The amalgamation of the parliamentary service departments and the DPS
This chapter details the attempt to achieve efficiencies in the
administration of Parliament House by the amalgamation of service provision
departments under the Department of Parliamentary Services. It also examines
the DPS budget and the effect of the efficiency dividend.
Amalgamation of the service departments
From 1901, the Commonwealth Parliament was serviced by five departments:
- Department of the Senate;
- Department of the House of Representatives;
- Parliamentary Library;
- Department of the Parliamentary Reporting Staff (to 1990 known as
- Joint House Department (JHD).
Over the decades, numerous reviews of the administration of the
Parliament have been undertaken, and unsuccessful attempts were made to amalgamate
the parliamentary departments. Proposals have included amalgamating all
departments into one department or creating three departments:
- 1910: the Prime Minister, the Hon. Andrew Fisher, questioned the
need for five parliamentary departments;
- 1933: the Pinner Inquiry examined the introduction of economies
into the Parliament and suggested the merger of all five departments into a
- 1953: the review undertaken by the Acting Assistant Public
Service Commissioner, LO Brown, proposed that all accounting work and staff
work be transferred to the JHD and recommended that the five parliamentary
departments be amalgamated into one;
- 1977: the Manager of Opposition Business in the House, the Hon.
Gordon Scholes, wrote to the Speaker of the House of Representatives suggesting
that a Department of the Parliament be established by amalgamating the three
- 1980: at the request of the Presiding Officers, a management consultancy
company undertook a review of the three service departments and proposed that
they be merged;
- 1981: the JHD undertook a pilot study for the coordination of
personnel services across the parliamentary departments;
1982: the Senate House Committee reported on its inquiry into the
JHD and recommended that other matters be dealt with before examining
amalgamations of the parliamentary service departments;
- 1987: the Presiding Officers proposed a restructure of the administration
of the Parliament. Some administrative changes were implemented and the
Parliamentary Information Systems Office was established but no amalgamations
- 1988: the Speaker introduced the Public Service (Parliamentary
Departments) Bill 1988 which sought to reduce the number of departments from
five to three. The Bill was passed in the House of Representatives but was not
considered in the Senate;
- 1993: the Speaker introduced the Public Service (Parliamentary
Departments) Bill 1993 which sought to amalgamate the Departments of the
Parliamentary Library and Parliamentary Reporting Staff. The Bill was passed in
the House of Representatives but the order for the day relating to its
consideration was discharged from the Notice Paper in the Senate;
- 1996: the National Commission of Audit suggested to the
Government that corporate functions should be combined into a single department
with Offices of the Senate and House of Representatives, if required, and other
functions contracted out;
- May 1996: the Hon. David Martin, former Speaker, introduced the
Public Service (Parliamentary Departments) Amendment Bill 1996 which proposed
to amalgamate the three service departments. This Bill was not proceeded with;
August 1996: the heads of the parliamentary departments responded
to the Presiding Officers on the possible rationalisation of, and services
provided by, the five parliamentary departments. All heads supported a two or
three department structure. Mr Noel Tanzer was appointed by the Presiding Officer
to review the responses;
- 1997: following the consideration of the suggestions of the heads
of the parliamentary departments provided in August 1996, the Presiding
Officers decided to implement a management structure based on the two chamber departments.
Departmental heads were appointed as a steering committee to implement the
structure. The working group to the departmental heads reported in March 1997;
- June 1997: the Senate referred the matter to the Senate Standing
Committee on Appropriations and Staffing which recommended that the Senate not
support the proposal in the form agreed to by the Presiding Officers.
In 2002, at the request of the Presiding Officers, Mr Andrew Podger,
then Parliamentary Service Commissioner, undertook a review (Podger Review) of
the administration of the Parliament.
The review examined the advantages, both financial and organisational, which
may arise from changes to the administration of Parliament House security; the
extent to which the management and corporate functions could be managed in a
more cost effective and practicable manner; savings arising from centralisation
purchasing; and any other organisational matters affecting parliamentary
administration during the review. The premise of the review was that any
changes in administration must maintain or enhance the quality of services to
senators and members.
