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Wednesday, 16 September 2015
Page: 7039

Senator SIEWERT (Western AustraliaAustralian Greens Whip) (17:28): I present the report of the Community Affairs References Committee on Commonwealth community service tendering processes by the Department of Social Services, together with the Hansard record of proceedings and documents presented to the committee.

Ordered that the report be printed.

Senator SIEWERT: I move:

That the Senate take note of the report.

Basically the committee was looking at the tendering process for Department of Social Services grants, commonly called DSS grants. The process was ironically called A New Way of Working for Grants. The department said it was 'a new, broadbanded discretionary grant programme structure which will strengthen our capacity to deliver grant programmes, services and support to individuals and families.' I think it is fair to say from our grants inquiry that that process did not strengthen our capacity to deliver grants, programs and services and the tender process did not pay off as the department thought it would. The benefits that the department and the government thought would eventuate have not come to fruition. In fact, many people think that it built in more inefficiencies and that the administration burden was not eased.

Before I go on, I would like to thank all the participants in the inquiry—the people who made submissions, the witnesses who appeared before us and of course the ever hardworking community affairs secretariat, who, once again, have done an extraordinary job pulling together all the evidence from the many submissions that we received.

This is in fact our second report. We did report earlier in the year on some of the process-related issues and around the Commonwealth grant guidelines and the ANAO process. These recommendations—we make 12 more—build on those recommendations. Many issues were brought up during the committee's inquiry. There was particular concern about the loss of services around Australia, including emergency relief, housing and homelessness services, and of course the impact that the loss of those services has on the service users, who are, when all is said and done, what this process is about. We are also deeply concerned about a diminishing vibrant and diverse community sector and about the need to highlight the point that this sector needs to be supported and maintained.

We also looked at the issues around transparency and accountability and we mention that in the report. One issue that came up there is the fact that we have lost some of our smaller service organisations and bigger organisations have, to a certain extent, taken over those contracts but then have subcontracted back to the organisations which lost the grant in the first place but which were told, 'By the way, you do it without getting administration support.' In other words, it is having a negative impact on that smaller organisation. But that then rolls out to the people who they are in fact working to support and that of course increases their administration burden.

Concerns are articulated in the report around the termination and loss of staff that some of these organisations have experienced and the poor timing in terms of notifications; the lack of indexation and varying indexation rates where organisations are getting indexation; the defunding of advocacy organisations and the changing of timing; and the withdrawal of some funding lines during the process.

The department has recognised that there are significant problems with this process and has organised its own internal review, the NOUS review, which is into the internal processes, not some of the outcomes but which has—get this!—not been publicly released, which is also of concern to the committee. We make recommendations around publishing any gap analysis that the government has already done of gaps in the provision of services. We talk about issues around the tendering process and the fact that it might not meet the needs. Some of the evidence we received was to the effect that the tendering process did not meet the needs of smaller organisations and they were therefore consequently shut out of the process. We recommend in any future tendering process the weighting of the way that smaller community-based organisations work and the value they bring with the unique and specialised services they provide. We also recommend that this issue around subcontracting be looked at.

Very serious concerns were raised about data and what data the government now wants organisations to collect. We make recommendations about indexation, that the NOUS review of the process should be released publicly and that an urgent review be conducted as to where the critical service gaps continue to exist.

The government acknowledged that there were problems with this process because, after they announced the initial tender process, they then released more funding to cover some of those gaps that had been identified. I think it is fair to say that there is no reassurance in the community that all those service gaps have been recognised and plugged.

The committee recommends that, after 18 months of operation, an independent evaluation be undertaken to determine if the outcomes of the tender process have in fact improved services, which is what the government claims that it should be doing.

The committee also recommends that the Auditor-General conducts its own review into the tendering process, including examining the department's pre-tender work and identifying service needs, because that was another issue that came up, and also, importantly, by region. The committee could not identify that the department carried out any analysis of the impact of the tendering process at a regional level. The committee did do that. We talked to three regions to make three case examples, Geraldton, the south coast of New South Wales and Western Sydney, to look at what the overall process, a withdrawal of services and the tender process, was on those regions. The department had not done that and we did in fact identify some adverse impacts in a regional context when you are withdrawing and changing funding for services at so many levels.

We also recommend that the Auditor-General in that review also looks at the subcontracting process, the capacity of community-based services, whether the capacity has been reduced and whether the issues around, for example, Aboriginal communities and CALD communities had been factored into the tender selection process and then looks at the impact of the process on the delivery of services, advocacy and support available to vulnerable people and communities.

This sort of process should never happen again—to throw all these particular grants up in the air in such a short period of time, on top of a significant cut to funding, because overall they were dealing with taking out $270 million through this process. This should never happen again. It is very obvious that it has caused enormous distress to the community sector. There are gaps in services, there are cuts to services, it has not produced a better process and, when all is said and done, it has not produced better outcomes for the most important people who we need to look at in this process, the users of the services: the vulnerable members of our community.