Tuesday, December 16, 2014

Bonfire of the bureaucracies

ALMOST 200 government agencies will be scrapped in a new search for budget savings, as the Abbott government lights a “bonfire of the quangos” to eliminate waste and help deal with deepening deficits that will be revealed on Monday.

Working groups will be shut down and expensive agencies dismantled in a bid to streamline the public service, saving more than $500 million over four years and taking staff numbers back to the levels of seven years ago.

Health and education will be next in the hunt for redundant agencies when the government sends experts into both major federal departments to find potential savings.

The Weekend Australian can ­reveal the 175 agencies to be cut ­include the Australian Government Solicitor as well as obscure committees such as a “governance board” on computer systems and a “partnership group” on student services. While the AGS had been seen as a potential asset sale, the government will instead close it down and transfer some of its staff to the Attorney-General’s Department in order to scale back overall spending.

Some agencies will be forced to share their “back-office” functions while the government will consider outsourcing a huge communications network that links 400 sites and more than 80 agencies.

Finance Minister Mathias Cormann will announce the cuts alongside new rules to try to stop the creation of new agencies that clog the bureaucracy and slow down decisions.

“This will ensure that taxpayer funds are spent wisely and efficiently and not wasted inside departments,” Senator Cormann told The Weekend Australian.

Admitting the growing pressure on the nation’s finances, Joe Hockey conceded yesterday the government could not produce a budget surplus by 2018 as hoped, the result of a shortfall in tax revenue as iron ore prices tumble.

“The challenge has been that we have seen our export prices come off dramatically,” the Treasurer said.

“Now, we rely more on iron ore export income than Australia ever has before. It is about a fifth of our exports. So when you see a dramatic price fall in commodities, it now hits our bottom line harder than previously. We have got to deal with that.”

Bill Shorten hit back at Mr Hockey’s admission yesterday that the government “could have done more marketing” to explain the budget. “Families are suffering from cuts of $6000 to their budget, millions of sick Australians are being forced to pay a GP tax, students face $100,000 degrees and every motorist is paying more in petrol tax — and Joe Hockey is worried about marketing?” the Opposition Leader said.

“This explains the government’s plans for a big expensive advertising campaign on their new GP tax and their $100,000 degrees. No amount of slick marketing will convince Australians that this budget is fair or delivering on the promises Tony Abbott made at the last election.”

Economists expect the mid-year budget update on Monday to ­reveal a deficit this year of about $40 billion, up from $29.8bn forecast in the May budget.

Senator Cormann launched the first stages of a “smaller government program” in the May budget, closing down 76 agencies and starting the sale of Defence Housing Australia, the Royal Australian Mint and Australian Hearing.

The sale of Medibank Private recouped $5.7bn, about $1bn more than expected, and the health insurance company is now listed on the sharemarket.

Senator Cormann will announce the next phase of the program on Monday with the closure of 175 agencies, taking the total number of entities abolished to 251. The savings from the overall effort will reach $539.5m over four years.

“Our focus is on ensuring that the administration of government is as efficient and as effective as possible,” Senator Cormann said.

“This means a more streamlined, accountable and responsive public service, without unnecessary overlaps and duplication.”

The AGS has 590 lawyers and other staff and charges departments for its services, producing revenue of $112.7m and income of $3.9m last year.

The decision will come as a shock to the legal community but could be a taste of things to come, with Monday’s announcement also including a new approach to using private services to replace public agencies.

A “contestability program” will assess whether some government functions should be open to competition so that private providers are encouraged to offer services.

“Alternative delivery approaches will continue to be explored,” says one of the documents to accompany the announcement.

The departments of health and education are named as two of the priorities for further work on “streamlining” the bureaucracy, amid a growing furore over job cuts and strike action in pay disputes.

Mr Abbott and his colleagues have come under fire for refusing to offer more than a 1.5 per cent pay rise to Defence Force personnel, setting this as a benchmark for the entire public sector. Community and Public Sector Union national secretary Nadine Flood called the government’s negotiating position on wage claims a “train wreck” on Wednesday as union members took industrial action to seek higher pay.

