Interview with Tom Connell, NewsDay

26 May 2023

TOM CONNELL: We've had a lot of talk around the future of government contracts. This is in the wake of a scandal around PwC. Essentially using secret government information to give tax advice to clients. Shadow Finance Minister Jane Hume, for more on this. Thanks very much for your time. Interesting, what we heard out of the government this week that essentially would be a black mark next to PwC. This will have to be factored in the future Government contracts they go for, but they won't be there for any period of time. Is that a fair enough approach?

JANE HUME: Well, I don't want to make a running commentary on this, Tom. Obviously, there are processes that are underway, including a referral to the AFP and because of that, there are implications for whatever commentary there is running in the media. But what I will say is, I think that it's entirely appropriate that whenever there is a contract between a provider and the Commonwealth, that there is an expectation that that provider will act ethically, that will act within the terms of that contract, and will act within the terms of the law as well. And that seems to be where the government has moved with its decisions around, not just PwC, but all government contracts.

TOM CONNELL: Right. So what about your view on what should happen from here now from the facts, we do know what a suspension be appropriate until we know exactly what happened?

JANE HUME: Well, the evidence that we heard yesterday in Senate estimates was largely that the incident that occurred with PwC was not a procurement. So a lot of the questions were around procurement. And that's not what the circumstances were with the PwC incident. But the government has made it very clear that it has much higher, higher expectations of anybody that is contracted to government, whether it be through procurement, or whether it be through consultations as it was with PwC. And that there is an expectation that all government contracts and poor government interactions with private providers will be within the terms of those contracts within the terms of their appointments, and that their ethical behavior that meets community standards should be a baseline expectation.

TOM CONNELL: Does it shine a light on subcontracting and how much it's grown over the years because the only way to offset that is growing the public service again and keeping it in house? What's your view on that in a broad sense?

JANE HUME: Well, I don't think the Commonwealth could ever be expected to do everything on its own. There are some specialist services that the private sector simply must provide and I think that's a realistic expectation. But that said, having those safeguards, having that framework around appointments of private providers, whether it be consultants or anybody else, it should be there. And it should be a base level expectation of the community and should be built into procurement practices by government.

TOM CONNELL: It's grown a lot though, hasn't it subcontracting. Is it fair enough, having a bit of an assessment and going has it grown too much? Has it gone beyond the specialist elements and saying ‘put it out to tender, that’s easier’?

JANE HUME: Well, I think that that's certainly the line that the Labor government is running, but let's face it, there are specialist areas that we do need to be contracted in. And I think even the Labor government would agree that there is going to be contracts with the private sector in the future. So it's really about making sure that all of those-

TOM CONNELL: Yeah but they’ve said they’ve gone too far. Do you disagree with that?

JANE HUME: Well, I don't think we've actually seen a demonstration as to where exactly, it's gone too far and that's probably drawing a long bow from this particular incident, because this particular incident wasn't necessarily a government contract.

TOM CONNELL: I’m going beyond that. Labor has looked at this and said, ‘Look, we think it's gone too far. We want to grow the public service a bit. It might cost something in the short term, but save in the long term and get expertise back in house’. Do you agree or disagree with that?

JANE HUME: Well, they still haven't actually pointed to exactly where that has occurred, and it will and even they have agreed that there will always be cases for using private sector expertise within Commonwealth services. And so it should do it because otherwise you find that, you know, the government simply falls behind. We want to make sure that the private sector and the public sector run and their skill sets run alongside each other. It's not you know, one ahead of the other.

TOM CONNELL: Okay, Peter Dutton has been quoted today as saying that he will work with Labor on the potential PRRT changes. Changing the way in which we're taxing gas and getting more revenue out of it. Do you agree, I guess broadly, though, is this a tax that is fair enough? This was never designed for gas, this particular tax, so raising some more revenue would be good for the country and won't actually scare gas companies away.

JANE HUME: Well, let's face it, the Labor government has had it in for the gas industry from day dot, you know, the first thing they did when they came in was put in a price cap mechanism that there was a massive market intervention. The second thing they did was raise a safeguard mechanism. They did that without any industry consultation. And now finally, they're saying they're going to raise taxes on this industry. And let's face it, this was an industry that essentially, you know, the energy industry and the resources industry was what delivered their surplus just a couple of weeks ago. So they're now raising taxes on this industry. Now, the industry itself has come out and said, ‘Look, we'll take this but only on the basis that this is it. This is fine. I'll stop using us as a punching bag. Because all that happens is that supply then becomes constrained. No one will invest in this industry. And that pushes prices up not just in the short term, but in the long term. as well. So what Peter Dutton has said is that we will work with the government to find ways to reduce the regulatory burden on the gas industry to encourage new investment to alleviate those supply pressures, and hopefully then alleviate the cost pressures on energy in the long term in the short term and in the long term. And I think that's, you know, fair and reasonable. The gas industry are crying out for help here. They want to be able to deliver long term investment and long term price cuts, but they simply can't with all this massive intervention by the Labor government.

TOM CONNELL: See where that goes and I'm sure I’ll talk to you again, down the track. Jane Hume, thank you.