consistently over the last 20 years—and, yes, Mr Deputy President, I have checked to see that this is a factual statement—we have had a process with government changes across this country where a new government comes in and immediately there is concern about the budget they have inherited. Seemingly, all the questions and all the figures that have been given in the previous term suddenly have to be re-examined urgently because it is 'obviously worse than they were told'. This is not peculiar to any particular flavour of government. It is standard practice that when you come in you create some sort of review, and the term 'commission of audit' has become popular. It has not always been the term used, but it has become very popular in the last, say, 10 years.

With the new government that has come to power at the federal level in Australia there has been a determination that there will be a Commission of Audit to do 'a review', and I quote the Treasurer when he announced his Commission of Audit at the now-standard press conference, surrounded by worried-looking officials looking as though there is 'something here to be found'. They stand around the auditorium and they say, 'Yes, everything is on the agenda—we are appalled, devastated, amazed at what went on before,' despite the number of questions and debates that people have had in various fora. They are seemingly fearful about what is going to come out when they have this new look at a budget. In this case, talking about the federal government, I cannot remember a day when there was not careful investigation of the budget and the figures and what was going on. I know that, through the periods of Senate estimates, every single dollar was examined and looked at very closely to see exactly what was happening. Nonetheless, I do not actually question the issue of having an investigation in the process, so we are doing that.

But on that day, throughout the widespread media coverage that was put through the community, it was clear that every element of government spending was going to be on the table, just in case anyone thought they were safe. There was an absolute commitment that that was going to happen. However, when you make that commitment you have to balance it against what was out there—you need to be very careful about what other commitments have been made. So you see the point of this particular motion: what we are saying is that there is already a commitment, a guarantee, a promise that was made by the then Leader of the Opposition, as the opposition went through the election process, that the areas of health and education would not be subject to any cuts. So it is very difficult when you have a promise made in an election process. We all know that many grandiose promises are made through election processes and then, when we come into parliament, we see what is going to happen and how we go through them. But when you have a promise that these two major components of our budget are going to be quarantined from expenditure cuts—that was the commitment to the Australian people—and at the same time you are implementing a Commission of Audit which has as its core function to the community that nothing is going to be quarantined, there is a bit of a dynamic there. I understand the tension, because as soon as you guarantee something you are making a commitment that you will have to keep on stating over and over again.

But the particular reason this motion is on the agenda today is that I, as a Queenslander, have a little bit of personal experience about what happens when an opposition promises there will not be cuts, when it guarantees to elements of the community that there will not be cuts in a particular area. I am an ex-public servant, though I still consider my job to be a public servant. But as an ex-member of the public service I know that in Queensland one of the promises and commitments that were clearly made was that there would not be any job cuts in the public sector as a result of the change of government. So we had that commitment and then, just after the Queensland state election, we had the dedicated press conference, with a number of very sad-looking people standing around looking worried and saying, 'Because of the awful position the budget is in, we will now have to institute our own commission of audit.' In that case the commission of audit was headed by someone who is very familiar to people in this chamber, and that is the ex-federal Treasurer, Mr Costello.

So after a period of time and, as with the promise that has been made by the federal government, quite a short period of time; it was not, for example, a six-month, careful way—and I am just losing the words that have been said about the way the current federal government is going to work; I think it is in a very 'staid and controlled way' but I do apologise, I should have those adjectives in my brain and I will get them, I feel sure—but in terms of the process we were going to have a relatively short investigation and then do what we had to do to save the budget.

In Queensland, despite those commitments before the election and in line with what was said that nothing was going to be quarantined in terms of what could be affected by the commission of audit, there have been massive cuts across the state. We could argue whether they were necessary or not because of the budget, and I am sure that there are people from across the chamber who would bring out arguments about the last 73 years of government in Queensland and why there had to be this investigation. But nonetheless, the intent of this notice of motion is that when you say two quite different things to a community and to a parliament you have to understand that there is some confusion and some worry. What I can tell you is that in Queensland many, many people who actually believed the commitment that their jobs would be safe and that the areas in which they were working would be safe, many in the health and education departments across regional and rural Queensland and in the capital cities, do not have a sense of security now when they see identical promises made by the new federal government.

So why we need to ensure, as I said, that we start the way we need to go on is that there needs to be transparency. There needs to be a sense that we are sharing full and open information not just with the parliament, though of course we need it in the parliament, but also with the community. We have a book full of rules about the way this parliament operates, which determines that there will be complete transparency and free and open exchange and set periods about when a budget should be made public and what kind of questioning there can be. But it is not just to the parliament. The important thing is that transparency about what is going to happen and the intent behind commitments made are transparent, and that link is made with the Australian community. Guaranteeing that there will not be any reductions or cuts in the whole area of health or in the whole area of education is a very big call.

I fully understand that there have been comments made since the original statements that if any savings are found they will automatically be redirected within the portfolio area, and that is the current position. But similar statements were made in the Queensland area and I feel certain that similar statements were made in Western Australia and Victoria about knowing what was important. We need to understand that when you start cutting people and resources within agencies, such as we have seen in Queensland and already at the federal level in these very early days in terms of other statement we have heard—and there is a series of statements beginning to build up, and we have to carry around enormous files trying to remember who said what and when—there are serious consequences. Already we have had another statement by the new government talking about what they are going to do to the federal Public Service. This statement was made during the election but it is continuing to be made as we move through into the government taking up its responsibilities. We do not know exactly how many will be affected or where.

I particularly enjoy that wonderful statement about 'natural attrition', that there will not be compulsory redundancies or slashing service delivery. I consistently say—and I may have said it before in this place—that when I hear the term 'natural attrition' I consistently think of something going through the air conditioning, that it will go through these large empty buildings of public sector workers and there will no longer be workers there doing the jobs that they need to do to provide services.

That may seem frivolous, but in many parts of Queensland now if you go to buildings that are still under state government lease, you will go through floors and rooms and areas that still have desks and sometimes computers, but what they do not have are people. We say that promises have been made, however we need to see that service delivery continues, and so too commitment to the people of Australia in those areas. This particular motion is actually around the areas of health and education and we need to be absolutely sure, almost on a weekly basis, that if you are going to remove staff who are currently working in education, or if you are going to remove staff or change the conditions of employment of staff who are currently working in the health area, either within delivery of health services or the extraordinarily important areas of supporting people who work in health developing their policies and their areas, how will that actually result in a commitment to no cuts in health and education?

So it is important that we understand what is happening—and I am just looking around to check on timing as I have a certain period of time, and I hope someone is watching! In terms of the motion, I think it is important that we have input from across the chamber. That is really the intent of this part of the afternoon in our parliamentary week, that we hear from people across the room—from government and the various people in opposition—who are looking at an issue of importance about how we are going to operate as a parliament together and maintain that trust with the community. In this first week of this current government when we already have, as I have said, a growing list of commitments that are being made not just in the election process when people do—and I use the word quite deliberately—have aspirational views about what they intend to do in government, we then have to cut to how people provide the services that our nation depends on. There are two areas, as I have said, on which that dependence is probably greater than any other—the federal government's role in education and the federal government's role in health.

I hope we will be able to have statements from the other side that will make not just me but all of those people currently working in health and education feel a little more secure. From the Queensland perspective, when the people who worked beside those who have already been impacted by the first wave of necessary Commission of Audit reductions—the people working in the Nambour hospital, the people working in the Toowoomba regional hospital and the people working in various schools in Queensland, where class sizes have now become a very important issue and the schools have been slated to close to help fund the necessary processes in education—hear again that there is to be a Commission of Audit that will look at everything to ensure that the budget is balanced, they will have necessary fear.

I am not saying that there should not be commissions of audit and I am not saying that there should not be reconsideration of programs under the process of a new government; what I am saying is that, if you have made a commitment that there will not be a reduction in services in health and education, that will be the expectation of people who rely on those health and education services. If you come back in the next three years and have had to make those cuts, you should understand that people will be upset. That occurs. I am not saying that that is not the process of government; what I am saying is that governments—particularly new governments that have come in after many years of throwing questions and considerations across the chamber to the previous government about how they were handling programs in the budget—should take their words extraordinarily seriously and try, every time there is a budget change, to ensure that people understand why and accept that their interests are being protected.

We will continue to go through the processes already set out in the parliamentary program. We have these opportunities in the Senate and the House of Representatives. We have the extraordinarily valuable Senate estimates program that goes for several weeks over the year looking at areas of the budget. On those occasions people will have the opportunity to ask questions and to hear where the budget is being spent and where services are being affected. I am not saying that the current government will be automatically slashing services; I am saying that we will be able to find out through the processes of parliament where the amount of money has been amended, where the resources have been changed and what the impact will be on services.

