Appropriation Bill (No. 3) 2024-2025 - Second Reading
Tuesday 11 February 2025
Mr FLETCHER (Bradfield—Manager of Opposition Business) (18:56): I'm pleased to have the opportunity to speak on Appropriation Bill (No. 3) 2024-2025. I want to deal with what is, in my view, a very interesting case study of the issues raised by Labor's wrongheaded decision to employ 36,000 more public servants at a cost of an extra $24 billion. Since we've been talking about this, the usual union bosses and other bloviating bloodsuckers and parasites on the long-suffering Australian taxpayer have been out there complaining that if you cut public servants then service levels will fall.
Services Australia is designated to receive 7½ thousand of these new public servants over the next three financial years under Labor's most recent budget announcement. Services Australia is huge. It now has around 34,000 people and it has the largest call-centre operations of any organisation in Australia. But its service outcomes have collapsed over the last two years, and what has happened under the disastrous leadership of Bill Shorten is a very informative case study. The number of public servants has gone up, while the customer service performance has gone down. Let's have a look at some of the data.
One of the core jobs of Services Australia is to process claims made by Australians to receive a government benefit. If you made a claim for the age pension in financial year 2021-22 under the coalition, on average it took 35 days. In financial year 2023-24 under Labor, it was 76 days. If you applied for dad and partner pay in 2021-22, it took 14 days; under Labor, in 2023-24, 63 days. For the disability support pension, in financial year 2021-22, it took 40 days for Centrelink to process your claim; on average in 2023-24, under Bill Shorten's tender care, it took 93 days.
How long does it take you if you are so unwise as to call Centrelink seeking assistance? Well, if you called the families and parenting line, under us, in 2021-22, on average you waited 24 minutes and 45 seconds. That's not a great performance, but that's what it was in 2021-22. In 2023-24 under Bill Shorten, it was 50 minutes and four seconds—more than double the wait time. If you called the older Australians line, under us, in 2021-22, you waited 21½ minutes; in 2023-24, it was 44 minutes 31 seconds—more than double. So productivity under Bill Shorten collapsed. Services Australia has more staff doing less work, processing fewer overall claims. Service delivery outcomes have become worse.
Mr Shorten was asked about these issues in a media interview and he had this to say:
But the other thing to mention is demand is up. Demand is up on previous years. So not only do we have that, it's like the two jaws of the snake, we've got a decreasing number of people and we've also got more people than ever asking.
This is flat out wrong. Let me go through the data. Compared to the years in which the coalition was in government, customer demand faced by Centrelink is trending down. In the 2021-22 financial year, customer demand was 106.9 million; in 2023-24, it was 99.3 million. So demand is down. Mr Shorten said demand is up; demand, in fact, is down.
Compared to the coalition years, fewer claims are being processed by Services Australia under Labor. In 2021-22, under the coalition, 517.6 million claims were processed. In 2023-24 that number was 468.5 million. So it has gone down. Under the coalition it was 517.6 million; under Labor it was 468.5 million—fewer claims being processed under the Labor government. Yet what has happened to the number of Services Australia staff? That has gone up. On 30 June 2022, just after we left government, the total Services Australia APS headcount was 32,310. On 30 June 2024 it was 33,554—up, not down. The number of staff has gone up under Labor; the total amount of processing work has gone down. In 2021-22, under the coalition, 7.99 million hours were spent on processing. Under Labor, in 2023-24, this fell to 6.54 million hours.
So what is the actual picture? What does the data say, compared to Mr Shorten's explanations in the media? The data says the number of staff is up, the amount of customer demand is down, the amount of processing hours is down and productivity is significantly down. And what does the customer, the citizen, the end user, see when they interact with Services Australia, as millions of Australians do? They see that the average time taken to process an age pension, as I've explained, was 35 days in 2021-22 under the coalition. In financial year 2023-24 it was 76 days—more than double. There are more staff dealing with fewer claims, with wait times in many cases more than doubling. That is a textbook example of a collapse in productivity.
What it tells us is that there is no simple, straightforward, linear relationship between the number of staff and the performance. What it tells us is that, when all of those bloviating, bloodsucking parasites on the Australian taxpayer—all of those union secretaries—get out there and whinge about the disastrous idea that we should in some way wind back on Labor's profligate use of additional public servants, their essential premise that there is a relationship, and that more public servants means better service, is directly contradicted by the data. It is directly the opposite of what we have seen in the last nearly three years in which Services Australia has been under the care and management of Bill Shorten. Bill Shorten has now left the building, but the damage that he has done is going to last for a long time.
