Public Hearing: Senate Inquiry into Department of Social Services human services tendering - 21 April 2015

Community Affairs Reference Committee Public Hearing

Senate Inquiry into the impact on service quality, efficiency and sustainability of recent Commonwealth community service tendering processes by the Department of Social Services

21 April 2015

[15:25] CHAIR: Welcome and thank you for coming. We have your submissions thank you very much and you have all had information on parliamentary privilege and the protection of witnesses in evidence. I invite whoever wants to to make an opening statement—I know some of you have been sitting there for quite a while—and then we will ask you some questions.

Mr Crosbie: I think we all appreciate the opportunity to present evidence and the fact that senators are giving up so much of their time and energy for what we see is a very important inquiry. I know from Senate estimates and from elsewhere that this process is being followed closely by many of the senators who are participating. I want to say from the perspective of the Community Council for Australia that this is not about cuts—that is, not saying that we support the cuts or that we do not support the cuts. We accept that governments have a responsibility to make decisions and that they need to be held to account for those decisions but for us, because we have such a broad group of members, we are really focusing on the process. In terms of the process, when we circulated our submission among our members to get feedback and to finalise the submission, the feedback we got was that many people who did not participate in the DSS grant application process this time had experienced very similar experiences in mental health, in legal aid services, in community education, in some of the arts areas and in other areas.

I think it goes to the heart of the issue about the relationship between governments and the charities and not-for-profit sector. This process has highlighted what could only be called an incredibly dismissive and almost arrogant approach to the sector. It is almost inconceivable that you would talk about trying to make reform in an area, trying to improve services, trying to achieve the kinds of objectives set out by DSS in their submission without actually engaging with the people who work in those areas, as though you have all the knowledge and you have the capacity to make all the decisions about how all those organisations will operate, their budgets, their services, their programs. 

None of us in our sector would presume to have that knowledge even within our own fields, let alone across a broad range of fields. It beggars belief for anyone, the idea of 104 DSS people, not only 37 contractors, as I understand, not only sitting there deciding the breadth of programs but also deciding the governance structures, the decision making structures and then checking them off internally to see whether they were happy with themselves and now talking about doing their own gap analysis to see whether they are happy with what gaps they have left. I really think at some point we need to say that it does not work. That structure will not work, it has not worked in the past and it will not work in the future. If you want to sit in an ivory tower and make decisions about who gets funding and what they do it will not work. At a time when we want to strengthen the sector and we want the sector to invest in itself and use its assets better, the one thing that you do not want to do is to undermine our capacity to plan for our future. That is exactly what this program has done. I never thought that I would hark back to the days of the Howard government's grant-giving processes, but I find myself doing that. 

It is unfortunate that Senator Sinodinos is not here, because I do remember under the Howard government that there was a commitment to involve people from the sector in decisions about where government funding went—in areas like alcohol and drugs, mental health and homelessness. Committees and groups were established that had input into where money was spent. I remember John Herron and Arthur Sinodinos, in his role as chief of staff in the Prime Minister's office, taking a very proactive view that departments alone could not make decisions about the allocation of funding and using it productively. I will end on this note: I do not believe that we can keep on re-inventing failure. If DSS sees this process as in any way successful, we have a very significant problem. I think we need to rethink the whole notion that departments are responsible for administering grants, because the damage that is being done is far greater than any gain through the proposed reform...

Senator MOORE: They are very good. Mr Crosbie, thank you for your submission and the summary of recommendations. Have you had a chance to talk with the department about your recommendations?

Mr Crosbie: No, we have not. I think three of our 10 recommendations were actually from the Productivity Commission. One of the biggest learnings from the Productivity Commission—Robert Fitzgerald and the Productivity Commission did a great job—pointed out to me by Robert was the massive gap in perception between the way departments view their relationship with the sector and the way the sector views its relationships with departments. If you look in Appendix E of the Productivity Commission report, they surveyed government officials—not just in DSS but across the whole range of government agencies—about how they rate their relationship with the charities and not-for-profit sector. Over 70 per cent rate it positively.

When they asked the charities and not-for-profit sector, only 25 per cent rated it positively. There is a fundamental misunderstanding about what departments see as good practice and what charities and not-for-profits see as good practice or good communication. We have seen time and time again from every department, including Treasury, an assumption, when they are communicating to the charities and not-for-profit sector, that they are doing a good job and they are communicating well, when in fact there is no testing of that. I would push that further by saying that we have no avenue for the charities and not-for-profit sector to lodge complaints. There is no relationship ombudsman; there is no closed feedback loop; there is no way people can work through issues constructively.

There is no avenue for these kinds of concerns to be worked through with departmental officials—not in the public domain but in saying: 'All these people have all these concerns about this process. You guys are doing this. How can we work to resolve this?' There is no avenue for that to happen. In the past I have addressed in Prime Minister and Cabinet the social secretaries, the heads of the departments that are responsible for all the social services, and each one can talk positively about their relationship with the sector and the things they are doing to build that, but when I talk to the sector it is almost the opposite perception. There is a feeling that they do not have an avenue to talk to departments and there is no way of resolving issues.

See more on the inquiry and transcript here: