The PRESIDENT —I am sorry I was not here when Dr Uhr appeared before the committee. I had certainly read his submission and it is a very convincing argument. I did not have any questions about it anyway. Mr John Templeton, thank you for coming. The committee prefers to take its evidence in public but should you wish at any stage to give any evidence or answer to questions in camera you may make an application to do so. But you should note that the Senate or the committee itself may consider it necessary to authorise the subsequent publication of any such evidence. I invite you to make an opening statement. At the conclusion, senators may ask questions if they wish to do so.

Mr Templeton —The only statement I would like to make is that I understand the committee has been provided with a copy of the submission which I, along with other departmental heads, made to the Presiding Officers in August last year on the issue of amalgamation. While that document was not created for the purpose of this committee, I hope it is of some use to the committee in its deliberations.

The PRESIDENT —I think all members have a copy of it.

Senator MacGIBBON —I want to ask some questions about the two staffing and appropriation tables that you have on page 1 and page 2, Mr Templeton. All the staff have increased, except for the Parliamentary Library which has decreased in that 10-year period. When we look at the increase in costings for the departments, there is no discernible pattern of common increase ratios. For example, the Department of the Parliamentary Reporting Staff goes from $7.7 million in June 1987 to $40.5 million in 30 June 1996. Is that correct?

Mr Templeton —That is correct.

Senator MacGIBBON —How did that come about?

Mr Templeton —The figures at 30 June 1987 were prior to this building being occupied. That was the last full financial year in the old building. At that time DPRS performed only one function, which was Hansard. Subsequent to the move to this building, DPRS was given responsibility for information technology and the sound and vision systems in the new building. Those functions between them contribute about 70 per cent of the department's appropriations.

If you take that figure in the second column at 30 June 1996, the $40.5 million includes $7.65 million for capital for asset replacement for the department. So the running costs for the department are only about $32.5 million-$33 million. The functions which DPRS performed at the end of 1996 were significantly different and much greater than DPRS performed in the old building before there was a central computing function and a central television and radio broadcasting function.

Senator MacGIBBON —What is the cost of Hansard for 30 June 1996?

Mr Templeton —The cost of Hansard would have been around $10 million to $10.2 million.

Senator MacGIBBON —How accurate is that estimate?

Mr Templeton —For June 1996?

Senator MacGIBBON —Yes.

Mr Templeton —Reasonably accurate.

Senator BOURNE —Has there been any suggestion of outsourcing Hansard? We are outsourcing legal court reporters and things like that.

Mr Templeton —No. There has been no suggestion to outsource the Hansard function. We, in DPRS, are bolstering our capacity for service provision by using some external service providers from time to time to help us with peak workloads. But there is no suggestion that I have heard of or that anyone has put to me that that function should be taken from being an in-house parliamentary function.

Senator BOURNE —I am very pleased to hear it. Thank you.

Senator MacGIBBON —Let us look at Joint House. Joint House went from $12.1 million to $40.7 million. How did that come about, given the fact that through that period, I would assume, we contracted out the dining room, which was running at a substantial loss of about $2 million a year, wasn't it? It is now hands off. There is no subsidy going to the caterers.

Mr Templeton —I am not really the best person to ask about Joint House. Mr Bolton would be able to give you a run-through on those increases but, equally, when you consider the number of maintenance staff, gardening staff and technical support staff that this building requires as opposed to the old building--this building cost about $1.2 billion to build--the maintenance and support costs for the care and maintenance of the fabric will be that much greater than the old building.

Senator FAULKNER —I have had an opportunity to quickly glance through the minute you provided to the Speaker and Madam President as a result of the memorandum that was circulated by senior staff in the offices of the Speaker and the President on 27 June. What other input has your department had as events have transpired since that time?

Mr Templeton —Both DPRS and DPL had a member on the working party that produced the document Managing the Parliament. Those submissions that each of the departmental heads were requested to provide, I suppose, really were the formal initial contribution. I think that would be about the formal extent of it, although from time to time the Speaker and the President did raise with us issues, if you like, relevant to the question of amalgamation.

