Tuesday, November 10, 2009

They’re Not Consultants, They’re Contractors.

Kevin Rudd’s Labor Government was elected on a number of promises. There was the promise to take action on climate change, the promise to fix health and hospitals, and of course the big one was the promise to dismantle Work Choices. If you cast your mind back to the 2007 election campaign, you might also remember that Kevin Rudd stood up on national television and loudly proclaimed decried what he called the Howard Government’s reckless spending. He promised to put an end to profligacy and to reign in government waste. It was obviously all part of the pitch to depict Mr. Rudd as an “economic conservative.”

Now, two years later, there is plenty of irony in the way things have worked out so far. The Work Choices policy is no longer an issue. The climate change debate is stalled in the Senate with an opposition which is falling apart because it doesn’t know what it believes. The National Health and Hospitals Reform Commission has completed its review, but out here in the real world, health and hospitals are still waiting to be fixed. And after all the emphasis on being an economic conservative and stopping the reckless spending, the impact of the Global Financial Crisis has meant that this government has delivered a record budget deficit, which will be sustained by record government debt.

Now there are very good reasons for that to be the case. The financial crisis was to a great degree unforeseen, and demanded extraordinary measures in response. All the evidence would seem to indicate that those measures have been very successful and have directly contributed to Australia avoiding an “official” recession, and weathering the downturn far better than almost any other country. But it is still a great irony that this government was elected on a promise to reign in spending and has found itself in a position where it has done the opposite. But the fact is that there are all sorts of different kinds of spending, and there is a world of difference between investing in future prosperity, and wasting money.

It has emerged that the money spent by the Rudd government on consultancies has increased by 5.6% over the previous financial year to reach $454 million. While it is an increase over the previous year, it is also less than the $480 million spent by the Howard government in its last full financial year. On that basis, it would appear to fulfill the government’s promise to spend less than the previous government. Unfortunately, it is never that simple. The figure reported for the Department of Immigration and Citizenship has fallen dramatically after an internal review has changed the way consultancies are defined, so that what was previously a consultant might now be a contractor. It would appear that adjusting for such anomalies leaves a result which is at odds with the election promise to cut wasteful government spending on consultancies.

The way things are going, I wouldn’t be surprised if the government hires a consultant to advise them on how to cut their spending on consultants. After all, that seems to be the way this government makes most of its decisions.

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