DERRYN HINCH: There used to be a cruel but telling joke about the public service: Why aren't public servants allowed to look out the window in the morning? The answer: Because then they'd have nothing to do in the afternoon. Now, I thought of that barbed joke when I read today that the Rudd Government, in its first two years in office, has farmed out contracts worth nearly $1 billion to consultants for policy advice, research, and audits; a total of $940 million, to be exact. For consultants. What about the army of full time public servants and advisers who fill up Canberra and offices around the country at a cost of billions of dollars to the taxpayer? Are they saying that the people on the federal payroll aren't good enough, not expert enough, not qualified enough? And if not, why not? And the State Government is not much better. Somebody worked out the cost of these federal consultants who can charge up to $500 per hour, would pay the wages bill for the 1000 employees in the Treasury Department for 12 years. And to make it worse, when Kevin Rudd was in Opposition and campaigning for the top job, Labor promised to cut $3 billion in what it called wasteful spending, including nearly $400 million in consultancy fees. Instead, it's spending nearly a billion dollars on consultants itself. And it gets worse. According to official Government records, the Rudd Government has entered into nearly 8000 contracts with consultants since it took office less than two years ago. The Defence Department has signed up for more than $100 million in consultants since November 2007. The Defence Materiel Organisation splurged another $60 million; Health $80 million; Environment $65 million; Finance $50 million; and the list goes on and on and on. And while the world was gripped by the global financial crisis last year, the Government kept the consultancy business afloat because actual spending on consultants in the last financial year increased by 5.6 per cent. And what all that tells the voters is that despite the rhetoric and the promises and the boast that we are the best, we are more competent than the Opposition, they can't do it without help, especially from expensive multinational advisers. They might as well relax the rule about public servants from looking out the window the morning. On the line, the Minister for Finance, Lindsay Tanner. Good afternoon.
LINDSAY TANNER: Good afternoon, Derryn.
DERRYN HINCH: Now, you're the obvious man to talk to about this because I'm sure you've been made aware of it. The Australian newspaper, March 2007, quotes Lindsay Tanner outlining how Labor will save $3 billion from the Federal Budget, including hundreds of millions of dollars wasted - your words - on government advertising, opinion polling, and consultants.
LINDSAY TANNER: That's correct, and broadly we've done that.
DERRYN HINCH: How do you equate that with a bill for $940 million worth of consultants, research and audits since winning office two years ago?
LINDSAY TANNER: Well, the amount that's quoted in the newspapers today is actually over two years...
DERRYN HINCH: Yep.
LINDSAY TANNER: ...and both of the figures for those two financial years were significantly lower, quite substantially lower than the amount for the last full year of John Howard's term in office. And these things go up and down a bit because of one-off things that sometimes nobody can control. So, for example, we have a Defence white paper, and there was a huge project on savings for the Defence Force for the next 10 or 15 years. That's a big one-off hit. But we've actually got savings, compared with John Howard's final number, of about $130 million over those two years. So had John Howard's figure been for those two years it wouldn't have been $900 million, it would have been about $1.1 billion.
DERRYN HINCH: All right, my obvious question is, why do you need so many and so much? What do the public servants do?
LINDSAY TANNER: Look, it - Derryn, that's a legitimate question, and there have been occasions in the past, I think, with governments of both persuasions where you'd perhaps question whether it was appropriate to have a consultancy. But there are specialist things that you literally can't employ public servants to do because you only need them done every now and then. So, for example, we're working on a big reform program for government purchasing to save money, and we had to get specialist consultants to give us a serious analysis of how we go about buying travel services, how we go about buying aviation services, hotel accommodation, et cetera, et cetera. We spend about $500 million a year on this stuff. We want to reduce that bill. Now, obviously, we don't have the expertise in-house to do that kind of work. It's very, very complex and specialised. So we had to get Deloittes as outside consultants to do that. They do it for the private sector all the time, that kind of thing. So there are lots of reasons why you need to do it.
DERRYN HINCH: Yeah, I know they do it for the private sector but the private sector pays for it. Taxpayers pay for this and you've got thousands of people who work for the Government - and the State Government is no different and no better. I'm always intrigued as to what - as I say it again, what do actual public servants do? You've got a whole army of them and you'd think that - do they not have the expertise, are they not good enough? And if they're not qualified enough, why should they be even employed?
LINDSAY TANNER: Well, in many cases, that's correct, Derryn, that they don't. And if you think about where are these people working, they're working in Centrelink, they're working for Medicare, they're working in the tax office. They're doing, in the vast majority of cases, things that are done day in, day out. The problem of course that you encounter is that often you have situations where you've got a specific thing that has to be done that you might only need to do once every 10 years, and you clearly don't want people on the payroll who are sitting doing nothing for most of the time, hoping that every now and then you'll actually need them to do something. This is the balancing act that you've got to fulfil. That's the problem, is that consultancies are there for unusual occasional things where you need specialist expertise that you can't keep in-house all the time because you don't need it all the time.
DERRYN HINCH: Okay, what did we - with all the consultants and all the organisers, what did you achieve from the 2020 summit?
LINDSAY TANNER: Oh look, the 2020 summit was very important, and there's been a whole range of themes and issues and ideas that have come out of that, that have been part of the process of government, things that - in my own area there's been issues like reform of regulation, for example; some things that didn't get the headlines that were quite useful discussions that we have been pursuing in government. So these kind of discussions of ideas, trying to put a rocket up people, get things moving, they are valuable. Obviously there are different opinions on them but...
DERRYN HINCH: Yeah, the biggest rocket was do something about the republic and now on the tenth anniversary it's been shelved.
LINDSAY TANNER: Oh look, it hasn't been shelved but I think there's a general view in the government that we should proceed slowly. This is something I've got - you know, I'm a strong republican, Derryn; I believe in a directly elected presidency but...
DERRYN HINCH: So do I.
LINDSAY TANNER: But one thing I think is important, I think most Australians recognise is respecting the umpire's decision. I didn't like it that we got done in 1999 but I think you've got to actually say, well, okay we got done, we shouldn't be hurried to go back to people. You might have noticed in Europe that in recent times they've been having referendums on - in various countries about things where they vote no and then they go back to them six months later and say, well, you got it wrong, try again. Well, I think that's insulting and I think we - you know, we've got to respect the original decision for a period of time.
DERRYN HINCH: Okay. Final question, and because you're the Minister for Finance, how much is the Oceanic Viking going to cost us? Four weeks - three weeks it's been there, it's not doing its job in the - down in the waters where it's meant to be operating, stopping the fishermen. How much will it cost all up?
LINDSAY TANNER: Look, I don't know the answer to that question...
DERRYN HINCH: Can you get it for me?
LINDSAY TANNER: ...as yet, as yet. Look, we will be able to work that out eventually. But the thing is of course that a fair proportion of the costs are costs that we would be accruing anyway. There would be some additional costs but of course the staff, for example, they're still going to be paid...
DERRYN HINCH: True.
LINDSAY TANNER: ...you know. So the real difficulty in working out a figure is separating out the - what you might call the additional costs from things you would have to pay anyway. So, yes, I would expect there will be some significant additional costs but in the overall scheme of things that's the nature of this business. If you've got boats patrolling and aircraft patrolling, then every now and then things happen that take them out of their normal way and, yes, some additional costs might emerge.
DERRYN HINCH: Yeah. All right, Mr Tanner, thanks for your time, I appreciate it.
LINDSAY TANNER: Thanks very much, Derryn.
DERRYN HINCH: Thank you. Bye-bye. The Minister for Finance, Lindsay Tanner.
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