Senator FAULKNER —So this is the only formal submission?

Mr Templeton —That I am aware of, yes.

Senator FAULKNER —Well, you would be aware of it.

Mr Templeton —I am racking my brain. I can't think of anything else that I have written.

Senator FAULKNER —Is this the first time that that has been made public beyond the working party?

Mr Templeton —No. I think copies of the submissions the departmental heads provided to the President and the Speaker were circulated to the other departmental heads shortly before the working party was created, and I think there was discussion at a time when each of us was drafting our own particular documents. There was discussion amongst various people in the building--just swapping ideas and thoughts.

Senator FAULKNER —While in a sense your submission of 22 August canvasses options, would it be fair to say that it does not make strong recommendations about amalgamation?

Mr Templeton —I suppose it started from the premise of the advice we received from the offices of the Speaker and the President, that they wished us to look at some aspects of amalgamation. Given, I suppose, that the starting point for the pieces of paper was that amalgamation was a possibility, a likelihood, I really went through a number of options.

Senator FAULKNER —Thank you for that. But going through a number of options is a little different, I suppose, from coming up with some firm recommendations and views as to which of those might be the best option--strong recommendations, I suppose, from your department.

Mr Templeton —I thought from the way I had written it that my position was fairly clear, to be honest.

Senator ROBERT RAY —That is that you oppose amalgamation?

Mr Templeton —No. I think we can make some changes within the building to provide services more effectively.

Senator ROBERT RAY —Would you like to outline those?

Mr Templeton —I think the starting point has to be that, whatever is done to change the administration in the parliamentary departments, the objective should be not a simple cost cutting exercise but giving the parliament the ability to use all its resources to provide its services to the maximum extent and to the best possible service level available. I think we can rearrange our structures within the environment of the parliament to do that.

I do not think we should go into any exercise that is simply attempting to cut costs because I think we can, as I said, reallocate our costs and use our resources more effectively. The total resources available to the parliament should be maintained. The principal way I think we can make some changes and improvements over time is by bringing together some of the corporate services areas. The money that is freed up as a result of that should go into the client service programs across the building.

Senator ROBERT RAY —But isn't every proposal to bring together the corporate services areas almost struck down by the line of command, given the two chamber departments, et cetera? It is very hard to get a structure to supervise, if you like, a joint corporate services area.

Mr Templeton —It depends which model we are talking about. I do not think the two-department option is the most effective way of doing that.

Senator ROBERT RAY —I gathered that, yes.

Mr Templeton —It depends if you are talking about one, two or three departments. I would assume that if there were three departments--the Department of House of Representatives, the Department of the Senate and a service department bringing together the joint services--the Department of the House of Representatives would still have a corporate services function and the Department of the Senate would still have its corporate services function providing services to those two chamber departments.

Where you would make some savings is by bringing together the corporate services area of the three joint departments. It is important that the functions and roles of the chamber departments are maintained. They are the reason for the existence of the three service departments. We are here to serve the Senate and the House of Representatives.

The PRESIDENT —If you have, in a sense, three departments--the chambers and one service department--is there any bar then to the functions of corporate services such as wages and that sort of administration being done in one place for the whole building?

Mr Templeton —It is technically possible. I am not sure that it would be all that practical. It would depend on how much of the chamber department's corporate areas were, if you like, devoted solely to their own internal support. My understanding of both the chamber departments is that a lot of their corporate services areas are involved in processing entitlements and matters with respect to senators and members. I think the chamber departments not unreasonably take the view that that is something that is their core business in supporting senators and members.

The PRESIDENT —So there would be no special savings in having just one large group compared with, say, three?

Mr Templeton —You would make some savings over time. The problem would be--and I do not think it would be particularly great--then trying to, if you like, re-apportion those savings back between the three departments. The other point is that, where functions are being carried out by people in other departments, you get into difficulties of people having to have multiple delegations and lines of authority and priority setting as between the different entities being serviced.

