The Legal and Constitutional Affairs References Committee has argued privatisation is “not a panacea” and has called for the Average Staffing Level cap to be abolished at once.
The committee this week released its report on visa privatisation, robodebt, and the staff cap on the Australian Public Service, known as the Average Staffing Level (ASL).
While the committee acknowledged that public expectations are higher than ever before, and the private sector can at times help governments innovate, “outsourcing government services is an activity fraught with risk”.
“Privatisation is not a panacea, and outsourcing government services can cause more problems than it solves,” it reported.
“Projects inevitably cost more than originally planned, procurements fail after millions have been invested, service quality frequently suffers and rarely improves, and the profit-drive of private companies often leads to outcomes for citizens that exacerbate inequality, such as the imposition of higher or differential fees for service.”
Outsourcing also affects staff, as those working for private entities are often casual, on contracts, paid lower, and have worse conditions than permanent employees, the report said.
“In addition, privatisation leads to a loss of capability in the public service, sometimes throwing away decades of knowledge and expertise,” it noted.
The committee argued the “pendulum has swung too far towards privatisation”, and the government should re-prioritise strengthening capacity and encouraging innovation in the APS.
It noted the ASL cap has led agencies to use more contract labour, which costs the tax-payer more in the long run.
The staff cap “is an inflexible and arbitrary imposition, and should be lifted”, effective immediately, the committee argued.
As part of the inquiry, the committee was also tasked with investigating the limitations and impact of robodebt collection method. It chose not to report on the scheme, as it is currently being investigated by the Senate Standing Committees on Community Affairs. However, the committee said it “appreciates” that the use of income averaging — the most controversial aspect of the debt recovery process — has ceased.
In its report, the Labor-Greens majority committee recommended the government:
- Assess current and future proposals for outsourcing services against a public interest test,
- Provide a commitment that services dealing with complex cases and vulnerable people should not generally be considered suitable for outsourcing,
- Implement arrangements to make outsourcing contracts publicly available, unless there are published national security concerns,
- Lift the Commonwealth public service ASL cap immediately,
- Ensure any further projects that involve automated decision-making are not pursued if automation reduces service quality, impacts upon fairness, or reduces equity of access.
- Does not proceed with the Request for Tender Delivering Visa Services for Australia – Global Digital Platform, and seeks instead to fund and deliver an in-house solution.
It also suggested departments and agencies “have regard to the Commonwealth Ombudsman’s guidance on best-practice in automation” at the beginning of any relevant project.
The coalition senators on the committee, Amanda Stoker and Claire Chandler, opposed the majority of the recommendations, including scrapping the staff cap.
The inquiry into the impact of changes to service delivery models on administration of government programs was announced in August.
In its submission to the inquiry, Services Australia argued that outsourcing employees had been a “cost-effective” way to deliver services, noting it had to work within the limitations of the ASL cap.
“Additional resources are sometimes required to deliver on government priorities or to progress initiatives to transform and modernise our technology and capability. Employing non-APS staff provides timely access to the people needed for specific and often time-limited priorities … where we are already operating at our ASL limit, it is important to be able to access non-APS resources to make sure we have the capacity to deliver on all of the government’s priorities,” it said.