“It’s a little rich for politicians to preach restraint to Medicare mums on $55,000 a year, when pollies’ pay rises have run 41 per cent above inflation over the last decade,” Ms Flood told the ABC.

“The key issue here is in fact not pay; it is the attack on the conditions and rights of these workers.”

The government’s broader strategy is to scale back the public service so that total staff numbers return to the levels seen in 2007, when Kevin Rudd took power and launched dozens of inquiries and reviews that set up new agencies.

Monday’s announcement will note that salaries for public servants have grown 42 per cent over the past decade compared with inflation of 28 per cent.

There is no official estimate of the number of jobs to be cut by scrapping or merging agencies, but a “bonfire of the quangos” in Britain in recent years was estimated to save £2.5bn over five years.

Senator Cormann sees the Australian exercise as a similar way to eradicate “quasi-autonomous non-governmental organisations”.

He said the reviews of the health and education departments would “identify any legacy programs that are no longer a high priority, identify barriers to performance and look for opportunities to reassign limited resources to better deliver on higher policy priorities”.


Supercilious Leftist Mike Carlton comes a cropper

Mike Carlton, whose own book missed out, attacks Hal Colebatch’s book on war-time union bastardry for winning a Prime Minister’s literary award:

    "In October 1945, [Colebatch] says, [returning prisoners of war] were held penned-up on a British aircraft carrier, HMS Speaker, which had brought them home. The wharfies would not allow them ashore to meet their loved ones for 36 hours… Colebatch gives his only source for this nonsense as a letter from one W.S. Monks, dated 1995, 50 years after the event and 20 years ago. He does not reveal who this Monks might be, but there was no soldier or POW of that name in WWII"

Roger Franklin in Quadrant on-line:

    "According to Carlton, who fancies himself a naval historian, no Australian by the name of W.S. Monks ever served beneath the AIF’s Rising Sun or fell into the hands of the Japanese… What about an hourlong interview with the man who doesn’t exist?"


Just another morning of the ABC’s pet warming activists

Of course the ABC is not biased.

True, ABC Melbourne 774 got its update on the Lima global warming talks this morning from Erwin Jackson of the alarmist Climate Institute, sponsored by green carpetbaggers, and treated him like a dispassionate authority.

Sure ABC Radio National today interviewed Tim Flannery, head of the alarmist Climate Council, as if he, too, were a dispassionate expert, not even asking that he declare his own vested interests or explain any of his countless dud predictions. Heck, the interviewer didn’t even laugh at the irony of Flannery denouncing “scaremongers”, and ended by noting what a “privilege” it was to talk to the old scaremonger himself.

No, the ABC isn’t biased at all. I mean, isn’t everyone a Greens voting, Abbott-hating, Billy Bragg-playing global warming alarmist?

When will the ABC be forced to live up to its statutory duty to offer balance and a range of voices?


Abbott’s barnacle removal essential to Liberal reboot

TONY Abbott’s barnacle removal operation is in full swing — his compromises are essential and belated but progress will be slow given the government’s internal dysfunction and its brand problem with the voters.

The keys to the Prime Minister’s re-positioning lie in reshaping his policies, forcing the public to confront the economic and fiscal challenge, breaking down Senate crossbench resistance and laying the basis for a stable message running to the next election.

Abbott, however, has waited too long to recast his tactics. Those lost months come at a high price. They mean that rather than re-position with authority, his policy compromises are now cast as part of a survival operation.

They risk being devalued via a dangerous set of internal tensions — fear within the Coalition it might become a one-term government, senior ministers positioning with an eye to their own interests, a damaging public conversation about Abbott’s personal office and a media perception of a trouble-prone government that becomes self-reinforcing.

For Abbott, the frustrations are immense since the government’s problems are overwhelmingly self-inflicted. The Prime Minister remains in good spirits, resilient assertive and confident.

