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Thursday, 24 June 2010
Page: 4379

Senator MARSHALL (4:08 PM) —I understand there are some time pressures today. I rise as the Deputy Chair of the Education, Employment and Workplace Relations References Committee to speak about its inquiry into the Primary Schools for the 21st Century program.

The government senators on this committee have provided a dissenting report to address the imbalances in the committee majority report and present the evidence showing the support for the P21 program. As noted in the dissenting report, it is disappointing to see the coalition refuse to acknowledge in any way the evidence showing the success of and support for the Primary Schools for the 21st Century program, known as P21. Coalition senators in their interim report have focused on a relatively small number of examples, which have received disproportionate attention, in an attempt to discredit this successful and welcome initiative. Submissions and evidence to the committee show a high level of support for the new facilities being provided under the program. In addition, the head of the Building the Education Revolution Implementation Taskforce recently told a New South Wales parliamentary inquiry about the success of the program. You will see none of that evidence in the committee majority report.

Let’s start from the beginning with the facts. Building the Education Revolution, or BER, is the largest component of the government’s $42 billion Nation Building and Jobs Plan, announced on 3 February 2009. BER represents an investment of more than one per cent of GDP and is the biggest school capital infrastructure program in Australia’s history. The objectives of the program were agreed by ministers and are expressed in the COAG National Partnership Agreement on the Nation Building and Jobs Plan. This contains the program’s two main objectives. The first is to provide economic stimulus through the rapid construction and refurbishment of school infrastructure and the second is to build learning environments to help children, families and communities participate in activities that will support achievement, develop learning potential and bring communities together.

The evidence shows that the program has been successful in its primary aim of supporting the economy and jobs in local communities through the global financial crisis. As a stimulus measure there is no denying the program’s success. It had a real effect on local communities and employment well before any construction commenced. BER has materially supported the non-residential construction sector, and this was acknowledged by the Australian National Audit Office in their audit of the program. Companies in the construction sector, for example, could anticipate work and were therefore able to retain staff.

The committee was advised that jobs are being measured by Treasury at the level of the entire economic stimulus plan. DEEWR added that the collection of job data at the project level serves a different purpose and is useful for the schools and local communities to be able to quantify the effect of each project. It is worth noting that P21 has supported employment not only in the building and construction sector but in other employment sectors as well. Planners, quantity surveyors, architects, electrical engineers, hydraulic consultants and clerical staff are among the occupations supported. It is pleasing to note that not only jobs but skills and apprenticeships are being created. Again, you will see none of that in the committee majority’s report.

Government senators note that the number of complaints received about implementation of P21 projects amount to less than one per cent. Ninety-eight per cent of projects have now commenced and 68 per cent have commenced construction. Eight hundred and ninety-four projects have been completed and over 9,000 are underway. These projects are transforming schools. This is what you will not hear about in the committee majority’s report. Coalition senators have ignored the principals, teachers and parents who are delighted with their P21 projects.

Let’s hear the evidence of this support. The committee heard that the program has brought forward capital works for some schools by 20 to 30 years. The Australian Primary Principals Association conducted a survey which found that the overwhelming majority of schools, 97 per cent, reported that their students would benefit from the program. The Australian National Audit Office conducted its own survey, which found that more than 95 per cent of school principals saw the program as providing ‘ongoing value to their school and school community’. The committee received positive submissions from schools and evidence showing support for the program.

Evidence provided to the committee showed that the P21 program has sufficient flexibility built in to recognise the diversity of school and student needs and sites. Guidelines were developed by the Department of Education, Employment and Workplace Relations to assist states, territories, block grant authorities and schools to submit project proposals. Given the scale of the program, it was anticipated that the guidelines would need to be amended as issues arose. The committee heard that the guidelines were easy to deal with and sufficiently flexible and that when issues arose they were dealt with sensibly and quickly. Government senators note that the ANAO made no recommendations to DEEWR regarding its administration of the program.

The dissenting report notes the differences between the government and non-government systems. Independent and Catholic schools are very experienced in organising capital works. They have existing processes and established relationships with architects and builders. It is clear that, despite the increased scale and complexity of the P21 program, these mechanisms worked well for the independent sector and the Catholic system.

The dissenting report also notes the extra challenges facing the government sector, where schools are managed in a system. In many cases the knowledge and skills to run large projects and the established relationships with builders and architects do not exist. Central management was therefore seen by some states to offer the best solution to achieving the challenging time frames for P21 projects, and the overwhelming evidence is that it has.

Turning to questions of value for money, the dissenting report emphasises that achievement of value for money in the government sector cannot be assessed by simply dividing the notional amount of money a school could receive by the size of a building to come up with the cost per square metre. Effectively, the decision was taken that, as government schools operate in a system, the total money available was pooled across the system and common contractual arrangements were entered into for buildings of a certain size. It is important to remember that there will be variations in construction costs depending on location and specific site requirements. In the government system, therefore, not every school was given the full notional amount in dollar terms. Where a project comes in under cost, it will subsidise those projects where additional factors mean that they are more expensive.

Importantly, and of course you will see no acknowledgement of this in the committee majority report, the committee received no evidence of any criminal or illegal behaviour. The committee heard that the National Partnership Agreement on the Nation Building and Jobs Plan makes explicit reference to adopting the best value approach in contracting and tendering. In addition DEEWR told the committee that the bilateral agreements with each state and territory include the requirement that each education authority require compliance with relevant procurement rules which encompass the concept of value for money. DEEWR also told the committee that if there are any problems money can be withheld, suspended and repaid.

However, the government is nonetheless concerned to receive assurances that projects are achieving value for money and that any genuine issues are addressed. To this end, the government has established the BER Implementation Taskforce, headed by Mr Brad Orgill, to respond to allegations regarding value for money. Mr Orgill is due to report during August 2010 and again in November 2010. It has not been acknowledged in the committee majority’s report that there will be time to respond to any recommendations made by Mr Orgill. The next $2 billion payment will be made on 1 July 2010 and then further payments totalling $3.5 billion will not be released until November 2010 and then March 2011. The money will not be fully expended on 1 July but will be held by education authorities. If there are any problems, money can be recovered and payments can be suspended. Government senators note the significant disruption and confusion that would be caused by delaying all BER funding, as is being recommended by the coalition. Appropriate investigation of schools with value for money concerns is underway by the BER Implementation Taskforce and any recommendations in this area will be carefully considered.

In summary, mechanisms are in place to ensure that genuine issues are addressed. The imbalance in the committee majority’s report needs to be addressed with the facts. The government took action to protect the economy and jobs during the global financial crisis. In addition to that, the personal accounts provided to the committee and quoted in the dissenting report show that the P21 investment is transformational for schools. This program will leave a legacy of improved school infrastructure and facilities which will contribute to the quality of education provided in schools and lead to improved educational outcomes.