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Wednesday, 1 November 2000
Page: 21855

Mr TANNER (2:44 PM) —My question is to the Minister for Finance and Administration, and I refer to Employment National's loss of $92 million. Minister, did you direct the Employment National board, on 3 December last year, to accept its job matching contracts under Job Network 2? Didn't the board refuse to do so on 14 December, on the basis that the contracts were `not commercially viable'? Didn't you sack the board the very same day and install a new board which, on your instructions, accepted the unviable job matching contracts? Doesn't Employment National's loss of $92 million show that the old board was right, that you were wrong, and that your decision on 14 December last year has cost taxpayers tens of millions of dollars?

Mr FAHEY (Minister for Finance and Administration) —I welcome the honourable member's question, and I refer specifically to his last statement about a loss of tens of millions of dollars. I am sure the House would be fully aware that the master of disaster, when it comes to economic management, is the Leader of the Opposition. When it comes to losing taxpayers' dollars, I simply refer to a couple of points. Firstly, the debt servicing in respect of $70 billion of general government debt increase in the last five deficit budgets under Labor—

Mr Tanner —Mr Speaker, I raise a point of order on relevance. The question was asked about Employment National—

Mr SPEAKER —It is a fair observation that the minister's last comment did not bear an immediate relationship to the question, but I noted that he obviously was returning to the question. That is why I did not intervene.

Mr FAHEY —I am more than pleased to return to the question. As I was indicating, when it comes to losses of taxpayers' dollars—which was part of the question—quite clearly the Leader of the Opposition has a record in submarines, in managing employment programs, and in running up deficits, year after year, that no-one will equal in my lifetime or in the lifetimes of my children. In respect of Employment National—

Opposition members interjecting—

Mr FAHEY —You clearly do not want to know about Employment National, with all those interjections. The government gave careful consideration to the position of Employment National after the Job Network 2 contract decisions were announced in the latter part of last year. We gave careful consideration to the future of Employment National. In the lead-up to the allocation of those contracts, I had significant consultations of various nature with the board of Employment National. In respect of the bids which they put in for the Job Network 2 contracts, I asked if they had given this careful consideration and they indicated to me that they had. They assured me that they had put in competitive tenders in respect of those contracts and that they had made provision for a minor loss of those contracts.

We know that when the contracts were awarded—in a competitive manner and subject to absolute probity—very few of the intensive assistance contracts were awarded to Employment National. Consequently, the revenue and the workload that flowed from the allocation of Job Network 2 contracts to Employment National changed significantly. After careful consideration, the government took the view that there was a role for Employment National in the area of job matching, where it had performed admirably and where it had been awarded a significant increase in the contracts in Job Network 2 compared to Job Network 1.

When it came to continuing in the current structure, there were discussions with the board about what they saw as the way forward, and certain advices were given—entirely appropriate advices from a board in that position in the context of their duties under the Corporations Law. The government took the decision that it wanted to proceed with a public employment agency, with Employment National. In taking that decision, the government made it abundantly clear that it was prepared to back the company in the way forward. In the circumstances of all that, a direction was given to proceed with the contracts in job matching. It is still performing those contracts, and the appropriate backup was given. But there was a new phase; it was a restructuring of the company, and the skills for restructuring were necessary. The view, after careful consideration, was that there ought to be a structure in the board that would carry it through that phase. It is as simple as that.