Mr JENKINS(5.17 p.m.) —Tempted as I am to enter into a discussion about parliamentary standards on the basis of the contribution by the honourable member for Longman (Mr Brough), I will reply to just one part of the discussion he had of the way in which the place was run in the earlier session this year. What he did not tell the House in the grievance debate today is that on the Wednesday in May that he mentioned, when there were a number of motions moved by the opposition to adjourn the debate—which is a distinct difference from gagging the debate or guillotining it; all it means is we were wishing to adjourn the debate and come back the next day—the point we were trying to make was that at very short notice on that Wednesday the opposition were informed that we were going to go beyond the 8 o'clock adjournment, as put down in the standing orders.

What it was about was the conditions under which this place is run. It goes not only to the efficiencies of us as members but the efficiencies of the many people who support us and work within the House. This was not the first Wednesday that we had been asked to sit beyond the agreed 8 o'clock adjournment. So when the honourable member for Longman wants to enter into debate about standards he might be best served, if he wishes to have this debate, in sponsoring a debate at private members' time on Monday about standards because there are a lot of things that we could discuss about the behaviour over time of oppositions in the past. We could also discuss what attempts have been made by the Labor Party when in government and, indeed, the consideration and cooperation in some aspects by members of the coalition in trying to improve the way this place works. In fairness, he should rely on a proper discussion of parliamentary standards.

Today what I wish to talk about, and sincerely grieve about, is the state of local government in Victoria. There are a number of aspects which one could talk about concerning the state of local government in Victoria but I especially want to talk about the concept of compulsory competitive tendering. The compulsory competitive tendering that has been entered into in the Victorian situation is a phenomenon that is legislated for. An artificial target has been set by the Kennett government, which at the moment stands at 50 per cent. So 50 per cent of the activities of local government must be put out to tendering.

What we have found is that from time to time some of the municipalities, when they have started out on trying to achieve this target, have been very close to it because what is included is outside capital works. So, for instance, the City of Whittlesea was having a major entertainment and function centre built under a private contract. Because that capital works contract was put into its original percentage it looked all right. But now it has to proceed at a greater rate of knots to try to achieve this artificial target.

What is this artificial target about? It is about an ideology, a form of right-wing ideology that from time to time masquerades as economic rationalism, that in some way the free market can achieve great things in all matters. But it must be remembered when we talk about compulsory competitive tendering—the so-called CCT process—that we are not just talking about private companies deciding to outsource some of their operations to subcontractors; what we are talking about is a sphere of responsible government.

Whether that sphere of responsible government is, in the main, in the hands of unelected commissioners or not, it is a sphere of government and CCT is supposed to achieve greater efficiencies by ensuring that the services and functions are market tested, as the jargon would have it. The purpose of the market testing is to see at what cost the market will perform the same service. Expenditure over the lowest bid supposedly indicates a surplus that indicates inefficiency, according to the theory. But I would contend that many of the functions of local government which are in the public or community interest should not be considered in these strictly up and down commercial terms.

The result of the CCT process is that large portions of local government bureaucracy are disappearing and the private sector is performing those functions. In the past, local governments were the decision makers, the collectors of the funds, and the people who allocated the funds for and delivered services. Under CCT, and in accordance with the current right-wing philosophy, those three functions are separated. In the purest form of this separation there are only two entities—a purchaser and a provider.

The local government model of CCT in Victoria leaves much to be desired. Far from delivering great efficiencies, the whole process has been costly to local government, has destroyed the jobs of former employees, and in many cases has resulted in severe reductions in the quality of services provided by local government.

The costs begin with the writing of specifications for the tenders. Who have to write up those tenders? The council staff in the areas that are being opened up to competitive tendering—because they are the ones who know.

In one recent example, staff were required to provide no fewer than four different sets of specifications so that a decision could be made about which set would be put to tender. Imagine the amount of time put into writing those specifications. When it has to be done four times over, is that efficiency? I think not. We must also question the morality of asking workers in local government to put in place something that jeopardises their own employment.

Under the Victorian model of CCT, in-house bids are permitted. In putting together in-house bids, council workers are offered assistance by way of additional resources. The experience has been that, in the end, the overwhelming majority of tenders have gone to local in-house bids. But already we have lost an efficiency because of the additional cost of putting together the internal bids—a cost over and above the setting of the specifications.

In a recent example in the City of Whittlesea, an in-house team made the only bid for a tender. I put it to you, Mr Deputy Speaker, that the rules of the marketplace suggest that if that tender were in order that team should have got it because nobody else offered to do it at any cost. But the in-house bid was rejected because the goalposts were shifted; they were told that there was an upper limit on the tender. There was no discussion in the specifications about that before the event, only a line item somewhere in the council's budget papers. So where is the advantage to the community and those who need the services provided?

The board of the local regional library service has decided to consider among the proposals for the tendering of the library one that separates the service into three components. That is despite the fact that no other library board has separated functions.

The library staff recommended to the board that the library be tendered as a whole service. That recommendation was ignored. We now will have a tendering process where offers are made for the whole service and offers are made for three components of it.

Furthermore, an independent study undertaken by KPMG for the British Department of Natural Heritage found that CCT for public libraries was `inappropriate' because the prospect of significant cost reduction was limited. It found that there was no natural market for the delivery of public library services because the skills required were so specialised and `not readily found'. It found that the cost of implementing the whole process was substantial and that the overwhelming weight of evidence suggested that the library service `is and should continue to be a "core" public sector activity'.

The CCT process is a farrago of contradictions. It is a poor ideological experiment and bad social policy. CCT has been applied arbitrarily to fixed percentages of local government services on the assumption that the private sector will always do it better. That assumption is palpably false.

CCT has been applied without any thought as to the appropriate services to subject to competition. It has been suggested that a large number of in-house bids are successful. (Time expired)