I trust that there will not be any more limitation on when we will be able to have that exchange of information. It seems as if we should relocate the sitting of the Senate to Fridays so we will be able to get answers to questions in the immigration area. That seems to be the exchange of information that we have been having this week when we asked specific questions about what is happening in that department. When we are having open discussion, which is the basis of our parliamentary process, I hope there will not be restrictions on how information is exchanged. Clearly that is an issue that has been raised all the way through my time in this place, both on this side and the other side of the chamber. Issues of transparency and trust are paramount.

Where promises, commitments and guarantees have been made but have kind of been pulled back from a little bit, there needs to be a continuation of the ability to share information and to treat each other with a little bit of respect so we understand what the rules are and that the issue is not a personal attack on individuals but actually getting information. I hope that when not just we but other people ask questions through their community activities there will not be any restriction on the kind of information that they get as well. An absolutely important element of our parliamentary process is that through the freedom of information process, through the Senate estimates process and through ministerial briefings we are able to find out the detail and are not pushed aside and given reasons why the information cannot be shared. When people now seek information about what is going to happen in the areas of education and health there should be an absolute commitment that there will be open sharing of information. Whether the government wants that knowledge and whether it actually reflects its original guarantees is immaterial. The important thing is that the information exchange is clear. (Time expired)

3:58 pm

Photo of Dean SmithDean Smith (WA, Liberal Party) Share this | | Hansard source

Sometimes in politics progress can be very slow, but I would like to congratulate the Labor Party on their contribution just then because we might have seen a glimmer—just a glimmer—of progress when it comes to reforming our nation's financial mess. I would like to start by talking about Senator Moore's contribution. It was very pleasing to hear Senator Moore suggest that the opposition is not necessarily opposed to the idea of a Commission of Audit. That is a small tick. We heard from Senator Moore that the Labor opposition is not opposed to reviewing programs to make sure that we do get better value for taxpayers' money, so that is a small tick. It was heartening to hear Senator Moore's contribution where she said that the Labor opposition is not alleging automatically that the new government will slash services to Australian taxpayers. So progress is slow in politics but I think, ladies and gentlemen, we might have had a glimmer of some progress in Senator Moore's contribution just a moment ago.

Senator Moore made the point, quite correctly, that we should start as we intend to finish. I think that is very, very important and I would like to come back to that point in a moment. However, what we did not hear from the Labor opposition was an admission that there is a problem. We did not hear from the Labor opposition that we have a problem in our country. I do not think Australian voters will accept that; I do not think Australian voters will buy that particular suggestion. So do not believe Senator Moore, do not even believe Senator Smith; however I would like to quote from a number of eminent commentators in our country. I thought I might start with Paul Kelly from the Australian. He provided some commentary around the Commission of Audit when it was first announced by our Treasurer and by the Minister for Finance, my Western Australian colleague Senator Cormann. So do not believe me, do not believe the Labor opposition; instead let us hear what Paul Kelly from the Australian had to say. He said:

This was documented by Finance Minister Mathias Cormann, who said that in six years of ALP government the average annual spending increase was more than 4 per cent in real terms, irrespective of Labor's fiscal rules.

So irrespective of what the previous government had tried to do, average spending increased by four per cent annually.

This figure will haunt Labor.

Not my words, not Tony Abbott's words but Paul Kelly's words about the performance of the previous government.

In short, the fiscal stimulus from the 2008-09 global crisis created a new spending plateau—

under the former government. Mr Kelly said:

The daunting strategic task facing Abbott and Hockey now emerges: they seek to impose off the Audit Commission a vast fiscal and public sector efficiency reform on an economy that is fragile and facing great investment uncertainties.

There is a problem and it needs to be addressed, but we heard not a hint from the Labor opposition that this country might be facing some dark days. So that is Paul Kelly.

I would also like to quote Adam Creighton, the economics contributor to the Australian. Adam says, in a very, very informed article in the Weekend Australian on 26 October this year:

Australia's apparent immunity to the economic travails of Europe and the US rests mainly on China's powerhouse economy and its demand for our resources.

This conveniently papers over an economy beset by excessive regulation, public spending and federal dysfunction.

This is an economy that was presided over for six years by the now Labor opposition, and we heard not one word in the previous speaker's contribution that there was a problem. Adam goes on to say:

Resource revenues are tipped to recede, leaving Australian governments' growing structural deficits starkly exposed. The RBA is anticipating a slump in mining investment and early signs other sectors will take up the slack aren't promising.

Unemployment continues to edge towards 6 per cent and investment levels outside mining, as Reserve Bank deputy governor—

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

Mr Deputy President, I rise on a point of order: may I ask that the senator address his speech to the chair.

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

He has been largely addressing his speech to the chamber, and I noticed he is acknowledging the gallery, but Senator Smith you have the call.

Photo of Dean SmithDean Smith (WA, Liberal Party) Share this | | Hansard source

I would be very, very pleased to share my contribution with you, Mr Deputy President. I will restart the quote:

Unemployment continues to edge towards 6 per cent and investment levels outside mining, as Reserve Bank deputy governor Phil Lowe pointed out this week, are at 50-year lows, despite rock-bottom official interest rates.

So we have inherited the frontbenches, the Treasury benches, and we know there is a problem. The Labor Party, the opposition—full credit to the small concessions that Senator Moore made in her contribution—are still blind to the fact that our country has a problem.

I just want to go back to Senator Moore's contribution where she reflected on the fact that we should start where we intend to finish. When we want to understand the motivation of our colleagues opposite, I think it is important to understand where they finished on 7 September. This might give some insight into their lack of willingness to understand and appreciate and acknowledge the serious economic predicaments they have left our country.

So where did the Australian Labor Party finish on 7 September? The coalition, in contrast to Labor, had swings towards it in every state and territory. The coalition finished well, achieving a majority of the two-party preferred vote in all six states for the first time since 1977. Where did Labor finish? Labor reported its lowest primary vote in 100 years. The Greens, Labor's friends in government, had their worst Senate vote in three elections. In my state of Western Australia, Labor's primary vote crashed to just 28.7 per cent. Senator Gallacher, are you grimacing?

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

No, no.

Photo of Dean SmithDean Smith (WA, Liberal Party) Share this | | Hansard source

Oh, right. The Liberal Party's primary vote in Western Australia, by contrast, was 47.3 per cent. I am proud to share that this was the highest across the country. When you look around electorates across the country, the coalition won 51 seats on the primary vote alone. Where did Labor finish? Labor won just seven seats on the primary vote. This resulted in a clear mandate for the Abbott-Truss coalition government, and I will come to that at another time in another debate in this place. So we can see Labor does not want to admit there is a problem, but it is making some progress minute by minute.

Unfortunately, we have not seen much imagination from Labor in the past two days. In question time, this very issue was asked of our leader Senator Eric Abetz, the Leader of the Government in the Senate. He was asked this question by Senator Wong: 'I refer to the Prime Minister's election commitment and his absolute assurance to the Australian people that this government would not make cuts to health and education.' It sounds very familiar. It is what we are talking about today. But the Labor opposition was not satisfied with yesterday's answer and they have brought the same issue back to the chamber today. The message will get through over time, I am sure.

Senator Abetz's contribution in response to Senator Wong's question was: 'This government has every intention of abiding by its election promises.' Could it be clearer? 'This government has every intention of abiding by its election promises.' Senator Abetz went on to say: 'It really does come as a shock to those opposite'—those in the Labor opposition—'that we can have a government in this country that has every intention of abiding by its election promises.' In relation to health and education, which we are talking about here this afternoon, we have said that the totality of the moneys made available in those portfolios would remain. What we have also said is that we will look at the quality of the spend in areas to ascertain whether money can be redirected and as a result get even better results but within the parameters of those two portfolio areas. We were very specific in relation to that. If I might go out on a limb, I think that Senator Moore might have heard the answer yesterday and that was part of her small concession this afternoon that we may actually be able to achieve better value for taxpayers' money without spending less. Senator Abetz did go on to say that the Labor opposition should be very cautious about judging us by their own standards.

So today we are talking about health and education cuts. I thought I might share the perspective of the previous government's health minister and bring to the Senate chamber some views, some learnings, that Senator Moore's esteemed Labor House colleague Nicola Roxon shared just recently at the John Button memorial address. This gives us a powerful insight.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

Kevin Rudd didn't like the speech much.