The review found potential for significant improvements in
administrative effectiveness by:
- centralisation of some activities to achieve economies of scale
that are not possible in five small parliamentary departments operating
- enhanced standardisation of systems and software across
- improved coordination between the departments; and
- clarification and simplification of management and governance
In relation to management and corporate functions, the Podger Review provided
two major options for consideration:
- Option 1: incremental improvement by way of a
shared-services centre providing transactional processing management and
corporate services to the five parliamentary departments under a cooperative
purchaser/provider model; and
- Option 2: amalgamation of the three service provision
parliamentary departments. This option included additional recommendations in
relation to the independence of the Parliamentary Librarian and resources and
services provided to the Library.
The Podger Review supported the amalgamation of the three service
provision departments as it considered that this option offered significantly
greater gains. If this option were to be implemented, the Parliament would be
serviced by the two chamber departments and a single 'joint' or amalgamated
The Podger Review judged that 'salary savings of $3 million a year in
the corporate area would be achievable in the medium term (2–3 years). Allowing
for on-costs and overheads, this would generate savings of the order of $5
million a year'.
Other recommendations included that a centralised security organisation
be established; the Senior Management Coordination Group (SMCG) assume greater
responsibility for coordinating strategic ICT issues; the SMCG be given formal
responsibility for procurement of common items in circumstances where there is
benefit to the parliamentary departments to do so; and a team be established to
manage the implementation process.
The Podger Review concluded:
The proposed new management and governance arrangements for
security are primarily aimed at improving the quality, efficiency and
appropriateness of security at Parliament House – to ensure the security
function is equipped to deal with the new more challenging environment in which
the Parliament operates. These proposals are not aimed at making savings – it is likely that, in the short term, costs would increase
We estimate that implementation of a shared-services centre
for HR, finance and office services transactional-processing activities could
generate modest efficiencies of $1.5 million per year.
It is our judgment that the preferred option of amalgamation
of the service-provision departments would generate cost efficiencies of the
order of $5 million to $10 million a year once fully phased in.
Realising this potential could free resources that the
Presiding Officers could redirect to other parliamentary priorities, e.g. to
meet the financial pressures likely to emerge for improvements in security, to
improve the quality of services provided to Senators and Members or to generate
productivity improvements needed to support future Certified Agreements for
In his submission to the committee's inquiry, Mr Podger noted his recommendation
to amalgamate the then three service departments into one department and added:
In recommending this option, however, I did not mean to rule
out the use of 'shared services' agreements amongst the three remaining
departments, where any one of them might provide relevant technical support to
the other two, though my assumption was that DPS would be the main provider of
common services to both Houses of Parliament.
Consideration of the Podger Review
The Podger Review was considered by the Senate Standing Committee on
Appropriations and Staffing in June 2003. The Appropriations and Staffing
Committee was concerned by the lack of evidence for the savings claimed in the
amalgamation proposal and the lack of independent verification of the figures.
At the same time, the Appropriations and Staffing Committee commented on
the need to fund enhanced security measures at Parliament House as a
consequence of the changed security environment. In April 2003, the Minister
for Finance and Administration advised the Presiding Officers that the
Government would provide funding of $25.5 million over four years for
enhancement of security. However, savings would need to be made against the
appropriations for the parliamentary departments of equivalent amounts over the
last three of those four years through the introduction of efficiencies either
by implementing the recommendations of the Podger Review or by alternative
The Appropriations and Staffing Committee stated:
The requirement to find offsetting savings of this quantum
changes the dynamics of the consideration of the review. The review arose as an
assessment of potential administrative and organisational savings measures,
which could be returned in the form of enhanced services to senators and
members (as maintained throughout the review document). In the new budget
context, it becomes a search for cuts required by the Government to meet
unforeseen costs for the enhancement of security at Parliament House.
The Appropriations and Staffing Committee agreed that a resolution
proposing the amalgamation of the three service departments and ensuring the
independence of the Parliamentary Librarian, proposed by the President, be put
to the Senate for determination. The Senate agreed to the amalgamation on 18
August 2003 and further resolved:
(1A) Any savings achieved by the amalgamation may be used to
offset increases in costs of security measures approved by the Presiding
Officers for Parliament House, but if those increases in costs exceed those
savings, the appropriations for the Parliamentary departments are to be
supplemented for the excess; and
(1B) Any redundancies arising from the amalgamation must be
of a voluntary nature and that no staff will be forced to take involuntary
redundancies as a result of the amalgamation.
