27 May 1994 Choice but to Put Many of Those Services out to the Opposition Has a Strong Objection to Compulsory Tender
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LOCAL GOVERNMENT (COMPETITIVE TENDERING) BILL 2326 ASSEMBLY Friday, 27 May 1994 choice but to put many of those services out to The opposition has a strong objection to compulsory tender. competitive tendering being forced on local government at the same time as council TIlat brings me to my next concern, which is one of amalgamations are occurring. It is simply asking too the reasons why I fear that the competitive tendering much of anyone, whether a professional full-time process will not pay sufficient regard to the quality administrator or someone managing the of services and the need for councils to meet complexities of amalgamating, in some cases, large community service obligations. All honourable municipalities into one new local government unit at members want local government to increase its the same time to implement compulsory competitive efficiency and get more value for the dollar; but I am tendering. fearful tha t will be measured in monetary terms and will overlook the community service obligations. In the last round of local government amalgamations which are still proceeding some 21 Again, I do not need to look far from home to councils were reviewed and 18 are still in the illustrate my point. My local council provides a top process of amalgamation. It is likely that in the next quality maternal and child health service, which my few weeks the state government will announce final family has used. The nurse we go to is located next boundaries, sack the democratically elected to the town hall and performs her duties to a councillors and put administrators in their place. standard that can only be described as well above The government has also announced a revised time what is required. She usually spends a few hours a line for examining the remaining local government week - Preston has many low-income single-parent boundaries, and most of the action will happen over families - doing the rounds of supermarkets trying the next few months. With the timetable set under to scrounge food that has exceeded the use-by da te the bill, it is clear that it will be commissioners and so that she can pass it on to the single mothers who not elected councillors who will be handling come in to see her, many of whom are 16 or 17 years compulsory competitive tendering. They will decide of age and would otherwise have no food for their which services they will call tenders for and which families. I do not accept that it is appropriate to ones will be contracted out to the private sector. tender out services like that. Could you imagine Geoffrey Edelsten, Or McGoldrick or the Hospital On 8 April along with other opposition members I Corporation of America getting their hands on a ttended a briefing arranged by Ms Leonie Burke, services like that? They would be concerned only Chairman of the Local Government Board. She with output, about how many people a nurse could made a point of saying that she saw commissioners see in an hour. They would not be impressed if she as having only a caretaker role; that they really were went missing in action for some hours to do the only administrators -- rounds of the supermarkets. It is difficult to quantify the extra features of human services in the public Mr Mildenhall - That is not what the Bendigo sector, but those features will be lost if the services bill said! are contracted out. Mr LEIGHTON - It is not how it works in Another obvious area - and this one may be easier Geelong, either. I was not necessarily persuaded by to quantify - is Meals on Wheels. Although I what Ms Burke had to say to us; however I noted happen to think my local municipality provides one some of her words. She said that commissioners of the most cost-effective services, I have my doubts should follow previous policy decisions of councils whether anybody in the private sector will be able to made in previous budgets, and she further said that tender more cheaply for it It is proposed to the Local Government Board sees the commissioners amalgamate my local area of the City of Preston as having an administrative role and that they with most of the City of Northcote to form the new should be responsive to history. City of Darebin. In the case of the City of Preston the people who deliver the Meals on Wheels are paid, It is clear from the bill, because of the time line set, but that is not the case in the City of Northcote. The that the commissioners are already performing service is prOVided through voluntary labour, and I much more of an administrative and caretaker role. ask: if that service is to be contracted out could one They will be the ones implementing competitive imagine for a moment volunteers being prepared to tendering because of the time line and because work gratis for a private organisation? That is an councils have to meet the 50 per cent contribution in area that may end up being far more expensive for the third year. They will be making the policy some local councils. decisions, deciding which of the services they will LOCAL GOVERNMENT (COMPETITIVE TENDERING) BILL Friday. 27 May 1994 ASSEMBLY 2327 call for tender; they will be deciding whether many record if a council has failed to meet any of the of the human services, specifically in the home and targets in a particular year. community care (HACC) areas, are contracted out. While the government and the Local Government In his second-reading speech the minister pointed Board are trying to dress up council amalgamations out that the government would not hesitate to adopt as providing big savings, they will be intent upon a more rigorous and regulatory approach if this was trying to demonstrate that they have saved as much not achieved. I would be interested to know just money as possible in competitive tendering what he meant by that and whether he will do it notwithstanding the effects it will have on the through regulations, or if the government, in quality of the service. anticipating that this is not going to work, is foreshadowing that it will have to introduce further Going by the bill, the reports from the Local legislation at a later date. Government Board that I have read and various decisions and discussions that have occurred, I do Although much of the debate so far has been on how not believe enough consideration has been given to these compulsory competitive tendering what is meant by productivity. As I said earlier, my requirements will impact on councils, very few theory is that it will be seen simply in terms of dollar people have had regard to some of the broader cost: how many units of output one can get per hour tendering issues affecting this community. I refer in without regard to the quality of the service and particular to the work of the parliamentary whether it meets the needs of the community. Economic Development Committee, which has a wide-ranging reference into the Victorian building There are further concerns I wish to express about and construction industry and which tabled its first the technical nature of the bill. I believe that there is report in Parliament 12 months ago in May 1993. a lack of definition of what a competitive The committee found evidence of widespread arrangement means at the end of the day. There is a collusive and corrupt practices in the tendering lack of benchmarking, and one can argue that the process throughout the state. On large jobs where bill contains conflicting areas. There is albeit a subtle tenders were called for large companies would get difference between the definition under clause 1 into one room and effectively agree on a fixed price. headed 'Purpose' and that which follows. I am They would then do a number of things. Companies referring specifically to clause 1 which provides that that did not want the work would put in councils have to participate in competitive tendering unrealistically high bids to ensure that the company arrangements with respect to a specified percentage they all agreed to get the work would be the of their total expenditure. successful tenderer. Each company would load its tender price and then the successful tenderer would However, later on proposed section 208A(1) inserted disperse some of that money to the other companies by clause 3 refers to: or to an industry body. ... a total value of 50 per cent or more of the total In taking evidence, reaching its findings and making expenses set out in the Council's operating statement recommendations, the committee believed those for that year. collusive and corrupt practices did not stop in the state public sector but concluded that they applied I see that as a subtle difference in definition of the in the local government area as well. At page XIX of same concept and I am not sure what conflict that the committee's first report recommendation 3.2 may create. I shall put on the record the opposition's states: concern that there are no drafting regulations on the table. I realise that in a legal sense there is no The committee finds that, in regards to tendering for obligation on a government to produce regulations local government projects, it has: until after the legislation has been proclaimed, but in a matter as important as this it would have been not been able to identify in tender documentation any helpful.