Senator BOURNE —Where could you find the savings in the corporate services departments? It occurs to me that they are not sitting around with time on their hands now and that there are functions which fill up their time. I remember when senators and members got one extra staff many years ago. We all thought that life would be easier, but it was not, because the time was immediately filled up.

Cutting down is more difficult. I imagine they would not be dealing with paying their own and each other's wages and that sort of thing. But there cannot be that many of them. I cannot see that we could actually diminish corporate services so much that they would not be immensely overworked if we did go down and if we did make those savings. Is that a reasonable thing to say or not?

Mr Templeton —The problem you run into is that, whenever you have a statutorily separate department, there are certain statutory requirements that that department must meet under a range of legislation. At the moment, it is the Audit Act, shortly to be the Financial Management Accountability Act, the occupational health and safety legislation and a range of other acts.

If you like, there is a core number of people you need to carry out those tasks and to ensure that, for example, the same person is not authorising a particular payment and checking it. You have to have a split between that payment function and the checking function, and that cuts across a number of areas. You really get down to the starting level, which is at a point where, if you were to amalgamate the departments, you start to get economies of scale in processing areas fairly soon after that. But there is a minimum number of staff that you need, regardless of whether you are doing 100 transactions or a few thousand transactions and you do not really get full benefit out of all those staff. It is partly a function of very small entities being required to meet the full range of statutory obligations that apply to all departments regardless of their size.

A very good example is in areas of equal employment opportunity. We are required to have separate EEO plans. We are required to have staff specifically designated to look after EEO. In the two departments that I have, those staff will probably be doing other duties as well. But it really gets down to this question of what is the minimum number that you need regardless of the size of an entity and then where do you start getting economies of scale from there on.

Also, as we go over time, particularly in personnel and financial transaction areas, increasingly we will have available to us IT that will enable us to use all our resources much more effectively. That should help the savings as well or help the gradual staff numbers reduction. I do not think anyone is in the business of trying to say that we will cut to the bone and then work our staff to death. That is absolutely of no interest to anyone because it is not in the interests of the staff, you do not get good morale and staff will not stay.

Senator BOURNE —True. Thanks.

Senator MacGIBBON —With those services you are talking about--pay, allowances, equal opportunity and all that sort of business--why can't they just be picked up and dumped on the Department of Administrative Services? Why can't they be the provider of those services and get the economy of scale--

Mr Templeton —To us specifically or as a general thing across the board?

Senator MacGIBBON —Just as a generality.

Mr Templeton —You do get into this problem area: if people in one department are servicing three, four or five departments, you have accountability questions which relate to each specific department.

Senator MacGIBBON —Yes, but we have acute accountability problems at the present time, as you are aware, because the accounting standards for the Department of the Senate are different to the standards or the practices--

Senator ROBERT RAY —Is there some confusion? Are you talking about just payment of members of parliament or are you talking about Mr Templeton's staff? I think he may be as confused as I am.

Senator MacGIBBON —It is the same principle surely. It is purely a service function we are talking about here--

Mr Templeton —Yes.

Senator MacGIBBON —Meeting agreed Commonwealth standards with respect to conditions of pay and conditions of service. There is nothing uniquely different between the reporting service, the library service or--

Mr Templeton —No, we all operate under the same basic legislation.

Senator ROBERT RAY —Just hold on there. This government, as I understand it, plans to excise out parliamentary employees from the Public Service in the next few months as part of their Public Service reform. That surely won't apply when that occurs.

Mr Templeton —If I could pick up on that question: certainly it is the government's intention that the replacement Public Service Act will not apply to the parliament and that we will have parliament specific legislation. But other legislation--such as the Financial Management Accountability Act, which will replace the Audit Act, occupational health and safety legislation; those sorts of acts--will continue to apply to us.

Senator ROBERT RAY —Yes, I was just trying to help Senator MacGibbon if that is the case. I certainly think Admin Services will take care over the payment of travelling allowance and salaries for MPs in the near future. That is one less burden on the administration.

The PRESIDENT —There being no further questions, thank you.

[10.54 a.m.]