Photo of Dean SmithDean Smith (WA, Liberal Party) Share this | | Hansard source

That is exactly right, Senator Cormann; it is not a speech that would have been received by Kevin Rudd and his peers very well. I might share some of the attitudes of the former minister for health, given that today's discussion is about health and education.

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

You must have run out of substance.

Photo of Dean SmithDean Smith (WA, Liberal Party) Share this | | Hansard source

Please do not encourage me to rush to the part of my speech which talks about the parlous state of Labor Party finances. Would you like me to rush to that part of my speech now or are you happy to hear what the former minister for health had to say about the performance of the former Prime Minister and indeed the government? I am quoting from the John Button memorial address of 16 October 2013:

Kevin had a fatal attraction to everyone else's problems. He never saw a problem that he didn't believe he should try and fix.

She went on to say:

[Kevin] also had an overwhelming inclination to focus on minutiae as a way of avoiding the big, harder decisions.

So the Labor opposition would like to come to this place to talk about the spectre of possible health and education cuts when in actual fact their government was dysfunctional and full of waste.

Honourable senators interjecting

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

Order! Only one senator is entitled to speak and that is Senator Smith. Interjections across the chamber are disorderly. Also, Senator Smith, could I remind you to direct your remarks to the chair.

Photo of Dean SmithDean Smith (WA, Liberal Party) Share this | | Hansard source

Mr Deputy President, just two more quotes and then I would like to get to the substance of what is a very important issue in correcting our nation's finances. This one is important because it goes to the heart of process and how the former government functioned. As a consequence of this poor process there was clearly waste. The former health minister said:

In addition to the lack of Cabinet engagement on some big strategic calls, Cabinet was also misused by being asked to deal in enormous detail with material it could never hope to be fully across. This meant that many Ministers managed to be both frustrated about a lack of attention to some key areas as well as being exhausted by huge amounts of energy required on less significant matters.

Nicola Roxon went on to say:

There were some contentious issues—

Photo of Carol BrownCarol Brown (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Families and Payments) Share this | | Hansard source

Mr Deputy President, I raise a point of order. The general business motion is that the Senate condemns the government—and I remind Senator Smith that he is now part of the government—for its failure to rule out cuts to health and education programs. That was the commitment that was given by Mr Abbott prior to the election, and now we see and we know that in relation to the Commission of Audit as announced by the Treasurer no area of the budget has been ruled out.

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

You are starting to debate the issue. You have raised a point of order and I am happy to rule on it. Senator Cormann.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

On the point of order, Mr Deputy President, the Labor opposition is clearly embarrassed by what Senator Smith is so eloquently—

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

Senator Cormann, you are also debating the point of order.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

Mr Deputy President, what Senator Smith is doing is comparing and contrasting the performance of the Abbott government with the dysfunctional, chaotic and incompetent performance in health and education by the Rudd and Gillard governments.

Opposition senators interjecting

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

Order on both sides! Senator Smith has been referring to the subject matter constantly throughout his speech. He is referring to other matters at the moment but he has been returning to the subject matter. You are in order and you can continue, Senator Smith.

Photo of Dean SmithDean Smith (WA, Liberal Party) Share this | | Hansard source

Thank you, Mr Deputy President. I left to the last the quote in regards to health issues from Nicola Roxon in October this year:

There were some contentious issues and policy problems that ran for months, in some cases years, without there seeming to be a way to bring contentious issues to a head. There was no avenue for Ministers to bring genuinely difficult issues, where there were legitimately tricky calls to be made, to Cabinet for a real discussion. Health and climate change were the two longest running 'non-discussions' for the first term of Government, with some other contentious policies getting only cursory Cabinet approval at the last minute. There was a reticence by the Prime Minister for big strategic calls to be made by Cabinet, or sufficiently in advance to prepare properly.

So it is no surprise that the Labor opposition in its contribution so far does not want to concede that there is a problem that needs to be addressed by a commission of audit.

I would now like to turn briefly to the Commission of Audit and why it is important. As many will know, the National Commission of Audit's role is to assess the role and scope of government—that is a timely and necessary activity—and to ensure, most importantly, that taxpayers' money is spent wisely and efficiently. Certainly my colleagues on this side of the Senate chamber regard that as a high and important priority of any government. In addition to that—and this is a topic of great interest to Western Australian senators and to me in particular—the work of the Commission of Audit will specifically address the division of responsibilities between local, state and federal governments. Again, this is a timely and necessary activity, one that could have easily been undertaken in the last six years but for the chaos and dysfunction and waste that we saw; in the former minister's comments, that was not taking place.

I would like to note a point that Senator Moore made in her contribution that is worthy of illumination, and that is that it will be, importantly, a public process as well as an internal government process. I would expect that the various stakeholders and interest groups across the country will make a sizeable contribution to that. Importantly, the discussion will be about how we can do more with less, because it is not necessarily correct to suggest that because you spend more you have a better outcome. I can point to no end of public policy areas in this country where taxpayers think, quite rightly, that huge sums of money have been spent with little or no positive outcome.

Importantly—and I think this speaks to the efficiency with which the government is embracing its new responsibilities—the initial report will be provided to government at the end of January 2014, at the end of January next year, so that the final report can be incorporated into this government's first budget. That is an important element in the progress of this important initiative.

I am also pleased to say that the Commission of Audit includes a prominent Western Australian in Mr Bob Fisher. I am sure that Mr Fisher will make an outstanding contribution in making sure that the issues and interests of Western Australia taxpayers are certainly front and centre in this review.

It is important to identify the fact that for the first time in 20 years we are having a commission of audit of this kind. The objective is a clear one: to deliver a surplus of one per cent of GDP prior to 2023. By any measure that is a noble objective and one that is in our national interest. I would like to hear my Senate colleagues on the other side embracing that as a sound objective for the Commission of Audit.

Before I move on it is important to recognise that there are 932—almost 1,000—federal agencies in our Commonwealth that will be part of this review. By any measure that sounds like a large number of bodies. It is worthy to undertake an inquiry into whether or not they are all necessary and whether or not they are all doing what is required of them in the most efficient and effective way.

We also need to recognise this fact: that 76 per cent of the budget is spent on health, welfare and social services alone. It is right to have a discussion, to have a process, where we say, 'Are we doing things as effectively and efficiently with taxpayers' money as we possibly could?' To suggest for a moment that the world in 2013 should be the same as the world that existed in 2007 to 7 September 2013 is absolutely ridiculous.

In the contributions that follow I hope there will be sensible, reasoned discussion and that people will be able to point to the merits of this particular process in reforming our nation's finances so that we can put ourselves in the best position to capture the opportunities which exist for us not only in the region but globally. I hope that as a parliament we will all be able to embrace that and, importantly, start to think out of our box, out of our ideological prisms, so that we can get the best for the Australian community through this particular process. I have every confidence that, when that interim report is provided to government in January, and when the budget is presented next year, even those— (Time expired)

4:20 pm

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

When approaching this debate I took the liberty of getting my staff to get me the Commission of Audit terms of reference, which I think is probably a prudent starting point. Given Senator Smith's contribution that there are nearly 1,000 bodies, organisations, Public Service entities in the review, it makes really interesting reading. According to the terms of reference for the Commission of Audit:

Accordingly, the Commission of Audit (‘the Commission’) has a broad remit to examine the scope for efficiency and productivity improvements across all areas of Commonwealth expenditure, and to make recommendations to achieve savings sufficient to deliver a surplus of 1 per cent of GDP prior to 2023-24.

…   …   …   

Adequacy of existing budget controls and disciplines

The Commission is asked to assess the adequacy of current budgetary practices and rules (including specified timeframes and targets) in promoting efficient and effective government, disciplined expenditure, long-term fiscal sustainability and budget transparency.

…   …   …   

• The Commission will report to the Prime Minister, Treasurer and Minister for Finance with:

– the first phase due by the end of January 2014; and

– the second phase due by no later than the end of March 2014.

That is a pretty ambitious task. It is a monstrous and hugely ambitious task to examine just shy of 2,000 entities in a very short time frame over Christmas and to come back with a proper, prudent and due diligent examination of those areas. Good on them; it is an ambitious task, and if they are up to it that is fine. But what appears to be the case is that things are already on the target list. What appears to be the case is that savings have been predetermined and the authenticity of those may only be emphasised by this Commission of Audit. It does not appear to be a prudent thing to try and properly audit 1,932 government bodies between now and the end of January—but that is their call.

