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Monday, 20 August 2012
Page: 9134


Mrs BRONWYN BISHOP (Mackellar) (16:35): The Public Service Amendment Bill 2012 is a bill which is largely technical in nature but, in the words of the minister responsible, it seeks to simplify the values of the public service from 15 down to five. They will be the terms: service, ethical, respectful, accountable and impartial. As he said, they are more succinct, memorable, easy to understand and will help the service to create an ethical high-performance culture. The one provision in this bill which I do not believe can in any way meet that high aim is the proposed amendment which would allow the Prime Minister of the day, on behalf of the Commonwealth, on terms and conditions as determined by the Prime Minister, to appoint a secretary of a department, who has resigned or whose period of office has come to an end, to any appointment that the Prime Minister may wish—and that could be an indefinite appointment.

We in the coalition have proposed to amend the bill to delete those provisions. I flag that I will be moving those amendments in consideration in detail. I note that the government will be moving amendments in consideration in detail dealing with the original concept of a 'temporary employee' and with another provision, which the minister will no doubt himself explain. In discussions about the bill between me and the minister and his department, we have concluded that the government will accept my amendments and the opposition will agree to the government's amendments.

Before I go on to explain precisely some of the provisions of the bill that we are accepting, it is important to outline why we feel so strongly about amending the bill so that the only people who will be able to be appointed by the Prime Minister as secretaries will remain as they are in the current act, the Public Service Act 1999, which provides that, if a government department is abolished, the secretary can be appointed elsewhere and that, should a secretary have his or her term terminated by the Prime Minister, after appropriate investigation and reporting that person can be appointed elsewhere.

We are concerned on two counts about the proposed extension of the ability to appoint secretaries. One of those is that we have the precedent in New South Wales of the so-called swingers list—a whole bunch of public servants, including secretaries, who no longer have a job and simply remain on the payroll. I think it reached something like 340 at one stage, and it is only now that Premier O'Farrell is in power that he is moving to reduce the list of people who are being paid for doing nothing. This provision would have allowed such a list to develop federally. Although people will say that that is nobody's intent, it is still something that we believe is highly undesirable, and accordingly we will be moving amendments to remove that provision.

The second concern we have relates to the minister's words that I mentioned earlier:

The proposed values—that the APS is committed to service, is ethical, respectful, accountable and impartial—are more succinct and memorable, easy to understand, and will help the service to create an ethical, high-performance culture.

It is always essential that the public service can be relied upon for fair and impartial advice that ministers can act upon. Having been a minister in the previous government, I can tell you it is very valuable to have. Introducing this provision would mean that a particular secretary, by being obsequious to a Prime Minister of the day, could seek to resign and be appointed to a position indefinitely which would be to their personal benefit. This is also against the intent of the act as a whole. The difficulty has shown itself. We have had one example of it. Because there is no provision in the Public Service Act to appoint a secretary who has resigned or whose term has come to an end, the mechanism that has been used on this occasion has been section 67 of the Constitution. The Constitution allows for the appointment by the Governor-General of persons to positions as advisers, and this has been utilised by the Prime Minister in the case of the former head of the Treasury. What has happened in that circumstance has made it very public. The terms and conditions upon which Mr Henry has been appointed are as follows:

ii. the Secretary of the Department of the Prime Minister and Cabinet be the approving authority for the Special Adviser to the Prime Minister for leave, including long service leave;

iii. for any period that the Special Adviser performs the duties of that office on a full-time basis (40 hours per week), the remuneration and other terms and conditions of employment for the Special Adviser be the same as those that apply to the person who holds the position of Secretary of the Department of the Treasury at the relevant time;

iv. the Prime Minister may agree that the duties of the Special Adviser are to be performed on a part-time basis; and

v. for any period that the Special Adviser performs the duties on a part-time basis, the remuneration referred to in clause (c)(iii) above be payable, and other entitlements accrue, on a pro-rata basis.

The problem is that this appointment as a special adviser was made under the hand of Her Excellency on 21 April 2011 but it was some five months later before it was eventually decided that there was work for him to do, on the Asian white paper. In the meantime, as of 15 March 2012, the head of Treasury would had an income of $615,000 a year, rising to $653,000 on 1 July 2012 and to $805,000 on 1 July 2014.

On 14 February, the Department of the Prime Minister and Cabinet told Senate estimates that Dr Henry was working 2½ days a week. I have received a letter from the Secretary to the Department of the Prime Minister and Cabinet, from Mr Dreyfus, dated 14 August 2012, in answer to questions that I asked in consideration of detail of the appropriations bill.

It says that, as at 27 July 2012, Dr Henry had worked 69 days in total since 5 January at an average of 2½ days a week and that no decisions have yet been taken regarding any future projects in Mr Henry's capacity as Special Adviser to the Prime Minister. That means that, as at 1 July 2012, his remuneration will be $326,500; as at 1 January 2013, $345,500; and, if the appointment continues—and there is no end to this appointment—by 1 July he will be receiving, presuming he remains on 2½ days a week, $402,500.

In addition to that, Mr Henry is permitted to take on other work in the private sector, and he has taken on a position as a director of the National Australia Bank. That would seem to many of us to be a position of conflict of interest but it has been disclosed, as his appointment requires, and he continues in that role as well. We believe that the provision put into the act could have facilitated many more appointments like this. Many of them would have gone largely unknown, because section 67 would not have had to be used.