Let's have a look at some of the factors behind this disastrous collapse in productivity that we have seen at Services Australia, which means more public servants and more money being spent by the poor, long-suffering taxpayer, yet worse service being delivered to Australians. The first thing Mr Shorten did was, where he could, dump external specialist providers and replace them with generalist public servants. Why? Because, of course, as a former union boss, and because Labor is the political arm of the union movement, he wanted more public servants who are union members. That was his overall priority. Customer service was a long way down the list of Bill Shorten's priorities. One of the things that's happened, therefore, is that 3,000 previously outsourced roles at Services Australia are now being done by permanent public servants. In December 2022 there was a decision taken to get rid of more than a thousand specialist ICT—information and communications technology—contractors from Services Australia. This has gutted the agency's capacity to continue to develop its information technology systems.
Another example was in June 2023. Services Australia axed a $343 million contract with a specialist external call centre provider, Serco, and got rid of their 600 jobs. This happened even though Serco's call centre operations were much more productive than Services Australia's in-house operations. Don't ask me; ask KPMG, who did an assessment and found that Serco staff took, on average, 34 per cent more calls than the full-time public servants employed by Services Australia.
The second thing that Mr Shorten did, which has disastrously reduced the output, the capability and the productivity of Services Australia, is weaken the digital capability of Services Australia. According to the agency's assurance statement there has been a conscious management decision taken to pause automation processes, from late 2022. The stated reason for this decision is a 'revisiting of their risk tolerances'—whatever that particular piece of bloodless bureaucratic jargon means. It's a very odd decision because we know that Services Australia demonstrated under the coalition that it could improve customer service using automation.
After the ATO, the Australian Taxation Office, introduced Single Touch Payroll, Services Australia built on this by providing pre-filled online forms to Australians receiving JobSeeker and other benefits, making it easier for people receiving benefits to meet their requirement to report to the government the amount of income they receive from employment in a given week. It turned out that these pre-filled forms were very well used. Over 3.5 million income support related reports were made in 2022-23 using Single Touch Payroll pre-filled data.
We also know that Services Australia is grinding to a halt on the IT transformation work that was underway under the previous coalition government. Labor inherited six major ICT projects from the coalition, the biggest being the Welfare Payment Infrastructure Transformation Program. Today only two programs are still underway.
The third problem with what former union secretary Bill Shorten did is that he engaged in a ferocious politicisation of the income compliance program carried out under the previous government—a program, I might say, which in the 2016 and 2019 elections, when Labor was led by Bill Shorten, Labor submitted policy costings which assumed the continuance of the income compliance program. But, of course, Mr Shorten then turned around and engaged in a ferocious political attack. A clear consequence of what he did, including dragging a whole range of public servants before a royal commission, is going to be to make the Public Service more risk averse and less likely to think creatively and ambitiously about how best to serve the government of the day and in turn the Australian people.
Consider the rollout of voiceprint, digital assistants, digital identity and video chat appointments—all reforms delivered under the coalition. Consider in New South Wales the scrapping of the old motor registries, replaced by the new Service NSW model, which had been very successful and which was led by Victor Dominello, the former New South Wales minister, who did an amazing job. These new ways of service delivery at the Commonwealth and at the state level required innovative thinking from the public service.
It is clear from the royal commission's report that the central idea for the income compliance program was developed by officials within the Department of Human Services. They were generating ideas, which is, after all, what we want public servants to be doing. Now, let's be clear. There were mistakes made with that program. It was initiated based on the clear advice of the Public Service that the program was lawful. Once that advice changed, those mistakes were acknowledged on our government's watch, and we fixed it on our watch. But to take away from this, as Mr Shorten did, the idea that algorithms should not be used, that technology is bad, that innovation should not be encouraged, is a very bad thing, and it contributed to the collapse in service levels under Bill Shorten, under Labor, at Services Australia. People in this place such as me use jargon terms like 'productivity is falling', which doesn't mean much to ordinary Australians. But I'll tell you what does mean a lot to ordinary Australians—when you apply for a benefit that you're entitled to, like the age pension, and you are waiting twice as many days to get that application processed because of the collapse in productivity and performance at Services Australia. When you call the older Australians line to ask, 'What's happening to my age pension application?' rather than waiting an average of 20 minutes and 30 seconds, as you did under the coalition, you now wait more than twice as long: 44 minutes and 31 seconds. That is what a collapse in productivity means to ordinary Australians.
I say to the House: we have seen a collapse in productivity and a collapse in performance at Services Australia under Bill Shorten. More public servants have been employed, but waiting times have blown out and the performance of Services Australia has collapsed. Australians have been grossly let down as a result, but it also gives the lie to this claim, made by union officials and other supporters of this government's agenda, that, somehow, more public servants means better services to Australians. The data shows exactly the opposite.
