As Chair of the Public Accountability and Works Committee, Abigail took note of the Labor government's lukewarm response to the recommendations out of the recent consultants inquiry.
Ms ABIGAIL BOYD (18:27): I take note of the Government response to report No. 3 of the Public Accountability and Works Committee entitledNSW Government's use and management of consulting services. On 1 September, the Minister for Domestic Manufacturing and Government Procurement announced that the Government would be introducing legislation to ban suppliers who engage in serious misconduct or abuse of trust from doing business with the New South Wales Government. In the media release announcing this policy, the Minister stated:
It means dodgy companies won't get an unfair advantage over companies that act in good faith and meet the ethical standards and behaviours the NSW Government expects from its suppliers.
Examples of misconduct were listed as including engaging in fraudulent or corrupt conduct or failing to comply with taxation laws. Perhaps members can rack their brains to try to come up with recent examples of misconduct and unethical behaviour by companies taking millions in New South Wales Government money. Perhaps members are minded to pull out their well‑thumbed copy of the committee's report into the Government's use and management of consulting services and conclude that the Minister's announcement means that the Government has decided to adopt the committee's superb recommendations in full. Sadly not. Just a few days before that media release, the Government delivered its response to the committee's report on the use of consultants and made it very clear that it would not be applying the same enthusiasm to cracking down on this protected class of corporate Australia as it will be on other suppliers of goods and services to the New South Wales Government.
Of the 28 excellent recommendations made by the committee following a lengthy and detailed inquiry, the Government is supporting three of the most straightforward recommendations, giving some lukewarm in‑principle support for 16 recommendations, partially supporting one recommendation and merely noting five recommendations. This is a disappointing response from the New South Wales Government. In particular, I note the Government does not support the following recommendations. One, the Government refuses to name and shame consultants who fail to do the right thing. Recommendation 24 would have seen public disclosure of any instance of a material breach by a consultant that would undermine public confidence or integrity in the New South Wales procurement framework, with any action taken to address the breach also being disclosed.
Two, the Government refuses to exclude consultants and those with a financial interest in a consulting firm from sitting on public sector boards. This is despite the committee's finding of the potential for conflicts of interest, not to mention the undesirable embedding of cultural norms around the overuse of consultants that having such people on public sector boards creates. Three, the Government has even refused to require disclosure of post‑engagement evaluations that find work completed by consultants was not to the appropriate standard. One of the recurrent themes in the committee's inquiry was around the lack of consequences for consultants doing the wrong thing. Post‑evaluation reports were rarely performed, public officials were taking everything the consultants were doing on faith and, even where conflicts of interest were kept from the Government, there were no real consequences for this bad behaviour.
When the PwC Australia tax scandal broke, we saw a rare moment of some consequences being applied, but the New South Wales Government's response was incredibly weak: a mere suspension for a few months from a very specific line of work that would have had no significant negative impact on PwC. Other recommendations not supported by the Government, with gusto, include those which would provide greater accountability and transparency over tenders and contracts—including reasons for there being a limited or no tender, and reasons for contract extensions and amendments—and those which would have brought conflicts of interest out into the spotlight, rather than being left to be determined by those with the most incentive to hide them. There was also no commitment from the Government in relation to recommendations designed to bolster the public sector.
It is hard not to wonder at the disconnect between the Government response to the committee's report and the Minister's media release a few days later claiming that the Government's new legislation will come down tough on suppliers doing the wrong thing. However, I take comfort in the fact that one of the recommendations supported by the Government in its response is to consider establishing a New South Wales Government consulting service, similar to what has been established federally. The easiest way to make consultants behave more ethically in relation to the services they provide to government may be to cut them out of providing services to government altogether, or at least to a markedly reduced degree. Until then, we must keep digging to work out what they are up to and how badly they are taking advantage of the New South Wales Government's lack of safeguards. In that respect, I look forward to the next inquiry into the Government's use of consultants, in the next term of Parliament.