(2) The Senate supports
the Presiding Officers in the following endeavours:
reinforce the independence of the Parliamentary Library by strengthening the
current role of the Library committees of both Houses of Parliament;
(b) to bring
forward amendments to the Parliamentary Service Act 1999 to provide for
a statutory position of Parliamentary Librarian within the new joint service
department and conferring on the Parliamentary Librarian direct reporting
responsibilities to the Presiding Officers and to the Library committees of
both Houses of Parliament;
ensure that the resources and services to be provided to the Parliamentary
Library in the new joint service department are specified in an annual
agreement between the Departmental Secretary and the Parliamentary Librarian,
approved by the Presiding Officers following consideration by the Library
committees of both Houses of Parliament; and
consider, after the establishment of the joint service department, that
department providing human resources and financial transaction-processing
activities for all the Parliamentary departments, subject to such an
arrangement being proven to be both cost-effective and efficient.
The House had already agreed to a similar resolution on 14 August 2003.
The Department of Parliamentary Services (DPS) was established with effect from
1 February 2004.
Australian National Audit Office performance
In June 2006, the Australian National Audit Office (ANAO) reported on
its performance audit, Implementation of the Parliamentary Resolutions Arising
From the Review by the Parliamentary Service Commissioner of Aspects of the
Administration of the Parliament.
The audit arose out of advice by the Joint Committee of Public Accounts and
Audit, in August 2003, that the administration of the parliamentary departments
represented an audit priority.
The ANAO audit findings included that there had been improvement in the
management and coordination of Parliament House security services and the
substance of the recommendation in relation to physical security had been met.
In relation to the amalgamation of the three service departments, the
ANAO acknowledged the 'significant efforts' undertaken by DPS to form the new
department but considered that a more formal planning process could have been
put in place. In addition, the chamber departments and DPS had chosen differing
Human Resource Management Information Systems and Financial Management
Information Systems which 'has not provided a foundation for the parliamentary
departments to efficiently move in the future towards a shared services
centre'. The ANAO found that, while not all the efficiencies envisaged by the
Podger Review had been realised, DPS had been able to absorb reductions in
departmental appropriations of approximately $6 million per annum with only
minor changes to its services.
The ANAO also commented on the Podger Review's other recommendations:
Parliamentary Library: two of the three parliamentary resolutions
in relation to the Parliamentary Library had been implemented with the third,
an annual resourcing and services agreement, to commence in 2006–07;
SMCG: the recommendations that the SMCG assume a greater role in
relation to ICT and that it take on responsibility for procurement of common
items had not been adopted;
- measurement of client services: while there was a framework in
place to measure and report service levels, the ANAO considered that there was
scope to improve how service levels are measured by including timeliness or
responsiveness indicators. The ANAO considered that a survey to measure client
satisfaction should be undertaken in the post-amalgamation environment; and
- Parliament House accommodation: the ANAO noted that a number of
reviews of accommodation had been undertaken which had all identified the
shortfall of accommodation space in Parliament House. It was also noted that
the number of staff in the parliamentary departments had not declined
significantly since the Podger Review. In addition, in 2006 the SMCG had
outlined a strategy to assess short and long-term accommodation requirements of
all occupants of Parliament House.
Review by the Parliamentary Service
In 2007–08, with the agreement of the Presiding Officers, the then
Parliamentary Service Commissioner, Ms Lynelle Briggs, undertook a review of
the implementation of the amalgamation of the three service departments. The
Commissioner reported to the Presiding Officers on 16 June 2008 that:
The general conclusion was that, while it is difficult to
isolate and measure change that has happened as a direct result of amalgamation
and change that has occurred, and is still occurring, as a result of management
intervention following amalgamation, the two together have delivered
significant financial savings to the Australian public.