The guidelines are quite clear, and anyone listening to this debate will realise that there are guarantees in place. A cursory examination of The coalition's policy for schools: students first, shows in bold print, 'There will be no cut to school funding under a coalition government.' It is very clear. Similar undertakings have been made across other portfolio areas, including health. But what is a cut?

I was honoured to open an early childhood centre in Ceduna to further the early childhood health and welfare of Indigenous children, in particular. I opened another one in Whyalla, and there are a couple being built in the Anangu Pitjantjatjara Yankunytjatjara Lands. If one of those were to close, would that be a cut? It certainly is to the communities in which people seek these types of facilities and services. But hang on. In the coalition's world, that is not a cut, that is a saving, and they will simply direct that money somewhere else. It is a really big hard call: when is a cut a cut? Is it a cut when a school loses some funding for teachers and that funding is directed to another school? It certainly looks like a cut.

I had the opportunity to discuss with a regional school which 600 kids attend what they thought about the announcement of the increase in funding in South Australia through the old Gonski reforms. They said: 'We need additional money to deliver the proper educational outcomes in this school. What we need is to be able to concentrate on those who need the most from the teachers in a smaller group, and having some additional resources will certainly help us to do that and we will get better educational outcomes.' But what do we have in the coalition's policy? 'More money is not necessarily the only solution for better education outcomes.' I agree with that, actually. I do not think that money is the be-all and end-all, but in a lot of cases there is not enough money in the system as it stands. Teachers are stretched, resources are stretched and services are not being delivered.

We have a new government that was strangely silent for a long period of time. We were recalled to parliament very recently and in the short period in which we have been sitting we have heard Senator Cormann say that he has never disputed the science of climate change. That was the biggest, most quickly eaten piece of humble pie I have ever seen. If there had not been a back on my chair I would have fallen off it. We have heard Senator Sinodinos twice—once yesterday and again today—say: 'The GFC is still here. That's why we've given billions to the Reserve Bank.' This afternoon we heard, 'There are problems with the economy' and, 'The GFC hasn't gone away.' For the 2½ years that I was on the other side of the chamber, all we heard from this side of the chamber was: 'The GFC was nothing. You were pulling the electorate's leg. All the moves that you made were unnecessary.' I cannot leave out Senator Cash, because she was 90 per cent on the mark when she said, 'We took a policy to the electorate and we are sticking to it.' Anybody who saw question time can see that she is sticking to her lines—there is no doubt about that. I do not think that they ever told the electorate that they would only talk about their immigration policy once a week—I do not think they ever told anybody that.

What we have here is the capacity for this new government to carefully reposition itself. Coming back to education and health, we are told that there will be no cuts, that more money is not necessarily the best answer and that 1,932 bodies are to be examined, with an initial report by the end of January and a final report by the end of March. I think that perhaps there is an agenda afoot.

A casual observer of the internet who might receive some paraphernalia from Essential Vision finds, lo and behold, a survey. The Commission of Audit will be reviewing up to 2,000 public entities. As we know, it has not made any recommendations yet, but it is reporting in January and again in March. In a survey, Essential Vision poses the following question:

The Federal Government has established a Commission of Audit to review the Federal Government’s functions and expenditure. Would you support or oppose the following possible recommendations the Commission could make?

I accept that this is all conjecture, but it is really quite interesting.

I have been a member of Medibank Private for a long time, and I read in the newspaper that it is up for sale. I am a senator in parliament and no-one talks to anybody in here about it being up for sale—you read it in the newspaper.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

On a point of order, Mr Deputy President, Senator Gallacher is misleading the Senate in saying that he had to find out about in the newspaper—

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

No, that is not a point of order, Senator Cormann.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Minister for Finance) Share this | | Hansard source

because there is actually a Medibank sale act that has been on the books since 2006, which his government never repealed.

Photo of Stephen ParryStephen Parry (Tasmania, Liberal Party) Share this | | Hansard source

There is no point of order. Senator Gallacher, you have the call.

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

Thank you for that, Senator Cormann. I will go and have a look at it. But the message that I am trying to place on the record in this debate is that there is one process which is very clear: 'There are the 1,932 bodies. Report to me in January, and no later than March.'

But there is another process that seems to be going on, with or without the assistance of the government, and it is really interesting. The federal government has established a commission of audit—that is a fact; everybody knows that—to review the federal government's functions and expenditure. It is very clear. In a poll by Essential Vision people were asked, 'Would you support or oppose the following possible recommendations the commission could make?' Essential Vision have given their Essential Report. 'Privatise Australia Post'—63 per cent oppose it. 'Reduce duplication between the states (especially in education and health)'—73 per cent support it; it sounds like a good idea. 'Reducing welfare benefits'—a total of 60 per cent oppose. 'Means testing all welfare benefits'—a total of 63 per cent support. 'Hand control of DisabilityCare to Medibank Private (which would then be privatised)'—a total of 59 per cent oppose. 'Privatise HECS debt'—59 per cent oppose.

So what we have is a very clear set of statements taken to the electorate. We have heard all week about the mandate: 'Yes, we have a mandate to do this and we will not take one backward step on any of our policies.' We now see a commission of audit across all areas of government. The Treasurer, the Hon. Joe Hockey, said:

You've got to have a credible plan to bring the debt down. And that's what we're developing. That's why we're having the Commission of Audit

…   …   …

Every area of government will be examined. There are no restrictions.

So we put that back in place with the election mandate: 'We went to the electorate. Health's safe. Education's safe. Oh, we'll take the schoolkids bonus off you; that's gone. We're not cutting education, but we are going to take the schoolkids bonus out.'

So I put it forward in this debate that we have a situation where all is not what it seems. Those who are now in government have the capacity to change their rhetoric, their words and their positioning to suit their objectives now, and clearly their objectives now are vastly different from what they were in opposition. All of a sudden they recognise there was a GFC, and all of a sudden they are saying it is still hanging around and there still could be problems from it, something that we said day in and day out but were derided for saying. All of a sudden there has to be a multibillion-dollar injection into the Reserve Bank. All of a sudden there has to be a new debt ceiling. All of these things come about because they are now in a position of responsibility and having to make decisions.

I am very fearful that there will not be a good outcome in health or education. I have been fortunate enough in the short time I have been here to officiate at many infrastructure improvements and, in the education compartment, to interact with principals and students, including student councillors. I firmly believe that they will see a cut to their school communities. We have a Treasurer who is very clear and on the record: a cut is not a cut if the funding is redirected somewhere within the budget. So if there is a cut, for argument's sake, in any of the areas of my duty electorate of Grey—a cut to health or education services to the Anangu Pitjantjatjara Yankunytjatjara Lands that means a school or early childhood centre is closed or there is no funding for nurses or whatever—then they are expected to say, 'Oh, no, that's okay, because that's not a cut, because the money's going to be spent in another town or another place.' If any of the schools in the electorate of Grey or in any part of regional or city South Australia do not have enough in their education budget to deliver the outcomes that all South Australians and indeed all Australians require, they are expected to believe it is not a cut because someone in New South Wales is getting that money.

So this is going to be a very problematic hard sell for this coalition government. There is no way that the electorate is going to accept their argument. There is just no way that parents, students and teachers will accept that a cut to their community is not a cut to education, because the money will be spent somewhere else. I have to say that, as a parent and a grandfather, I think there are a lot of things that could be improved in education. I think parents need to buy in more and I think everybody in the community needs to buy in more in schools. They need to get stuck in and deliver outcomes that are sensible. But the difficulty we have is that you have this spectre of a commission of audit. You have another spectre, which is that the GFC has not gone. We need to be very careful. The real economy, as Senator Sinodinos says, has not been swimming along. We need to be careful there. The mining economy is going okay, but over there it is not so good.

So in that environment we have to trust and believe that a new government is not going to make cuts to education and health. I personally hope their word is going to be kept. All things being equal, I do not have any great angst with a government that is delivering proper education and proper health, but I do have angst with a government that may well be setting us up for a bit of a fall, that may be setting up local communities for a bit of disappointment—in fact, for some bitter outcomes.

As I have said, there are some challenging places to deliver health and education. Those challenging places, well known by those on the other side, are also extremely vital in gaining outcomes which are fundamental to the Australia we live in. I would be extremely disappointed if some of the initiatives we have made, particularly in some of the outback areas of South Australia, were not followed up on or funded properly and did not get to their full potential because the Commission of Audit said 2,000 people lived there and the money could be better spent here. Therein you have the real difficulty of the Hon. Joe Hockey's predicament: moving money within a health budget or education budget is not a cut. I have said repeatedly and will take after Senator Macdonald's modus operandi: repeat, repeat, repeat. If a cut in health or a cut in education is simply moving something in the budget away from one community to another and that is not a cut, I say that is wrong because that community rightly will say it is a cut. I do not care that the community over there has got an extra teacher; you have taken one off me. I do not care that they have extra dollars in New South Wales; you have taken some off South Australia. I do not care that you have less money in the Northern Territory. And the saga goes on.

We need to watch this space and be extremely vigilant. In the couple of days that I have had here I have seen a change in tone and rhetoric. If we come back in February, March or June of next year—whatever the sitting schedule is—and we start to see cuts appear, we will be holding you to account as we rightly should. Your documents and your leader say that he will not break a promise and he will carry out all his mandates. It says:

There will be no cut to school funding under a coalition government.

Those are the words of the document. Those are the words of the Prime Minister of Australia. We will be watching those on that side of the chamber for any cut which contradicts that clear and unequivocal position. These are the points that we need to be very clear on. You have your Commission of Audit. You will get your recommendations. You will have to make the tough decisions. We will be over here watching to make sure that you honour your word, that you carry out what you took to the Australian people and that you deliver on your commitment of no school funding cuts.

4:41 pm

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

I want to thank Senator Moore for bringing this particular topic for debate to general business, because health and education spending by federal governments have been increasing over time but are important aspects of government's contribution to the social fabric of our nation and, indeed, a core function of democracies such as Australia, particularly with our franchising of mass education and our commitment to that by various governments.

I was drawn by one of her statements. She said we should not be having a commission of audit, because 'we need to start as we mean to finish.' I do not think there is any greater statement that any of us on this side would disagree with. If you wanted a debating point, that was it. 'We need to start as we mean to finish;' therefore, do not have a commission of audit. Those of us on this side—the government of Australia—want to not finish where we have started. That is precisely why we have instigated a commission of audit. We do not want to finish with $300 billion worth of debt. This is a handicap that even Phar Lap would have struggled under. We are committed. This government and the Australian people both hope we do not finish where we have started in winning this election.

It does make a lot of sense that the very definition of a commission of audit is a full-scale review of the activities of government. I think it is quite useful to reflect on the Labor Party's approach, when coming to government, to assessing the state of play, the state of the budget and the state of the government's response to the people's wishes. I think there is no greater contradiction than the Rudd government's 2020 Summit approach to a whole-of-government response. It was going to shape a long-term strategy for the nation's future—kind of similar to what the coalition government has instigated but a very different approach: 10 working parties, 100 participants, a lot of celebrities and not too many women all got together with white paper, whiteboards, some sticky notes probably and some white board markers. What a success that approach that started off the Labor Party's time in government in early 2008 turned out to be.

But it is either a case of ignorance from the opposition or, more likely, political game playing. Why does Labor just want to exclude health and education from the full-scale review? It sounds like their approach to the Henry tax review and so many other of the reviews that they instigated in their time in office, churning up a lot of public money without actually adopting any of the recommendations. The Labor Party's own internal review into its own business in 2010—the Bracks-Faulkner-Carr report—did not exclude anything. In fact, Labor at the time boasted that it would be a warts-and-all review, yet many of the report's recommendations were kept secret and only 42 per cent of them were implemented.

Senator Moore's motion may be spurious, but it does give me the opportunity to explain for those watching and listening to this scintillating debate, firstly, what the Commission of Audit is and how it will work; secondly, why the Nationals support the initiative; and, thirdly, why Labor hates the idea. The commission will deliberately and methodically review the scope, efficiency and functions of government. The previous government was fond of making costly policy announcements for which most of the funding was conveniently allocated just beyond the forward estimates so that it did not have to be measured or accounted for. We now are dealing with that budget time bomb.

The Commission of Audit will look at the adequacy of existing budget controls, Commonwealth infrastructure—a health check on government assets—and the public sector's performance and accountability. Maybe that is where Senator Moore's concern is—the public sector's performance and accountability. This is about making sure that we have the most effective and efficient public service possible to deliver not for themselves—churning around paperwork on their own work agendas—but for the agenda of the Australian people, as evidenced in the government they elected and as outlined in the Governor-General's speech to this chamber earlier this week.

The Commission of Audit was a coalition election promise, made with the full support of the Australian people, and the government intends to abide by its election promises, which is something Senator Abetz made very clear when answering questions earlier today. I know that is a unique and recent political experience for most of us in this chamber—having a government that plans to deliver on its election promises and that has, from day one, set about implementing that plan in a very calm, effective and methodical manner. There is no sense in the erraticism that has typified the Australian government's approach over the recent past. There is going to be a very stark contradiction between the approach of the Abbott-Truss government to the responsibilities the Australian people have given it and the approach of the previous government.

The idea of understanding independent research to ensure the government adheres to these sound principles is not something new. In fact, it is something that the Victorian National Party MP John 'Black Jack' McEwen spoke about 76 years ago. He said, 'It is the task of government to discover the basic facts upon which our national economy is founded, and to search there for the root causes of the problem.' There are some real structural issues with our budget, and we need to get to the heart of that. That requires some serious work, not just looking at the regulatory burden that has been placed on our national economy in the recent past but looking over the longer term at the impacts of previous governments' decisions. It requires taking a holistic view of the whole economy and devising ways that are going to actually deliver results and make it easier for people to get on with the business of doing business.

I want to touch briefly on aspects of the education and health spend. Some really interesting research has been done. I am sure Senator Moore agrees with me that, when looking at public spending in the health and education spheres, we need to be concerned about outcomes. We do not want spend money just for the sake of spending money. The recent Deloitte report into the UK education system highlighted the fact that more money spent in education does not mean higher grades, more educated students and better results on PISA, and it does not mean better results on NAPLAN.

Photo of Helen PolleyHelen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | | Hansard source

You do not get better results by cutting funding either.

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

But, Senator Polley—

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

I beg your pardon, Senator McKenzie.

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

Sorry, Chair. But it does not mean better results. It does not mean a better educated child at the end of the system, because what actually counts is the relationship and the education that goes on within the classroom, not how much money we are throwing at the classroom, not how many classrooms we have. What is occurring within the classroom is something that money does not necessarily buy and that cannot necessarily be increased by throwing more money at it. So we are not ashamed that we are abiding by our election promises and that we are starting as we mean to finish.

Why does Labor hate it so much?

Senator Polley interjecting

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

Senator Polley, stop your interjections, please.

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

Why does Labor hate the Commission of Audit? Because they are worried it might expose the ineptitude of the previous government—like we need any more litany of information on that. I am quite looking forward to next week's Senate estimates, where we will investigate the previous government's poor record right across the board. The truth is that Labor hates the idea of a national commission of audit because of what it is likely to uncover. It will cover the full extent of the Rudd-Gillard-Rudd Labor-Green-Independent—I am sure there is an acronym in there somewhere that could be useful—government's dreadful mismanagement and massive waste of taxpayer funds over the past six years.

The Commission of Audit will be a core function and is to drive efficiency. We should not back away from that. We should not back away from the fact that we need to get more productive as a nation to compete internationally. That means that if we were really interested in education outcomes and health outcomes we would want to work out how to better use the pot of money we have with a better focus so that we do not have laptop overlap and so that we do not have hall overhauls. The litany of waste under the previous government is record breaking. We have recognised that and we are going to go about examining it and ensuring that it does not occur again.

It is very offensive that you do not want to use the bucket of money that taxpayers have given us to spend on education and health in an appropriate way to get the best bang for our buck, because we all know in this chamber that it does not always get spent in the best way. I think we are clutching at straws to argue otherwise. Labor is telling us we should continue to throw money out the window by saying no to fair income support for students in regional Australia. Let's face it: if we found some savings, a better way to use the taxpayers' dollar and a better way to structure our system, then we might have some money to do some really good stuff that we need—greater income for students from regional Australia. We could offer better support for remote Indigenous schoolchildren. You are saying no to a Gonski that we can afford. You are saying no to fixing the rural doctor shortage, because we only have X number of dollars.

Senator Gallacher mentioned the classic Labor Party approach to budgeting when he talked about the axing of the schoolkids bonus. I guess the reason the government have to axe the schoolkids bonus—

Senator Polley interjecting

is because, Senator Polley, we want to live within our means. We actually want to ensure that the promises we make, as the government of Australia, are fully funded. They are not like the rural and regional development promises that were made, that were not funded because they were based on a tax—the minerals resource rent tax, which was projected to raise $4 billion. We are silent on the other side of the chamber now, are we? That tax was projected to raise $4 billion, but how much did it raise? Let me just check the figures. That would be $200 million. There are not too many funds going out into regional Australia on the back of that tax. This side of the chamber is actually interested in ensuring that our—

Senator Bilyk interjecting

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

Senator Bilyk, please stop interjecting.

