Doorstop - Brisbane (16)

29 December 2017






SUBJECTS:  Government spending on contactors and consultants, cuts to Public Service, internal LNP brawling, social security spending 


JIM CHALMERS, SHADOW MINISTER FOR FINANCE: Thanks very much everyone for coming out today. I wanted to cover two things, the story in the Australian about contractors and consultants, and also open warfare in the LNP about the future of the LNP here in Queensland.


The Turnbull Government has been caught out wasting tens of billions of dollars on consultants and contractors at the same time as they lecture middle Australia about the need to rein in spending on health and education and pensions.


These new revelations show just how much money that the Turnbull Government is wasting on those contractors and consultants to do work externally that could be done in many cases by the Australian Public Service if it hadn’t been so savagely cut back.


What we’re seeing in these new numbers today is a Turnbull Government which is so woefully out of touch that they spend billions of dollars of taxpayer money on this external advice, project management, branding, marketing, lobbying, all of these sorts of things and this spending comes at the cost of better health and education services in this country.


Now the difference between money spent on this sort of tendering in the last full year of Labor, and the last year under Turnbull and Mathias Cormann is $2.2 billion.  We’re seeing an extra $2.2 billion spent in the last year of Turnbull and Cormann, than in the last year of the Labor Government.


This just shows you how warped the priorities of Malcolm Turnbull and Mathias Cormann are, wasting billions of dollars on external providers while they savagely cut back on the services that Australians need and deserve.


When we have billions of dollars spent on external contracts and consultants, when we have a $65 billion handout for big business, when we have tax cuts for millionaires, you can see why we have record debt in this country, record and growing debt on Mathias Cormann and Malcolm Turnbull's watch, despite their savage cuts to health and education.


Despite all of their lectures about the need to rein in spending on health and education and pensions, we have these new revelations out today.


And with warped priorities like these, is it any wonder that the Australian people have rightly concluded that this Turnbull Government is the most out of touch Government  that we have seen in Australian political history?


We are also seeing today another bout of open conflict in the Liberal and National Parties, this time over the name and structure of the LNP here in Queensland.


We have had Senator Fierravanti-Wells put an idea out there about splitting the LNP, which a Queensland Senator - James McGrath - has described, and I’m quoting, so forgive me, as "batshit crazy".


And what this shows is that the LNP intends to finish the year as they spent much of the year, openly brawling with each other about internal issues while the people of Queensland and the people of Australia don't get a look in.


Australians care deeply about stagnant wages and insecure work and the cost of living. They don't care what the LNP calls itself in Queensland. They don't care about the internal brawling, the deep divisions and dysfunction in the LNP here in Queensland. They care about those stagnant wages and the cost of living.


Here's a bit of free advice for the Coalition under Malcolm Turnbull: maybe it's not the name of your Party or structure of your Party that people in Queensland are absolutely filthy about. Maybe it's your cuts to penalty rates, maybe it's your tax cuts for the top end of town. Maybe it's the tax cuts for millionaires. Maybe it’s the fact you think a Royal Commission into banking scandals is and I quote “regrettable.”


All of these things are the reasons why Queenslanders and Australians have turned so substantially this year on the Liberal and National Parties, whatever they call themselves, and they should stop spending all of their time brawling with each other about internal matters and start focusing on the things that actually matter to Queenslanders, like wages, like insecure work, like the cost of living, like decent health and education services.


JOURNALIST: Is the story in The Australian wrong? The Government says it is, it says the figures are overstated, it says the journalist has put figures from multiple years in the $2016/17 value for consultancies including a $1.8 billion contract taken out in 2010 by Kevin Rudd. Are these figures accurate?


CHALMERS: These figures are from the Government's own Austender site. It is a bit rich for Mathias Cormann to say that about the numbers which are available from the Government on their own Austender site. The fact remains that the difference in spending on external contractors and consultants  between the last full year of Labor and the last year under Mathias Cormann and Malcolm Turnbull is $2.2 billion.


And when you look more specifically at the money that is being spent on labour hire, that is a multiple of what it was under Labor. When you look at the money spent on lobbying and branding and marketing and project management and risk management and all of these sorts of individual types of spending, you will see that there have been really substantial blow-outs on Mathias Cormann's watch.


I can understand why he is deeply embarrassed about these revelations today. This is not what he wanted the Australian people to understand, at the same time as he lectures them about the need to rein in spending on health and education and pensions.


