Senator TEAGUE --I have two questions to put to the minister. When are you planning to table the white paper?

Senator Robert Ray --At 3.34 on Wednesday, 30 November. I should explain that the reason why we have not even put a date on it is we have been trying to get the program right. We have been negotiating with all parties in the Senate. We now know when the sitting days are. We now--I think--know when the sitting hours are. So it will be 30 November. And it should be, we think, about 3.30 in the afternoon, following noting of questions.

Senator SANDY MACDONALD --You cannot be more precise than that?

Senator Robert Ray --It is a bit difficult!

Senator TEAGUE --Presumably there will be the usual courtesies of an embargoed copy circulated earlier that day to the shadow minister?

Senator Robert Ray --It is normal that we give a copy to shadow ministers two hours before. It is normal in defence that we show a little more grace than that, leave a little more time than that, if we can. We will also do an unofficial lockup of journalists so they can read it. It is not like a budget lockup. I suppose it would be an honour system. We have allocated, I understand, two hours debate which should just about cover the interested parties in the Senate. I believe that it will then be debated in the House of Representatives a week later.

Senator TEAGUE --I have another question. When is it expected that the government will respond to the Senate committee's report on sexual harassment in the navy, army and air force?

Senator Robert Ray --We have got two imperatives here: a desire by all the management in the Senate not to do it this session, on the basis that we have got to get 24 bills or 24 packages. But I will check now as to when it is go. I understand Minister Punch had planned to table it tomorrow, but it has been delayed a week. So I imagine that it will come in this session. But as I say, the only difficulty that we have got to consider is how much time we will have to debate it in the Senate.

Senator TEAGUE --So the response is fully prepared?

Senator Robert Ray --I believe so.

Senator TEAGUE --And the tabling is a matter of negotiation with the Senate's program?

Senator Robert Ray --At the very least, I would assume that it will be tabled in the House of Representatives and indeed it will have to be tabled in the Senate. How much debating time it will get I am not sure at this stage.

Senator WOODS --Could I clarify that? I think you were nodding when you said the report had been prepared. Is that the situation?

Senator Robert Ray --It has gone to Minister Punch.

Senator WOODS --His information to me as of a few hours ago was that it was not finished.

Senator Robert Ray --Not approved. But I will get that checked right now.

Senator WOODS --We had a note from him as of an hour ago.

Senator Robert Ray --I might ask Major Gen. Gower to throw some light on that.

Major Gen. Gower --A draft government response has left the department and is currently with Mr Punch.

Senator WOODS --When did that go to Minister Punch?

Major Gen. Gower --It went last week.

Senator WOODS --My information from Minister Punch is in fact that there are some changes to be made. Is that right? You have not had any feedback at this stage, is that what you are saying?

Senator Robert Ray --Senator, that question has to come to me if I want to relay it on. I might say that whatever the department response is, in spite of the opinions to the contrary, we do not rubber-stamp everything they put in front of us. It would not be beyond Mr Punch to change or not accept some of the material accepted by the department. On the other hand, he may accept it all.

Senator WOODS --He is not going to.

Senator TEAGUE --Are there any compensation payments or, we will call them financial payments, that relate to sexual harassment matters, particularly those matters arising out of the problems on the Swan? Are there any items in supplementary estimates for that?

Major Gen. Gower --I am not aware of any advances since we discussed that in the Senate inquiry.

Senator TEAGUE --I will then wait until we hear the government's response.

Senator Robert Ray --If I could just clarify one thing, Mr Chairman, the final piece of information we are trying to get is when Mr Punch intends to put the response down in the House of Representatives, or when it is coming into the Senate, whichever is the most appropriate. We should have that in a few minutes time.

Senator TEAGUE --Is it 1 December in the Senate?

Senator Robert Ray --Mr Punch does not program the Senate.

Senator WOODS --I thought you liaised?

CHAIR --Very well said, Minister. Any further questions?

Senator MacGIBBON --Minister, you answered a question of mine a week or two ago on the amount of consultancies provided through the year. Could take on notice and advise me how many of the consultants engaged on a yearly basis over the last five financial years gained their consultancy as a result of public tender?

Senator Robert Ray --As a percentage?

Senator MacGIBBON --How many? How many were appointed on the basis of the fact that they had performed a previous consultancy satisfactorily? How many were appointed without using either process?

Senator Robert Ray --We will take those on notice, okay.

Senator MacGIBBON --In June, when I was asking about those consultancies, Mr McLeod said:

I think it should come as no surprise that as the Defence organisation is deliberately reducing the size of its in-house manpower base we are drawing more heavily on the private sector for a variety of different activities and services.