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

Government senators and members are keen to ensure that we can fulfil our election promises, that we can provide certainty to the Australian people when they look to their federal government for leadership—particularly around the national economy. That means ensuring that every promise we make is fully funded from a source of revenue that we can control and that we actually know what is going to be delivered. Ninety-five per cent below target, by the way—but it is nothing new for the Labor Party to be missing out on targets, skipping out on budget constraints and skipping out on surplus projections. A target missed here, a target missed there—no wonder we need a commission of audit.

Labor is focusing on health and education because Labor wants to revive a scare campaign which would claim that the government is going to sack teachers, doctors and nurses. The problem with that is that the federal departments of health and education employ thousands of public servants—but no teachers, no doctors and no nurses. I think the conversation that we need to have as a nation, and that the Abbott-Truss government is going to face up to, is to articulate areas of responsibility within our federation so that we get some clarity around budget areas, so that we are not all paying for the same things and so that we get rid of the overlap.

What is the Commission of Audit going to discover about Labor's multibillion dollar school halls fiasco? What will the commission discover about Labor's cruel abolition of the Chronic Disease Dental Scheme? What really is the value for money, rather than throwing money at state dental programs which do not have the dentists to do the job? These and many other questions will be dealt with by the Abbott-Truss government's National Commission of Audit, and Labor is not going to like the answers.

Labor have been attacking the government's very well-planned approach to how we are going to get this country back on track and how we are going to deliver on the surpluses that you never could because you were not prepared to take the hard decisions. You were not prepared to say no. Like the dealer to the junkie on the corner, 'We just kept handing it out.'

Opposition senators interjecting

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

Senator McKenzie, it is preferable not to use the second person.

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

My apologies, Chair. The former government were very lax in their approach to budgetary constraints. They always chose the political approach; they always chose the quick vote-buy over the tough decisions. This government is not going to shy away from the touch decisions, because being in government requires balancing the privilege that comes with it with the responsibility of making the hard decisions and taking the community with you. We were very, very clear as a government about our plans to get this budget back on track and to get our national economy moving forward post the mining boom, and that is going to require looking beneath the surface. It is going to require digging a little deeper under the budget figures instead of looking at what the boom is delivering and saying, 'Oh, it's okay.' I can tell you that right across regional Australia it is not okay. There are two job losses in this small business here, there are three over there—and that adds up to a community that is losing the capacity to stand up for itself, losing the capacity to pay its mortgage, losing the capacity to purchase goods from families down the road in a similar small business et cetera. Small business is feeling the pinch, and we are going to have to face up to the fact that it is not going to last forever and we need to look a little deeper. And that is exactly what the coalition government expect to do. We expect to reduce the debt and the deficit we have been left with, and that is going to take years. That is going to take years but we are prepared to do the hard yards.

In terms of education spending, wasn't it a classic that we set up a demand-driven system in higher education and said, 'We'll pay for it. No worries; bring it on.' I just noticed Senator Mason is entering the chamber. I hope Senator Mason is going to say something on this, because we are not quite sure how sustainable that particular policy setting was as a measure to build a budget on. That is because the former government took a siloed approach to their policy announcements, or should I say a thought bubbles/media release/vote-buying exercise. We are going to take a holistic view, because, hey guys, it is interconnected and you cannot make a decision in this part of the economy without it flowing through. So yes we want more young people in Australia to attain higher education. Yes we want a smarter citizenry that is able to take on all the challenges that the 21st century is going to bring our nation and all the opportunities to maximise that space

But that is actually not a good reason to say that anyone who wants to go to university should go to university and we will all pay for it, when you also combine that with all the other promises that were made and, at the end of the day, it becomes an unsustainable mess—and that is exactly what we have inherited as a government.

The Australian people made it very, very clear a few months ago where they wanted this nation to head and who they wanted to be in charge of the Treasury benches, and that was Mr Hockey and Senator Sinodinos; it was the Abbott-Truss government. They needed us in the room because they know that we are prepared to do what is in the national interest, not what is in our own political interest, and I look forward to watching that occur.

I just want to make some closing remarks on Labor and efficiency. After wasting billions of taxpayers' funds, Labor half woke up to the need for efficiency as the budget plummeted deeper and deeper into the red. And—instead of using a mechanism like the Commission of Audit to have a look and ask, 'Where we can get rid of waste, and how can we be more efficient without diminishing crucial services?'—they thought they would go for the central planning modus operandi: the efficiency dividend right across the board. That actually did result in services being cut, and in $2.3 billion being cut from education, from Australian universities, in a very blunt, Soviet style. So I would much prefer the Commission of Audit.

5:01 pm

Photo of John MadiganJohn Madigan (Victoria, Democratic Labor Party) Share this | | Hansard source

I rise today to speak to Senator Moore's motion. I believe we need to spend more on education, and on health—doctors, allied health et cetera. I really do wonder if we are just going to have another razor gang, in some ways. I acknowledge that you cannot spend what have not got, but you do need to invest for the future. There is a lot of concern out there, and there has been money badly spent, but all governments spend money wisely and unwisely, and we have to acknowledge that no side gets everything right.

In my travels around Victoria I have visited secondary schools, primary schools and kindergartens, and a few come to mind. In Donald I visited the Donald Primary School and saw that the walls are riddled with white ants, and they cannot open the windows in the school. The teachers have to come in and paint the classrooms during the school holidays to hide the borers in the walls. I can recall visiting Kyabram Secondary College, where the borers are so bad that you actually fall through the floor and the sheet-metal class teachers have to cut sheets of steel to screw over the holes in the floor. Then there is North Geelong Secondary College where it is obvious that there are major problems with the maintenance of the buildings—and all credit to the new principal for the improvements that he has made to the school, but there are still huge gaps in the budget. Close to home, near my workshop in Daylesford, at the Daylesford Secondary College you can see enormous problems there with the gap in the budget. Then I spent some time at Easter up in western Victoria in a town where a friend of mine's daughter is a nurse, and she said: 'If you get sick here, don't bother going to the local hospital; drive the 2¾ hours back to Ballarat because you're not going to get any assistance here because there's no money for doctors and enough staff and facilities to treat people. So drive back to Ballarat.'

So I think that there has been money not appropriately spent, but I do fear that we are falling behind the rest of the world when I see some of the projects that are happening overseas in education and public health. Possibly we are falling behind, and I fear we may fall even further behind. I do not want to see a situation where we have a lot of consultants brought in with, possibly, preconceived outcomes, as has happened in the past. There is never any query on the cost of consultants and what they bring.

I also do not want to see any further selling of public assets. Medibank Private has already copped it—shall we say, the former government took a dividend from the members of Medibank Private.

So I see there has been fault on both sides of the equation and by successive governments of all persuasions. Ultimately, whatever decisions we make here affect people. And we are elected by Australians; we are not elected by corporations; we are not elected by ideologies, whatever they may be—we are elected by people, to do what is in our country's interests and to build our country up for all Australians, no matter who they are or where they live.

So I would urge the government to think very seriously about how this commission of audit is going to carry out its work. I urge them to remember that, ultimately, it is about people, and that, no matter what government it has been, they have all made mistakes. But these mistakes affect people.

For our young people to take advantage of the jobs of the future and what opportunities may present themselves, they need to have good health, and they need good education so that more of them can be engaged in the workforce and be better equipped to take advantage of those opportunities when they present themselves.

5:07 pm

Photo of Ursula StephensUrsula Stephens (NSW, Australian Labor Party) Share this | | Hansard source

I too rise to contribute to this debate in relation to the Commission of Audit and the scope and expectation that this audit might deliver. I thank Senator Madigan for making the point so clearly that really, as legislators, we do our utmost to ensure that those who are coming ahead of us, our young people, do have the opportunities that they have in education and in access to health. And of course, as an advocate for the regions, Senator Madigan makes the point so clearly that too often it is the bush, it is rural and regional health, that really gets a whack because it is a small voice; it is not a squeaky wheel. Those regional services step up above and beyond the capacity of most providers in the cities and do amazing things with very little, and we should not be expecting them to do an amazing lot with a lot less.

