16-August-2011
Portfolio Media Releases
Topics: Government’s poor procurement standards, budget surplus, the economy.
E&OE
ANDREW ROBB:
It’s been revealed that Penny Wong, supposedly the watchdog and her department, that a staggering 70 per cent of all the procurements made by the Department of Finance have been non-compliant with the guidelines that the department itself laid down for proper purchase of government items.
This has gone from 55 per cent three years ago, 58 per cent and now 70 per cent of procurements.
This is the watchdog Penny Wong is supposed to be the watchdog after years of wanton waste with pink batts and school building halls, with $1000 cheques. Here is a department which is now non-compliant in 70 per cent of its own procurements.
If you put it across the government sector we are talking about around $33 billion a year so over the four year cycle about $130 billion worth of procurements, you could expect this same incompetence and lack of attention and lack of value for money to apply right across this government sector.
No wonder we’ve got a problem with budget deficits, no wonder we are vulnerable to another meltdown around the world in terms of finances. This government is incompetent and untrustworthy and even the watchdog Penny Wong and her department have failed the basic test of giving value for money for taxpayers’ money.
QUESTION:
Do you think Andrew that the government should still stick by its promise for a budget surplus given the uncertainty in world market?
ANDREW ROBB:
The government certainly should be looking to give value for money that means driving for budget surpluses. We have said all along that this government’s budget is a house of cards. Now we are seeing they are already stepping away from that cast iron commitment to give a budget surplus net year. We’ve never assumed that they would get it. It’s been a fiction since day one, but their economic management credentials will hang on whether they get that surplus.
QUESTION:
But is it prudent for the government to stick to the surplus given the economic conditions?
ANDREW ROBB:
Well as it has been reported today, 70 per cent of government procurements are non-compliant with the guidelines for achieving value for money. Now if they can get their house in order you take that with an improvement in the order of 10 per cent, you’ve got $10 billion over the cycle, you’ve got $13 billion over the cycle.
There is a lot of money there to be saved if you are prudent about it. If they use this excuse of a global financial crisis to allow another $50 billion of deficit then they are culpable.
This is an untrustworthy government they’ve promised they’ve given cast iron commitments, in many ways they got through the last election on a bunch of lies about the carbon tax for starters and about their economic management, how they would get to a surplus. Now the chickens are coming home to roost and they deserve to be politically punished for it.
QUESTION:
Mr Robb, having the Coalition warning of a meltdown in the economy, that’s not exactly [inaudible] much confidence?
ANDREW ROBB:
We have been saying now for over 12 months that the priority of this government must be to restore the economic resilience that they inherited and yet they’ve gone ahead endlessly with $50 billion deficits this year, $49 billion deficit, the coming year looks like something over $20 billion.
We have been warning that if you don’t get your house in order, do what households are doing around the country and that is living within their means that we will as an economy be vulnerable in the face of a meltdown.
We haven’t caused the meltdown we’ve been trying to ring the bell and let the government know that they should have been changing the way in which they’ve gone about managing this economy.
QUESTION:
So you think our economy is facing a meltdown or do you think our economy is facing a meltdown?
ANDREW ROBB:
No, there is a real prospect though I mean all of the commentators are of the view that there’s what I saw yesterday a 50-50 chance of there being another serious financial problem around the world.
This government has made Australia very vulnerable to another meltdown.
QUESTION:
So would you be in favour of another stimulus package just in case there is another meltdown or would you rather return to surplus?
ANDREW ROBB:
The best thing this government can do is to live within its means. That will give business confidence to invest, that will give households confidence to spend money.
The trouble is people have got no confidence in the incompetence of this government. If you look at things from the live cattle job, the way in which they grossly mismanaged that, the whole pink batts exercise of school building halls.
Everything they touch has turned to custard with this government, they are weak and untrustworthy when it comes to spending money and this incompetence has undermined business confidence so if they got their house in order, started living within their means we would then see far more investment in this economy and we would see things start to lift.
QUESTION:
So if turns down would you rather just the Reserve Bank stimulate the economy and not the government?
ANDREW ROBB:
We’ve got lots of automatic stabilisers, we’ve got interest rates that can be lowered significantly we’ve got an exchange rate that would respond to lower commodity prices. This is what got us last time with a very healthy economy and with interest rates dropping over three per cent, with the exchange rate dropping down from 90 to 60 in the dollar, these were the things that got us back on track, it was after we were coming out of it really that the government spent most of the money.
That’s added to interest rates, that’s added to deficits, that’s added to our debt and it’s made us again very vulnerable if there is a further meltdown around the world.