Yet the frustrations break through; witness his defence of his chief of staff, Peta Credlin, yesterday saying to the ABC that she wouldn’t face this criticism if her name were P-e-t-e-r and not P-e-t-a. That astonishing claim of sexism won’t impress his senior ministers.

The main task is manifest but still not accomplished — it is to recast the economic narrative.

Reality, however, is on Abbott’s side in this project. The fact the government, despite setbacks, is sticking by a budget consolidation over time involving community sacrifice highlights the inescapable fiscal story.

Economic management will be the dominant issue at the next election. The task for Abbott and his ministers will be to send a stable and consistent message based on growth, economic restructuring, infrastructure and a fiscal consolidation.

Joe Hockey concedes the return to surplus timetable in four years now needs to be pushed back. This is bowing to the inevitable. The deficit is higher but with unemployment rising, the priority is to keep the economy strong. Like Abbott, the Treasurer said 2015 would see “more of a conversation” with the public.

“We made a mistake,” Hockey said yesterday. There had been too much focus on “outcomes rather than process” in 2014. The budget update next week will be ugly. It looms, however, as a critical test for Hockey since it is an opportunity to focus on the reality of the fiscal task confronting the nation.

The speculation about Hockey’s future as Treasurer should now be over but, incredibly for Abbott, it is replaced by speculation about Credlin’s role, an issue brought to a head by Foreign Minister Julie Bishop.

It is false to think the barnacle operation makes the Senate less important. Just the reverse. The political message is Abbott’s renewed commitment to negotiate with the Senate crossbenchers to secure in 2015 his two pivotal compromise packages — a revised GP co-payment and modified university reform deal.

Legislating these two policies is crucial. They would bring a rough form of political closure to the debilitating May budget, the most unpopular for a generation. Abbott and Hockey need these policy measures, the political victory they offer and the ability to move to the second budget with more confidence.

This demands a more astute approach to the Senate crossbenchers plus a sustained sales job to the public on both the Medicare and university changes. Substituting an optional $5 GP co-payment with pensioners, concessional card holders, children under 16 and veterans exempted instead of the original $7 co-payment makes the package far more attractive. Labor won’t budget on the fundamentals. Bill Shorten’s reply was typical: it is still a GP tax, still a broken promise, and this is about Abbott protecting himself, not caring for the weak and ­vulnerable.

The Palmer United Party sounds hostile. Failure to legislate these packages in 2015 will threaten to keep the government in the electoral death zone. Whether the Senate will begin to display some responsibility for the fiscal burden facing all Australians defies prediction.

The scale of political irresponsibility will force a reckoning at some point. With more than $25 billion in savings yet to be passed, Reserve Bank governor Glenn Stevens said the issue was whether Australia had a sustainable fiscal position over the medium term. He said for the past five years ­people had voted for “good things” from government but without voting for the revenue to pay for it.

In his final speech, outgoing Treasury chief Martin Parkinson said the nation “has a structural problem at the heart of the budget” and that without action we face “a decade of deficits, rising debt” and limited policy ability to manage ­future shocks.

The leading economic officials can only issue warnings to the community. The alarming feature of the parliament is that it considers matters issue by issue and never considers the nation’s overall fiscal situation.

This week’s barnacle removal has been a mixed bag. Ideally, Abbott should have gone much further in retreating on his paid parental leave scheme and linking it to a revised childcare policy. The Opposition Leader’s response was predictable: having bagged the PPL policy all year he accused Abbott of a “signature broken promise” when he changed it.

Abbott’s aim is to rekindle his electoral base with a 2015 families package that will better target parental leave, creating room for invest­ment to deliver more affordable childcare. It seems sure to confront problems in the Senate.

Abbott presented the new $5 co-payment as a “better policy” now replacing a previously “good policy”. Frankly, this sort of language won’t cut the mustard. It doesn’t penetrate to the core issue. Abbott’s starting position must be that Medicare is financially unsustainable. Labor denies this — it is the reason Labor opposes any co-payment in principle.

The risk for the government, however, is that it has not properly road-tested the revised measure and could be left again facing an obstructionist Senate. Mark Textor, the Liberal Party’s pollster and once a pivotal adviser, was not involved in testing the acceptability of the GP revamp.