JOURNALIST: The Queensland State Government also uses a lot of consultants and I've read over the years reports from the big four. What makes you guys any better than the Federal Government?


CHALMERS: The point I am making is that in many cases - not all cases but many cases - this work that is being funded at a cost of billions of dollars to the Australian taxpayer, can frequently be done by the public service if the public service isn't hollowed out as significantly as it has been by Mathias Cormann and Malcolm Turnbull and the Federal Liberal Party.


There are times when consultants are necessary, the point that we are making is that this almost $10 billion spent in one year alone is excessive. Especially when it comes at the cost of the work that the public service could do, which is better services and better advice.


What we're seeing instead is an arbitrary head count on the public service which incentivises Government departments to spend up big of taxpayers' dollars on consultants and contractors.


JOURNALIST: Would you like to see a monetary cap for consultancy services?


CHALMERS: We'd like to see a bit of sanity when it comes to this spending on external contractors and consultants. There is a time when it is necessary but overwhelmingly I think under this Government, we're seeing extraordinary growth in labour hire, for example, which is more expensive to the Government and gives you an inferior outcome.


It takes a special type of incompetence to spend more money on an inferior outcome when it comes to things like labour hire. No wonder we have record and growing debt on Mathias Cormann's watch.


JOURNALIST: Jim, 10 years ago Kevin Rudd said a similar thing about consultants, but year later when he was in power, the Government was spending more. What Labor's credibility on the spending issue?


CHALMERS: If you look at the final full year of the Labor Government which was 2012/13, you will see that spending on external consultants was something like $7.5 billion. You will see that in the most recent year under Mathias Cormann and Malcolm Turnbull it is $9.7 billion. We are talking about an extra more than $2 billion spent on consultants and contractors between the last full year of Labor and the last full year under the Coalition. I think those facts speak for themselves.


JOURNALIST: The Government tell me if you were to use the same methodology for what was paid to consultants in 2013/14, Labor's figure would have been $15 billion. Are you being hypocritical?


CHALMERS: Even your question then reveals the type of trickery that they are trying to inflict on us here. You referred to a number from 13/14. Labor was in government for one-quarter of that period. The Coalition were in Government for three-quarters of that period. Many of these contracts and consultants were engaged after the change of Government. There was an extraordinary amount spent in that year and that was a year governed mostly by - when Mathias Cormann was the Finance Minister. The relevant comparison is the last full year under Labor, that's the comparison that I've just made, 7.5 versus 9.7 and those facts speak for themselves.


I can understand why Mathias Cormann is deeply embarrassed about the figures. With all the lectures about the need to rein in spending at the same time he is authorising personally, the spending of billions of dollars of taxpayer money on these external consultants and contractors, at the same time as they want to hack back on health and education in this country.


JOURNALIST: So is the relationship between Government Department management and consultants too cosy?


CHALMERS: Look, there will always be a need for external advice. The problem that we have identified, that has been identified by the Australian newspaper today is that the cost of many of these types of engagements, particularly for example labour hire, but also lobbying and marketing and a lot of the examples that I’ve used, the cost is substantially bigger in the most recent year than it was in the first year of Mathias Cormann and Malcolm Turnbull and Tony Abbott’s Government. That is the point we’re making, there will always be the need for private sector engagement in some areas of Government work but we think it’s excessive, that’s the point we are making today.


JOURNALIST: Are you concerned by reports China’s breaching sanctions to sell oil to China as Trump alleges?


CHALMERS: Look, that is principally a matter between the Americans and the Chinese. I’ve read those reports but I’ve not followed the issue as closely as others. I’ll leave that for the Americans and the Chinese to explain.


JOURNALIST: I’ve just got one for Channel 10 for you as well. Is it acceptable that Australian workers are forking out $83 dollars per week or three hours work to fund Australia’s increasing welfare needs?


CHALMERS: I saw those numbers about the amount of money that is invested in social security in this country and I think what they showed is that a lot of the money that is spent on so-called welfare is spent on pensions, the age pension for example, and I don’t get the sense as I move around the community that the Australian people begrudge senior Australians a pension that they have earned, that they’re entitled to by contributing to this country for so long. An enormous proportion of that figure that you’ve identified is the age pension, but also family payments and other types of social security. We’ve got a very well targeted social security system in this country, only a tiny proportion of that $83 goes for example to Newstart, most of it goes to family payments and pensions and I think the Australian people are okay with that.


Thanks everyone.