But, just coming back, I think it is really important to go to the issue of what the coalition's Commission of Audit actually has been established to do. Let us just put aside what happened under the Kennett regime and what happened in Queensland and think for a moment. It is quite a daunting task for the commissioners to deliver the outcome that has been proposed to them, and that worries me in many respects. There is a massive wish list.

With a lack of information, of course people start to speculate and get very anxious. We have already heard the discussion about Medibank Private. We have seen the cuts to AusAID and the dismissal of next year's graduates, who had all made arrangements to start in that program, who have been fired, basically, by email. We start to think about what the rolling implications are, where this wish list might end up, and what the consequences of going for low-hanging fruit in the first instance will be. I think that is where people are really worried. They are worried about the commitments that have been made.

I had a meeting in my office yesterday with an organisation who are party to an intergovernmental agreement which is about access to disability services. The finances have not been signed off by the Commonwealth for this financial year, and they are waiting in desperate anticipation for those unexpended moneys to be delivered to their state government so that the program can be delivered—and half the year is gone. They were really concerned that that is quite a large amount of money for disability services that might just get evaporated as unexpended funds and be clawed back because they did not get the money in time to spend it.

So there are really realistic concerns in the community about health, education, disability services, aged-care services and community services, as well as the commitments to infrastructure. We have had the discussion too about the RDAF funding, round 5 of funding, to all of those local government organisations which had made commitments—contracts had been signed with their partners, which is part and parcel of the RDAF process—and, when it came to the government signing off on the contracts, they were all written off. Just in my home town, that is a significant amount of money, several millions of dollars, that local government had committed to partner in projects that now have gone by the by. Some of them were very significant community infrastructure projects, and that seems to be another one of the local government concerns about what this Commission of Audit might actually do.

But the first part of the audit, which is a huge challenge in itself—and they have to report by January—covers the scope of government, the efficiency and effectiveness of government expenditure, the state of the Commonwealth's finances, the medium-term risks to the integrity of the budget position, and the adequacy of existing budget controls and disciplines. That is by the end of January, and we are at the end of November now.

Phase 2, which is by the end of March, will examine the Commonwealth infrastructure and Public Service performance and accountability. I make that point because a lot of the discussion—and realistically, because we are here in Canberra, we hear the discussion—is about Public Service job cuts, but in fact that is one of the lower-order priorities. It is the very last thing on the list, and that is the thing we see. The very visible, tangible thing is job cuts, but what we do not see is changes to machinery of government; the impacts that might have; the announcement that was made last week by Senator Abetz about non-ongoing staff; how the public sector actually works; and what the role of non-ongoing staff and contracted staff is. Unless you are immersed in public sector management, you do not really get to understand that those non-ongoing staff can be quite critical linchpins between government programs and service delivery. If you do not have someone to manage the grants program or you do not have someone to ensure that the training is being rolled out for some kind of health program, the program does not happen. The program becomes underexpended, and the money is wrapped back into consolidated revenue.

I think that Senator Gallacher, from South Australia, belled the cat because he said exactly what we are seeing is happening: if funding is taken in an umbrella program, if one childcare centre closes because there is underenrolment or underparticipation, that money is clawed back. It is not seen to be a cut; it is seen to be a reassignment, but in fact on the ground, in that little community, it is a cut. A cut is a cut is a cut. A service is gone. Re-establishing that service, trying to recruit people into those services, just exacerbates the challenge.

When we are trying to think about the issues of early childhood education, when we are thinking about child development, occupational therapy, playgroups—those kinds of things that are all immersed now in a kind of seamless way in which we are looking at our early childhood development framework—these things do not just come systematically as school education or community education. A lot of it is integrated. A lot of it is community fundraising, with the participation of local organisations ensuring that a service can exist and can be supported in a small community—life education, for example. It does not happen unless there is local community support and engagement. It is funded partly by state government funding through the Commonwealth, but if that money is not taken up and is not matched, it is lost. That is the critical thing we have to think about in this commission of audit.

There is a lot of angst in communities, in organisations and in the Public Service about the commitment they have to very significant research which may no longer be continued. We have international longitudinal studies involving students in schools, health departments, research institutes and international organisations. None of these things are out of the ball game; everything is up for grabs. The anxiety we have is that the kinds of things the government will look to cut, the low-hanging fruit, are the critical voices. That is what they did very effectively in 1996 when they basically cut out the advisory groups. They stopped funding the organisations that were trying to give fair, free, frank and fearless advice, contrary to government policy explaining what the impact of changes might be. That was very low-hanging fruit. Hundreds of millions of dollars went from supporting advisory bodies and advocacy bodies.

Let us have a think about the things that are proposed because people are speculating in the absence of any kind of detail. Maurice Newman, close confidant to the Prime Minister, speaking only last week at a dinner, raised the flag about the Gonski reforms—that we cannot afford them. Basically he said we are overcommitted, that we do not need to have this investment in our schools. If you had been listening to the first speeches of many of the new members of the House of Representatives, you would have heard many of them talking about the impact of our better schools program and the investment in schools over the last six years, and the commitment we had to future changes.

The Catholic education system tell you how important the Gonski reforms are and the agreements that they signed up to for improving access to education for children, particularly those with disabilities and special needs and gifted children. These are the kinds of programs which very clearly might be under the gun if the advice of people like Mr Newman—as I say, a close confidant of the Prime Minister—is heeded. We think about his concern about the NDIS—that it is too expensive a system, that we should be looking for something cheaper. We do not want a cheap and nasty dependency scheme; we want something that gives dignity to people with life-long care needs and to their parents, families and carers. We do not want a cheap and nasty version of the NDIS just to save some money in the short term. We do not want to think that a government will holus bolus decide to slice 225 research positions from the CSIRO because climate change is a nonsense, which, again, is Mr Newman's view. He does not believe in climate change and he does not believe in funding climate change research. When you think of the anxiety about how this rolls out, those three things—the Gonski education reforms, the NDIS and climate change research, highlighted in that seminal speech by Mr Newman—immediately send signals because they have impacts right throughout our social services system and our education system, into our higher education system and into our research capability. We want to be an innovative, forward-thinking, 21st century creative nation. How can we be if we clamp down on so many of those things?

Look at what is happening in AusAID. I am appalled by that decision, which was taken unilaterally, without any consultation and without any notice. Talk about no surprises; it was a big surprise that the government would do that unilaterally to that whole organisation. AusAID is a proud organisation, admired around the world for the way it integrates our foreign investment, our foreign development, our diplomatic relationships especially with developing countries, and leverages our goodwill by investing in aid projects. We are going to see very different investment in future. The graduate program harnesses the enthusiasm, the commitment and the idealism of young people to work in the AusAID programs, to be engaged in a post working on development projects. I have lots of them as interns in my office and they come back having transformed the world, in their eyes. You have to allow them that enthusiasm and sustain them by giving them the opportunities which now, sadly and desperately, will just disappear, and we will lose the intellectual development they bring with them as well.

Senator Madigan says he does not want to see public assets sold—one of the things widely speculated. We could sell off defence assets, we could sell off land, we could sell off buildings, we could privatise the HECS debt, the $40 billion. That would be a very effective saving. We do not know what that might do to any student who is unable to meet the private sector conditions of repaying their HECS debt, who would suddenly have a credit-rating problem. How could that possibly work? We could consider the contestability of services, as we have seen in Queensland where the government have gone right down deeply into community services

They have looked at contestable community health services, at disability support services. They have closed schools and preschools and childcare centres. They have increased class sizes—something that we know can have a really damning effect on education outcomes.

We can look at cuts to funding for support programs that are non-ongoing—pilot programs. Sometimes the criticism from a government coming in is: 'Well, you know, the previous government had more pilots than Qantas.' I have heard that so many times, but in fact you are testing ideas. You are actually saying that one size does not fit all. That is exactly what Warren Mundine is saying and it is exactly what Noel Pearson was saying: you have to have fit-for-purpose programs, particularly in the social services area. We would want to see that those kinds of commitments are not going to be the low-hanging fruit that the Commission of Audit brings.

We could look at means testing. There are several people saying, 'Let's have a look at means testing our welfare and social security payments much more closely.' There are those, of course, who say, 'Let's go to the issue of corporate welfare and the substantial subsidies and provisions that are being given to a range of industries.' We could sell off the NBN. That is on the cards. We know that is probably going to happen. What is happening about the privatisation of Australia Post? That is an issue of huge concern to people and one we know will be identified in the list of things. What happens if you sell the local post office? We know already what is happening there.