The Parliamentary Service Commissioner also stated that further savings
were possible through the full implementation of the Podger recommendations,
particularly the establishment of a shared services centre to provide HR and
financial transaction-processing activities for all the parliamentary
departments. It was noted:
The review considered that the duplication of functions in
the three existing departments was not cost effective and that efficiency gains
could be achieved through the economies of scale a shared services centre would
The Parliamentary Service Commissioner made five recommendations:
- that priority be given to investigating and implementing a shared
that the terms of reference for the SMCG be amended to include
oversight of strategic ICT for the whole of Parliament, that DPS provide more
senior representation for SMCG and that the Chief Information Officer position
be established as part of the new shared services centre;
- that SMCG review procurement activity on a regular basis to
ensure effective operation of existing arrangements and to monitor unnecessary
duplication and to consider the effective implementation of central procurement
guidance that requires coordination between the three parliamentary
- that the Project Assessment Committee conduct a regular
self-assessment process of its performance and effectiveness; and
- that the three parliamentary departments establish a working
party to develop a strategy for promoting whole-of-parliament working,
cooperate to provide regular training on the Parliamentary Service Values to
staff, and review their processes for embedding the Parliamentary Service
Values into their governance and performance management arrangements.
In commenting on these recommendations, the current Parliamentary
Services Commissioner, Mr Stephen Sedgwick, stated that they 'emphasised the
desirability of looking for better ways for the parliamentary departments to
continue to work together to take advantage of strategic opportunities and
achieve economies of scale not available to smaller organisations'.
The Presiding Officers sought a joint response from the heads of the
three parliamentary departments to the recommendations made by the
Parliamentary Service Commissioner and a working group was established to
consider a shared services centre. The majority of the other recommendations
Over the last three years, DPS has sought further efficiencies and cost
savings with the Department of the House of Representatives commencing provision
of payroll services to DPS during 2009–10. During 2010–11, the parliamentary
departments continued work towards common service arrangements across the
departments with developments including:
- a furniture style guide to provide a model for the procurement of
administrative office furniture throughout Parliament House;
- collaboration on a comprehensive services catalogue; and
- a joint protective security policy for the parliamentary
departments encompassing physical security, personnel security and ICT
Efficiencies and savings achieved through amalgamation of the three service
The Podger Review commented that significant savings, from $5 million to
$10 million per year once fully implemented, could be gained through potential
cost efficiencies of the amalgamation of the three services departments.
The actual savings were estimated at $5.2 million with savings in the order of
$3.7 million in the first year.
The level savings and the costs of implementation were explored during
the May 2003 Budget estimates hearings. The costs of implementation of the
amalgamation, including redundancies, were estimated at $1.2 million. This
figure was seen as 'optimistic' by the then Clerk of the Senate, Mr Harry
DPS also advised the ANAO that, as at 30 January 2006, the estimated total cost
of the amalgamation was $1.6 million.
DPS indicated in its 2003–04 Annual Report that 'guaranteed' net savings
from staff reductions was close to $1.5 million and that 'the savings from
staff reductions so far achieved is considerably less than that predicted in
the Podger Report'. Other savings from on-costs, overheads and economies of
scale were around $0.6 million per annum.
During the Budget Estimates 2004–05, the then Secretary of DPS, Ms
Hilary Penfold, stated that DPS would be unable to find $5 million worth of
savings in the first year following the amalgamation and 'probably not for
quite a lot of years, if ever'.
Ms Penfold went on to state:
One of the difficulties is that we have not until now been in
a position to go to the department of finance and actually say, 'Here are the
savings, and you can see that they are nowhere near $5 million.' That is what
we will be doing in August in the context of additional estimates. We will be
showing the department of finance where we have made direct, obvious savings,
where we think there might be some scope for more efficiencies and then where
we will have to make cuts to make up the rest of those savings. They will then have
to decide whether they are prepared to fund those services continuing or
whether that is what they want done.
Ms Penfold quantified the savings attributable to the amalgamation as
'just under $2 million' at the Budget Estimates 2006–07. Ms Penfold went on to
state that DPS had provided this information to the Department of Finance and Administration
(Finance) as the DPS appropriation had been reduced by $5 million but Finance,
while giving an undertaking to look at the information, 'never have'.
The committee has only been able to identify limited additional evidence
in relation to the savings arising from the amalgamation, notwithstanding that
savings had been a central aim of the Podger Review's recommendations. In 2004,
for example, a consultancy report was provided to DPS following a Financial
Assessment and Due Diligence Review of the three former departments. The report
estimated the savings arising from the amalgamation at between $2.2 million and
$2.4 million per year excluding transition costs. The ANAO noted that this
report was provided in March 2004, following DPS's establishment on 1 February
the same year.