And he went on to develop that theme and finished up by saying:

as a generalisation, as long as that process continues--

that is the reduction in manpower--

one would expect the number of consultants and the value of these consultancies to gradually rise.

Yet in the annual report, there is a direct contradiction of that, where it says:

Consultants are not used to overcome staff shortages or difficulties with Average Staffing Levels.

Who is correct?

Senator Robert Ray --I do not think there is a direct contradiction there necessarily. Unfortunately, or fortunately, Mr McLeod is off doing something else at the moment, so I will ask Mr Tonkin to comment.

Mr Tonkin --I do not think there is an inconsistency between those two statements. It is one thing to use consultants where we are engaged in doing something new, or there is a transitional effect. That is not the same as saying that we have reduced our personnel and therefore will employ consultants to fill up the holes of work not done. We are tending to do things using consultants and we are trying to do something in a different sort of way.

It is not a staff filler exercise. In order to be employed you would want to do something in the most cost-effective way. So the imperative is to test whether or not we can do something by contract in the most efficient way, or by consultant in the most efficient way, or in-house. It simply is not a case of standing consultants in place of reduced staff. The cost to do so would be enormous.

Senator MacGIBBON --The costs are enormous at the moment. They are in excess of $50 million a year.

Mr Tonkin --But the unit cost of labour, between a consultant and defence employees, is most of the time not in the same ballpark.

Senator MacGIBBON --What are you saying there? Are you saying that you can employ someone as a consultant for less money?

Mr Tonkin --No, it is the other way around. The cost of a consultant, when you are paying them on a per day, per hour, per week or per year basis, will cost more--

Senator MacGIBBON --That is precisely my point.

Mr Tonkin --Therefore we would not pursue the line of employing large numbers of consultants in place of reduced labour.

Senator MacGIBBON --How is budgetary control over consultants exercised? Is it within each individual subprogram?

Mr Tonkin --Initially, the budgetary control within Defence is exercised within the portfolio as a whole by program managers, and then by subprogram managers. Decisions on the employment of consultants or the entering into of contracts is a matter for the relevant officer who holds an appropriate delegation to expend the funds.

Senator Robert Ray --Just going back to the question we were on before, I now have the letter that Mr Punch sent Senator Woods. Basically what I read out was right, but again I would not assume 1 December. Depending on programming, it will be about then.

Senator NEWMAN --The minister took on notice some questions at the beginning of that section, but I just want to pursue a little here the requirements that people have to go through in terms of advertising and so on--the transparency issues. Could you tell me now what people are required to do before they exercise their delegated authority.

Mr Gourley --The policy guidance that is included in our reference book on consultancies underlines the importance of competition in the selection of consultants. It does point out the importance in some cases of open advertising to achieve that, but it also points out that that open advertising process may not be necessary in all circumstances. The guidance provides that in some circumstances it will be sufficient to consult in-house lists of consultants that have been used before and whose services have proved to be satisfactory, or to rely upon referrals from other Commonwealth agencies which are using consultants of a similar kind.

Perhaps a good example of an instance in which this has been used quite widely within the department, and one which is a significant cause for the increase in numbers of consultants, is our use of financial consultants to provide independent outside assistance to people who have been made redundant. In those instances we have not advertised opportunities widely in each case. It is a very small consultancy and we have been prepared to rely upon lists. Clearly, those lists need to be refreshed from time to time to see that people are having an adequate opportunity to compete for these consultancies--

Senator NEWMAN --And are they?

Mr Gourley --Yes, but we do not advertise in all cases. It is a matter of judgment, according to the nature of--

Senator NEWMAN --So you are not bound to do this or bound to do that.

Mr Gourley --No.

Senator NEWMAN --If somebody has been a consultant on a particular project and then there is a further stage, what happens then? That person has a leg-in, if you like, and it is convenient to the department to have people who already know something about the issue, but it seems to me that it can also be insider or favoured treatment for a consultant. What happens then? Are there guidelines?

Mr Gourley --I do not think that there is a black-and-white answer to that sort of question. It is a matter of judgment in each case, having regard to the overriding advice in the guidelines to provide people with a reasonable opportunity to compete.

Senator NEWMAN --Yes, but if you just give it to the person who has had it before, you have not given them any opportunity to compete, have you?

Mr Gourley --As I say, I guess it is a question of what is the best course in each case. I would agree with you, I guess.

Senator MICHAEL BAUME --Under what section should we deal with the inspector-general's program of independent evaluation?

CHAIR --That is under program 7.