At the same time this week the government, in fits and starts, has moved towards a welcome adjustment of its climate change ­position. In a symbolic and necessary backflip, Abbott announced a qualified pledge of $200 million over four years to the Green ­Climate Fund that he once ­dismissed as Bob Brown’s bank.

Julie Bishop’s high-profile role at the Lima conference is the sort of political tonic the government needed. Bishop has no truck with climate sceptics. As a pragmatist, she believes Australia must embrace substantial and proportionate targets beyond 2020. Her role as lead negotiator on this issue injects her into the domestic politics of climate change over the next two years. Abbott’s opposition to carbon pricing and his determination to make this an electoral plus still requires a credible target and emissions reduc­tion policy. The fact power prices are easing means political momentum for ambitious emission reduction plans may only intensify.

As the government gets ready for the summer break it has two new chiefs in the key public service positions — Michael Thawley in Prime Minister and Cabinet and John Fraser at Treasury, starting next month. Much pre-Christmas housekeeping is being conducted.

A prime minister’s work is never done. Abbott needs to spend more time with his backbenchers. He needs a better cabinet process than has applied for much of 2014. And his senior ministers need to be less indulgent and more focused on the collective interests of the government.

Pivotal to the government’s future will be sorting out relations between senior ministers and the Credlin-led PM’s office. That means eliminating bad news stories that arise from poor process, excessive centralisation of power and ministers feeling they cannot get through to the PM.

There is no doubt the Victorian election result has added to the de-stabilisation within the government. The focus from early next year, however, will be the NSW election where Liberal Premier Mike Baird should score a resounding victory.

It is easy to overlook how different are the state politics of Victoria and NSW. When John Brumby’s ALP government lost in Victoria it was a close contest devoid of any general revulsion against Labor. The opposite was the case in NSW, where there was a long pent-up hostility towards NSW Labor that triggered the big change of government four years ago. That sentiment still exists; it is weaker but it has not been purged.


Health Services Union crooks ordered to pay back $8 million

THE mistress of former Health Services Union boss Michael Williamson has been ordered to repay almost $4 million allegedly rorted from the union.

In total former associates of the disgraced HSU boss were ordered to repay more than $8 million.

On Thursday the NSW Supreme Court ordered former union procurement manager Cheryl McMillan to pay the HSU $3.7 million following an early 2005 scheme in which the company Access Focus invoiced the union for supplies at an inflated rate.

The union was also trying to recover an extra $611,000 in misappropriated funds from McMillan, which the court heard was deposited in a bank account between 2005 and 2011.

Justice Richard White said this would amount to a double recovery.

But he ultimately found in favour of the HSU and ordered McMillan to pay $3,775,806.13 to the union — an amount that also included interest and court costs.  “She also was a recipient of bribes. The bribes she received were a component of the losses that the union suffered,” Justice White said.

Access Focus owner Alf Downing has also been ordered to repay the union $4,328,492.70, which like McMillan’s penalty includes interest and court costs.

Williamson was jailed in March for five years for defrauding millions of dollars from the HSU.  A judgment of $5 million was made against him in October last year but he reportedly declared bankruptcy.  Downing and McMillan have both filed petitions seeking to be declared bankrupt, the HSU said.

The HSU has been rocked by corruption scandals in recent times with former federal MP Craig Thomson found guilty of defrauding the union. He is appealing against a three-month jail sentence, with a decision expected on Monday in Melbourne.

HSU NSW Secretary Gerard Hayes told AAP he was pleased with McMillian decision.  “We have pursued these people for the past two years and this case shows the extent of the funds that were taken from HSU members,” said HSU NSW Secretary Gerard Hayes. “We intend to continue with other forms of recovery action.”

The court was told the long-running scam involved Downing getting 50 per cent of the inflated invoice, while Williamson and McMillan would split the remaining 50 per cent.  McMillan was not present in court on Thursday, nor did she mount a defence to the union’s claim.


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