The ANAO's performance audit also noted that, following a 2003–04 Budget
decision, DPS had absorbed a reduction in appropriations of $6 million per
annum. Of this amount, DPS identified approximately $2 million per annum in
savings directly attributable to the amalgamation, offset by the estimated $1.6
million cost of amalgamation as at 30 January 2006. The ANAO commented
that while not all the efficiencies envisaged by the Podger Review had been
realised, DPS had absorbed the reduction in its appropriations and had advised
that there were only minor changes to services.
In his submission to the committee, Mr Podger commented that he was not
aware of any formal evaluation to test the savings achieved by the amalgamation
but he understood from evidence provided at estimates hearings that 'there was
broad acceptance amongst the heads of the three departments that useful
efficiencies had been achieved notwithstanding some earlier scepticism'.
He stated that:
I also envisaged that the gains from amalgamation would
enable a shift in resources from internal management towards the provision of
improved services to Senators and Members, as mentioned in my letter of
transmittal to the Presiding Officers. I did not recommend direct savings to
the budget though I did expect some of the gains should be used to meet the
requirements of the then efficiency dividend and contribute to the productivity
offsets required for the then impending pay agreement.
Mr Podger also noted the possible effect of the efficiency dividend on
services to senators and members:
I am not in a position to assess whether services to Senators
and Members have improved. I should think the new arrangements have improved
broader strategic advice and management in the Parliamentary Service, but I
fear the cumulative effect of the efficiency dividend and limited price adjustment
for wage increases in the years since amalgamation may include the clawing back
of any service improvements.
Mr Podger added:
I suggested in the report that further consideration be given
to rationalising the responsibilities of the Parliamentary Service and the
Department of Finance in the administration of the Parliament, including beyond
the confines of Parliament House. Again, I was not focussing on savings but on more
coherent and effective support for Senators and Members. I understand some
progress has been made in the area of IT, which I specifically mentioned. There
may still be scope for improved support for facilities, but I do understand the
argument that Finance should retain responsibility for Senators' and Members'
entitlements, given that Department's greater arms' length separation from
individual Parliamentarians and its financial discipline.
The DPS submission did not provide any assessment of efficiencies
achieved as a result of the amalgamation. Instead, it focussed on the
challenges of providing appropriate levels of service given the decline of its operating
Department of Parliamentary Services budget
In addition to the funding decrease experienced as a consequence of the amalgamation
and increased security costs, DPS has faced tighter fiscal circumstances due to
budget decisions regarding levels of appropriations and the effect of the
The following discussion provides an overview of the DPS budget since its
establishment in 2004.
In 2002–03, the combined departmental appropriations for the three
parliamentary service departments was $105.5 million. The combined departmental
appropriations (three service departments and DPS part year) for 2003–04 was $98.9 million.
The 2004–05 DPS budget reflected a $4.84 million decrease related to a 2003–04
budget decision to reduce the appropriations to the then five departments by
$6.14 million to offset the funds provided for increased security.
Following the transfer of security funding from the chamber departments to DPS,
the entire $6.14 million reduction was applied to the DPS budget. DPS
received a one-off supplementation of $1.3 million in recognition that the
chamber departments could not find the required savings in the first year.
In subsequent years, DPS's budget has reflected the effects of the
efficiency dividend and other budget decisions. DPS provided its 'adjusted
operational appropriation' for 2000–01 to 2011–12 to illustrate the impact.
Table 8.1: DPS adjusted operational appropriation 2000–01 to
Source: Department of Parliamentary Services, Submission 3, Attachment A, p. 7.
DPS stated that the adjusted appropriation figures are the operational
appropriation including new policy proposal funding for each financial year.
For 2000–01 to 2003–04, the combined appropriations for the three former
service departments have been adjusted for depreciation funding. The 2004–05 to
2009–10 figures are the operational appropriation less depreciation. The
2010–11 and 2011–12 reflect the use of capital budget statements. The 2011–12 figure also excludes the one-off
pre-election funding for the Parliamentary Library.
DPS reported a reduction in real funding of 19 per cent between 2000–01
DPS also provided the committee with an indication of the decline in its budget
in terms of purchasing power. DPS noted that since 2000–01, the Consumer Price
Index (CPI) has increased by 35 per cent while DPS operational funds increased
by around 4 per cent. Taking the period from the commencement of DPS, the
operational budget increased by less than 1 per cent, while the CPI increased
by 25 per cent.