There are some good things in the legislation which are worthy of response and support. The commissioner will be now known as the Australian Public Service Commissioner, and greater powers do come to him. He is given the power to delegate authority to people who will be able to carry out investigations for him where the workload, were it to be done properly, would simply be too large. Code of conduct amendments will apply in connection with an employee's employment. Section 13(11) of the act is amended to require employees to behave in a way that upholds the integrity and the good reputation of their agency, as well as the APS—which is the current requirement—and to comply with the proposed employment principles as well as the APS values.

A section includes provisions to require agency heads to establish procedures for an Australian Public Service employee to make a whistleblower report and for agency heads to deal with such reports, and provides a regulation making power to prescribe basic procedural requirements that must be complied with by the Public Service Commissioner or a delegate in dealing with whistleblower reports. This amendment will provide that regulations may prescribe circumstances in which agency heads, or the commissioner, may decline to conduct, or may decide to discontinue, an inquiry.

Another part deals with temporary employment. In the original legislation there were only to be two categories of employees—ongoing and temporary. The government has found, on advice, that this was a difficult provision to sustain and it is proposing amendments which will take us back basically to the previous position. Confidentiality of information was also of concern to the government and there are related amendments. It is now provided that persons who are conducting inquiries will also have the cover of being protected.

There is an amendment to the legislative instruments section that provides direction-making powers for the Public Service Commissioner to allow the commissioner the discretion to issue directions on employment matters relating to all Australian Public Service employees, including SES employees, on matters such as engagement, promotion, redeployment, mobility, training schemes and termination. There are some miscellaneous amendments which relate to the Australian Secret Intelligence Service, and they are supported by the opposition. The current provision is a prohibition on reduction rather than active power, and this has caused some confusion. with respect to the delegation of power.

I go back to the original point that I wanted to make, that much of this bill is endeavouring to be aspirational in terms of upholding integrity and not bringing the public service or an agency into disrepute. The current legislation does not allow a prime minister of the day to appoint a former secretary who has resigned, or whose appointment has come to an end, to any position he or she may choose for an indefinite period of time. There are two reasons for this, as I have already said—first, that it could encourage the creation of a list of so-called swingers, or the unattached list as it was known in New South Wales, and, secondly, because it could undermine those high aspirational ideals whereby a secretary of the day could wish to be subservient to a government of the day with the aim of securing employment.

I place on record—particularly because of some debate that has taken place in this chamber recently concerning the determination that the Independents chose to listen to in order that they would support the government and not vote against the appropriation bills and would give an undertaking that they would not vote on a motion of no confidence—that we sought to have our costings done by an independent source because we believed that Treasury had become politicised. That was in order until such time as the hung parliament was evident and the Independents required a briefing from Treasury—from Mr Henry himself—to tell them about the costings of the coalition's policies.

In our costings, we had identified savings of $2.5 billion against the conservative bias allowance, which is the allowance in the budget papers for corrections with regard to new policy—a buffer, you might call it. In that case, the $2.5 billion was disallowed, for want of a better term, by Mr Henry. He said that the allowance was a buffer and therefore could not be the source of any actual budgetary savings. But, in the 2009-10 budget, Mr Henry himself claimed $4.6 billion in savings over the forward estimates from that conservative bias allowance.

We had claimed that $3.3 billion could be saved from across the Health and Hospitals Fund, the Education Investment Fund and the Building Australia Fund. Mr Henry disallowed that. He said that, to claim the savings, we would have had to have identified, prior to the election, which programs were to be cut. He then said there was a secret list of programs—we had asked for that list and he said that it was secret and that he would not release it prior to the election, despite having been asked for it.

Then we came to the NBN, where we claimed $2.4 billion of savings. We said there would be a saving on borrowings because we would not be borrowing the same amount and that there would therefore be savings in interest. We calculated that saving using an interest rate of 5.5 per cent. Mr Henry said no, that he had decided that the going rate for the future would be 4.9 per cent and that he would therefore disallow our claimed amount as a saving. The only problem is that, at the time—in September, when I checked and first talked about these things—the rate was in fact 5.23 per cent.

Next we came to the question of returning people to work and the resultant saving on welfare payments. We said we would save $600 million, but Mr Henry said no to that on the basis that it was a second-round figure. But Mr Henry himself had used a second-round saving of $600 million for the government's purposes with regard to the mining tax.

Then we came to the question of the Pharmaceutical Benefits Scheme, the PBS, where possible savings of up to 40 per cent had been identified by the government prior to the election. But the government had chosen to use savings of only 23 per cent. So we said there was an additional 17 per cent, valued at $1.15 billion. But Mr Henry said no, our savings could not be allowed, and that therefore there was a further hole in our budget. It is interesting to note that, since Mr Henry disallowed that saving, the government itself has actually booked the $1.15 billion for its own savings.

Those amounts added up to $9.95 billion—and the figure for what Mr Henry said was a black hole in our accounts was $11 billion. Mr Windsor could not wait to get on television and say that, because there was a big hole in our budget and we could not do our accounting properly, he would have to vote for the government. From all of this, I think one can see that the impartiality of the Treasury and of other agencies and departments is essential if we are to have trust in the sorts of figures being produced. The bottom line is that, if we did not move our amendments, we might again see instances of people seeking to serve the interests of the government of the day rather than the public interest. We do not think that would represent good policy, particularly when the whole of the bill is designed to be aspirational in nature.

I am pleased to say that, when we come to the consideration in detail, at which time we will be moving our amendments and the government will be moving their amendments, we have agreed that each of us will accept the other's amendments to allow the bill to go forward and keep its aspirational nature intact. We trust that will help to make reality those memorable words the minister used:

The proposed values—that the APS is committed to service, is ethical, respectful, accountable and impartial—are more succinct and memorable, easy to understand, and will help the service to create an ethical, high-performance culture.