We have had suggestions that maybe this government might like to think about revisiting the Australia Network contract that was given to the ABC. We know why they might want to be interested in going down that path because we know who owns the alternative network providers. We can think about the issue of reviewing the DGR status of NGOs that are providing dissenting voices. That was proposed several times. In particular, we know that that proposition has been put around in relation to human rights organisations and environmental organisations that are critical of the government. In many ways it is about silencing dissent.

Let us think about industry assistance packages. We heard from the other side yesterday that they do not want to support the Australian automotive industry, but what about the mining industry or smelting or gas production or the futile research that is being promulgated around the place? Let us think about the support we give to first home buyers. We could take that away. How about we revisit the issue of negative gearing for investment properties? That is going to affect a whole lot of different people in the scheme of things.

The Commission of Audit might go one step further. We have heard the Prime Minister say, 'We have a whole federal Department of Health and Ageing that does not deliver one health service.' Why not go the whole hog and axe the whole department? That could be the path that we are travelling down.

At the time that the Commission of Audit is having an unmanageable and unprecedented challenge for them—I wish them luck in their endeavours to do this—we have talked about the 12,000 public servants. I know that Senator Seselja is going to speak in a moment; I guess he will have some concerns about that. But let me first put something on the record. The machinery of government changes that are bringing together to the Department of Prime Minister and Cabinet everything around Indigenous Australian service provision are going to quadruple the number of staff in that central agency and create a range of problems. It is going to bring together services provided by nine agencies in a new model that is going to be incredibly challenging to manage. In those machinery of government changes, what do we see? We see that the services we want to get to those Indigenous communities and those Indigenous people are all in hiatus. They are all kind of hanging. Nobody knows what to do or where to go. Money is not flowing; issues are not happening. This is the real challenge for the Commission of Audit. If we want our Public Service to be lean and mean and effective we have to make sure that we are not putting around mixed messages and weird challenges, and we definitely have to ensure that the unintended consequences, or the unstated consequences, are not cuts to the critical issues of health and education.

5:27 pm

Photo of Zed SeseljaZed Seselja (ACT, Liberal Party) Share this | | Hansard source

It appears that not much changes. Some things in fact never change. There are some things that are absolutely constant. We know that the sun rises in the east and sets in the west and that night follows day. Just as sure as those things is that Liberal-National coalition governments have to pick up the pieces from the financial mismanagement of Labor governments. That is what the incoming coalition government is dealing with right now. We saw it in 1975 at the end of the Whitlam government; we saw it in 1996 at the end of the Hawke-Keating government; and we are seeing it again now in 2013 as the legacy of the Rudd-Gillard government.

What is breathtaking is that, just as sure as it is that the Labor Party always wrecks the finances of our nation, it gives no assistance to governments coming in to clean up the mess that it has left. We well remember the massive Labor debt that the Howard government were left when they came in. As they set about the task of picking up the pieces the Labor Party opposed them at every turn. It opposed them at every turn. Every economic reform, every privatisation was opposed by the Labor Party at every turn as the coalition got about the business of fixing the mess that they had inherited. Unfortunately, we see that nothing has changed. We see that history is repeating itself, and the Labor Party now, having trashed the joint, is coming in and telling us that they do not like the way that the coalition are cleaning it up.

I say that we have a different approach and we are not going to follow the Labor approach to economic management or to managing the budget, because we have seen where that leads. Labor governments always leave things this way. You hear it in contributions from Labor senators; you heard it from the former government when it made announcements. It is this never-ending focus on outputs rather than outcomes. The measure of success for the Labor Party is always about how much they spent on any given area. It is not about outcomes. We used to hear it at the territory level and we see it right across the board. If you apply the Labor Party logic of outputs versus outcomes, every Labor blow-out of course represents an extra investment—whether it is the NBN or the school halls. If you take the logic of the Labor Party—which is not about the achievement or the outcome for the community but about the outputs—then every blow-out represents an extra investment in a particular area. The coalition takes a very different approach.

What we are debating here today is the Commission of Audit. It was interesting to hear the contributions of a number of senators. Even amongst Labor senators there seemed to be a difference in approach—from Senator Moore in the first instance, when she acknowledged that perhaps a commission of audit is not such a bad idea. But the tenor of most of what we have heard from most of the Labor Party is that a commission of audit is a bad idea. So, let's look at the intent of the Commission of Audit. The commission is reviewing the activities of the government to ensure taxpayers are receiving value for money to eliminate wasteful spending; to identify areas of duplication between the Commonwealth and other levels of government; to identify areas where Commonwealth involvement is inappropriate; and to improve the overall efficiency and effectiveness of government services.

I ask: what is there to object to in those goals or in ensuring that taxpayers receive value for money? What is there to object to in a government seeking to eliminate wasteful spending? This should be the goal of every government; it should not be just the goal of coalition governments. Why was the Labor Party not taking measures to make government spending more effective and to give taxpayers better value for money? Why were they not doing it? We heard earlier in the exchange that you need to start as you finish. The point was made very well by Senator McKenzie when she said that we do not want to finish where Labor has left it. But it is worth asking the question: how did we get to this point? After just six years of Labor government, how did we get to this point? I go back to Senator Moore's contribution at the start, where she suggested that oppositions often make grand promises but when they get into government they walk away from them. She seems to be confusing the current government for the former government. She seems to be confusing the attitude of this government with that of the previous Labor government.

We have heard so much about the carbon tax promise, but, while we are dealing with issues of public finances, let's go back to one of Kevin Rudd's first promises in opposition—many here may remember it—was to be an economic conservative. As opposition leader Kevin Rudd promised to be an economic conservative. He said that he wore it as a badge of honour when people referred to him as an economic conservative, but in government something completely different happened. In fact, we saw the most rapid turnaround by far in the nation's finances in its history. We had deficits as far as the eye could see—$27.1 billion, $54.8 billion, $51.5 billion, $44.5 billion and $23.5 billion. Those are not the acts of an economic conservative. That is not the delivery of a government that is committed to wisely spending taxpayers money. We so often heard from the former government that it was in fact a revenue problem that was leading to the massive deficits. But if we take a look at the actual revenue during that period, the revenue went up quite considerably from the first budget to Labor's last budget—to the tune of around $60 billion. We saw revenue going up—there were some dips occasionally—and yet the deficits kept mounting.

The coalition is saying that we want to see taxpayers money respected; we want to see it wisely spent. I do not think any senators in this place who would object to an approach like that. As we go about the task of examining areas where we can do things better, it would be far more helpful for the opposition to embrace that task and support the government in its efforts to do that instead of playing this role of opposing everything the government is seeking to do for what can only be called rank political opportunism.

The Labor Party claimed to be economic conservatives and they were not. That is one of the major reasons why they are no longer in government—people could not trust them to look after the nation's finances. They promised to be economic conservatives but we saw in budget after budget after budget that they were not. They did not honour taxpayers' dollar. There are a number of examples of that. We can look at the way the NBN was put together. There was no cost-benefit analysis, and we saw the results—the time line slipped, the budgets blew out and we saw mounting debt. I think it was Senator Stephens who seemed to be suggesting that it would be a bad thing to sell the NBN. If my memory serves me correctly, I think the Labor Party had planned to eventually sell the NBN—I can be corrected in this place if my recollection is wrong. We as a nation should not in the long term be seeing this kind of monopoly asset in government hands. We saw that with Telstra many years ago, the sale of which the Labor Party opposed. I do not think anyone would want to go back to the national ownership of things like Telstra.

The coalition clearly has a very different way of doing things. We have inherited a significant challenge from the Labor Party. The Labor Party cannot blame anyone else for the state of our nation's finances. Some of the tough decisions that will be made in the coming years will be as a result of the fact that the Labor Party did not make tough decisions, that the Labor Party often took the easy way out and that the Labor Party did not control spending and often tried to buy their way back into office. When you do that, eventually there is a bill to pay and the nation now faces that bill.

The coalition's approach is to face this situation in a calm and methodical way; in a way that builds confidence. We want people in the community to have confidence in our government; we want the business community to have confidence to invest; we want consumers to have confidence to spend. They can only have that confidence when they believe that the government knows what it is doing, when the government has a clear plan and when the government implements that plan. The government should be applauded for its efforts to bring the budget back into the black. It needs to do that responsibly and I trust that it will. As Senator Sinodinos said earlier today, we are not going to just slash and burn. We are going to make structural medium-term changes that will help deliver fiscal sustainability, in stark contrast to what we have seen over the past six years of Labor government.

Question agreed to.