However, DPS indicated that it had faced significant cost increases above the CPI
for many of the services and products purchased externally (for example, water,
electricity, gas and external guarding) and it had in place certain contracts
(notably cleaning and equipment maintenance) where costs were linked to CPI.
For example, at the Budget Estimates 2009, DPS commented that it would have to
find savings of some $4.5 million due to increased costs for electricity,
Comcare and Comcover premiums, Australian Protective Services to secure the
perimeter of Parliament House, and wage increases for DPS staff.
In addition, DPS, as with both Chamber departments, has had to take
account of the fluctuations in workload and cost, as a result of the changes in
For example, the 2008–09 DPS Annual Report stated:
In the shorter term our operational budget is under
considerable pressure. The work rate of a new Government has greatly increased
the level of parliamentary activity, including chamber business and committee
business. There is a flow-on increase in DPS operating costs. However, the
available operating funds for DPS have changed very little for nine years; in
terms of purchasing capacity our budget has declined significantly over this
period. Without extra funds, we will therefore continue to operate with increasing
DPS indicated that the additional one-off 2.5 per cent efficiency
dividend imposed in 2012–13 would result in a reduction in its operating
appropriation of approximately $2.6 million in 2012–13, $2.6 million in
2013–14, and $2.7 million in 2014–15 and 2015–16.
The departmental capital program would reduce by approximately
$2.4 million in 2012–13, rising to a reduction of approximately $5.4
million in 2014–15.
DPS has received a number of additional appropriations including funding
for security upgrade work in and around Parliament House in the 2010–11 Budget.
From late 2011, DPS took on responsibility for electorate office information
technology from the Department of Finance and Deregulation. Additional funding
was also received for this new program. Additional funding has also been
provided in recognition of increased workload. For example, in 2011–12 some
$337,000 was provided as a consequence of the increase in activity in the House
of Representatives and its committee system. However, DPS noted that the effect
of the efficiency dividend was such that 'the net effect of any increases is
that we have some funding increase but is well below CPI increases for the
The Presiding Officers have also raised the changes to the DPS budget
with the committee. The Presiding Officers noted that 'the context for the work
of DPS is defined by the very tight fiscal environment in which it works'. The
Presiding Officers went on to comment:
For the financial year 2011–12, DPS received an operational
appropriation of $103 million. This represents a modest increase of about
$1 million, or less than one per cent of its budget, since DPS commenced
operations in 2003–04. The funding of DPS has not grown in line with the rising
cost of doing business. Considering the rise in inflation of around 25 per cent
over the past eight years, the operational funding of DPS has effectively
decreased in real terms by more than $20 million. Based upon the most recent
budget papers, this steady decline in purchasing power will continue into the
Response to budget changes
DPS indicated that in order to fund the efficiency dividend, it has
sought savings through the introduction of cost savings measures and the
reduction of staff numbers 'but most "no regrets" savings have been
DPS noted that, wherever possible, it has sought to minimise the effect of
savings measures on parliamentarians.
In relation to cost saving measures, DPS stated that savings measures
- rationalisation of corporate services following the amalgamation
and subsequently, DPS has entered into a shared services model for payroll
services, which are now provided to DPS by the Department of the House of
- reform of work practices and systems in various areas such as
- reduction of the area of the building to be painted each year by
40 per cent with painting targeted to areas of identified need;
- support of interstate committee hearings by a single officer,
rather than the previous practice of sending two officers (Hansard and
- adoption of new technology to assist with service delivery, for
example an increasing proportion of Parliamentary Library work is conducted via
electronic service delivery; and
- transfer of staff and storage to Parliament House from offsite
locations where DPS had been paying rent.
At the February 2012 Additional Estimates, DPS commented that it was
reviewing its capital program to meet the 20 per cent reduction to departmental
Dr Dianne Heriot, Parliamentary Librarian, commented on the effect of reduction
of 20 per cent in the Library's capital budget:
It will effectively impact on our reference collection.
Around one in four, net effect, reference titles will be cancelled and one in
four monographs will not be purchased. We are still working though this in our
collections development area. It is likely that the impact of the impost may
not be felt until the financial year after this coming one, as we pay
subscriptions and things like that towards the end of the financial year. But
we are going through working out cuts to meet the new measure.
