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Monday, 15 June 2009
Page: 6054


Mr RAMSEY (8:50 PM) —I would like to speak about the great concerns I have with the government’s Building the Education Revolution, which appears by the day to be running into more and more horror stories of maladministration and profiteering. The government is attempting to shovel more than $14 billion into the construction sector at such a rate as to cause widespread distortions and cost blow-outs across Australia. It is difficult to believe that the program is focused on educational outcomes rather than base political outcomes. I raised just such a case in question time in parliament two weeks ago, highlighting the cost blow-outs occurring across Australia in this sector. This was the debacle of the Cleve Area School in my electorate. I quote from parts of the public letter from the school council:

In March this year, our school applied for the $2 million National School Pride grant that we qualified for. We were led to believe that we could afford a structure similar to the Hewitt Primary School (built in 2005 for $1.8 million) after investigating the construction costs, factoring in a post-Olympic reduction in material costs and even allowing for the imposition of the grossly inequitable country loading.

We also believed that by using a standard design, the building should have remained affordable. According to your article on the National School Pride program in March edition of Education news …“standardising buildings leads to efficiencies and standardisation of the building industry…using standardised building means that the delivery process is optimised”.

Our delight in being successful in our Round 1 Application turned to disappointment when in April we were informed that we could not afford the 8-room Hewitt Model, which would now cost $3.3 million to supply in Cleve. We were told that we would get the 6 or 7 room Woodside model that did not meet all our requirements, but would have been an acceptable result.

Early last week—

This was three weeks ago—

however, this also suddenly became “unaffordable”, and our allocation was a 4-room structure, half the size of our original plans. As if this was not frustrating enough, within the next working day, that was also out of our reach (at a cost of over half a million dollars a classroom), and we had only hours to commit to a cheaper, smaller and less appealing structure.

We reiterate that this was just hours to decide on a building that would stand in our school for years to come, as a representation of your government’s investment in the advancement of education for the students of Cleve. We negotiated an extra two days to make a decision, allowing for staff and Governing Council to meet, discuss our options and try to make an informed decision that supported our initial education goals and requirements.

They go on to articulate how disappointed and bewildered they were and how they ended up settling for:

… the only structure that fell within our price range, a collection of transportable classrooms with decking.

I am pleased to report that following on from my raising this issue in the House, the South Australian education department, DECS, have reopened their negotiations with the school and are attempting to come to a much better value agreement with a local builder, and I thank the Minister for Education for any influence she may have had in that area. But this is systemic. It is a recurring theme running through this whole program—rip-offs; inflexible guidelines; state governments top, bottom and middle slicing the payments at every opportunity. Schools in South Australia and Australian taxpayers are being ripped off.

I have had a great deal of contact with people on this and similar issues. Disturbingly, while schools are prepared to come and tell me about the blatant ripping off of the taxpayers in this exercise, there is a great reluctance to go on the record publicly because they are afraid of retaliation from both state and federal governments. What an indictment! They are too scared to speak out about the systemic ripping off of the system. What does this tell us about the respective governments? One school principal—and I point out that South Australian principals are prohibited from speaking out on the issue—told me that the building they had selected was going to cost $1.4 million. When the school showed the plans to a local builder, he said he could not possibly charge more than $800,000. That is not quite double, but it is getting there. Other schools are being offered structures called COLAs, covered outdoor learning areas. Basically they are haysheds—that is, a roof with legs. In one instance, they are costing more to build with the program preferred builder than a similar structure quoted by a local builder—the same size, with walls, with a concrete floor and fitted out with interior structures for considerably less money. Roofs are cheap. The money is in the walls and the floor. Just what is going on?

Mr Gary Thornley from Reed Construction Data, who is quoted as the industry bible on building costs, said in last Saturday’s Australian:

… an average school hall should cost no more than $1000 per square metre to build.

…            …            …

… schools with more than 400 students can apply for $3m in funding to build a multipurpose hall …

Mr Thornley is quoted as saying schools should be able to build halls for about half that figure, and that figure is generous. That underlines my assertion. We are seeing a 100 per cent blow-out in costs. Even if we believe the package is well guided and will have significant positive effects on educational outcomes—and that is a brave assumption—we are likely to get less than $7 billion worth of value.

Another principal has told me that their school was sent a list by DECS of long-term maintenance issues and told to use the School Pride funding for that purpose. This is clearly a case of cost shifting by the state government and is against the guidelines. But, once again, the school leadership believe that if they go public they will be penalised. Further to that, in South Australia we have seen a reduction in the school maintenance budget of about $10 million. Is the minister simply unaware of this cost shifting by the state administration to the federal sphere or is she actually supportive of the effective propping up of the state governments?

It is not delivering value for money for the taxpayer. You would think there would be enormous support for the government on this issue. After all, they are giving away money, albeit borrowed money. You would imagine they would receive enormous support. In fact, it is generating a lot of anger. That is because schools were rightfully expecting to get $300,000 worth of improvements for $300,000. They did not expect to only get a $150,000 structure. They were expecting to get $3 million worth of goods for $3 million, not $1½ million worth. That is not an unreasonable expectation.

It is a tragedy, because government largesse of this type will probably never happen again—for many reasons, but chiefly because we will be paying off this lot and the accumulated interest for as many years to come as we can see. In this environment governments will find it extremely difficult to maintain their contributions to schools, let alone shower them with gifts. Given that this big spend in schools may be ill targeted, given the school halls, nice as they are, may not improve educational outcomes and given all the money is borrowed and will have to be paid back by kids currently at school, we now find that instead of getting $14 billion worth of school buildings we may get as little as $7 billion worth. It is a disgrace.

The government has taken great delight in saying that the opposition voted against this package but now we welcome the funding in our communities on an individual basis. The schools funding was presented as just one part of the $42 million stimulus package. Individual parts were not presented for approval; it was a big bundle. It was the biggest ever and we were told to take it or leave it. We chose to leave it, and it is a decision I am proud of. It was a brave decision. We knew the government would portray us as being against spending in schools but we also knew it was an irresponsible and poorly designed package. Nothing has changed my mind. The $14 billion cash splash is stupid policy. It is a poorly targeted stimulus: much of it has been saved; some has been sent to dead people; some sent to people living overseas; and a great proportion was spent on imports, thus sending it out of the country at the first opportunity.

We could have converted large slabs of our electricity generation to low-emission generation, built a string of major desalination plants around Australia to fix our water crisis or built ourselves a major road or port facility to generate new growth for when we come out of the recession. Instead, we gave away cash, and we have the debt to prove it. The $14 billion for schools is too much too fast in too narrow a sector of the economy and was always going to cause distortions. That is exactly what is happening today. In 10 years time we will look around and say: ‘Why did we put that thing there? Why did we build it like that? Is that all we got for the money?’

The government asserts that we welcome the funding locally—you bet we do. It is my job to make sure that my electorate gets its fair share of the action because it certainly will get its fair share of the debt. If I were to stand up and say, ‘Don’t give us the money; we can’t afford it,’ would that help? No, of course not. The money would be spent elsewhere and we would still get our share of the bill. Of course I welcome our share. I will actively campaign for it. That is my job. I urge the minister to get on top of this program and implement some value-for-money clauses that will stop the blatant ripping off of the people of Australia and ensure that the money spent will improve educational prospects, not just the electoral prospects of the government.