DPS also noted that as staffing costs are a large part of its budget,
61.4 per cent in 2011–12 (up from 55 per cent of operating budget in 2005),
it would be difficult to absorb the efficiency dividend without any impact on
the overall budget for staff costs.
The committee notes the change in the number of DPS staff: full-time equivalent
(FTE) staff at July 2004 (the first full year of DPS operations) was 866 and at
May 2010 was 731, a drop of 135. Staffing levels at August 2009 were 771 and at
May 2010 were 731, a reduction of 40.
The reductions during this time were found through transfer of the DPS payroll
function to the Department of the House of Representatives (8 FTE);
efficiencies in security operations (18 FTE) and facilities section (8 FTE);
reorganisation of SES responsibilities (1 FTE); and other reductions (5 FTE). In
2010–11 staff levels were reduced by over 20 FTE.
In relation to the reorganisation of SES responsibilities in 2009–10, Mr Thompson
commented at the 2011 Budget Estimates:
We were very conscious of our budget outlook. It has
basically been the same number of dollars for 11 years. Each year DPS and its predecessor
organisations have been making do with a bit less real purchasing power.
Two-and-a-bit years ago we worked out a way we could run the place effectively
with one less SES officer. That officer left to go and work on the upcoming
CHOGM in Perth. Since that officer left we divided up the corporate functions
across a range of SES officers. The chief finance officer took on some
additional responsibilities, I took on some additional responsibilities and the
librarian took on some additional responsibilities.
The committee notes that the responsibilities taken on by the
Parliamentary Librarian were those of the DPS human relations section. Mr
Thompson went on to state that a further reconfiguration of staffing was taking
place, and once finalised, the Parliamentary Librarian no longer has
responsibility for the human resource function.
DPS advised that a further reduction of around six staff were planned
...as a result of the declining purchasing power of the DPS
operational budget for 2011–12. It was noted that these reductions would be
achieved largely through natural attrition but voluntary redundancies will be
offered in line with the Parliamentary Service Act and the DPS employment
As at 18 January 2012, the FTE was 706.32.
In 2012–13, a further reduction of 18 FTE is expected.
DPS also noted the increase in the number of non-ongoing staff (which
includes casuals). It stated that this was 'largely related to the steady
decline in purchasing power of the DPS operational budget since 2004' with
various branches seeking to contain and reduce costs 'including by making
changes in the balance of ongoing and non-ongoing staff'. The numbers of
non-ongoing staff rose from 76 in 2007–08 to 106 in 2010–11. This represents an
increase in the proportion of non-going staff from 8.2 per cent in 2007–08 to
12.6 per cent in 2010–11 with the Content Management Branch having the greatest
proportion of non-ongoing staff (22.7 per cent).
The effects of DPS's declining budget and the efficiency dividend on the
building, the provision of services and the impact on staff were raised with
the committee. The Presiding Officers commented on the continued application of
the efficiency dividend and stated that the ability of DPS to meet the needs of
the Parliament is being compromised:
The ability of DPS to meet the evolving needs of the
Parliament is compromised by the application of Government efficiency dividend
funding reductions over many years. We have worked with DPS to find more
efficient and alternative ways of delivering services As a consequence,
staffing levels have been reduced and, where necessary, particular services
have ceased or have been modified. The continuation of this situation has the
potential to adversely affect day-by-day service delivery for the Parliament,
and could also compromise the long-term maintenance of this iconic building.
The Joint Standing Committee on the Parliamentary Library also pointed
to impact of the efficiency dividend on the Parliamentary Library and consequently
the Parliament. The Committee commented:
Each year the Committee considers and makes a recommendation
to the Presiding Officers on the resource agreement between the Parliamentary
Librarian and the Secretary of DPS. This year the Committee advised that it was
concerned about the resources available to the library, in particular, the
adequacy of the resources to provide research services that meet the needs of
Parliament, skills for delivery of online services and digitisation of
collection material, in particular radio and television programs. The committee
has expressed concerns about resources for a number of years.
The Library has, before and since the creation of DPS,
experienced over a decade of efficiency dividend reductions and has achieved significantly
improved productivity from its resources. A consequence of the efficiency
dividend has been a reduction in the ability to purchase information resources
for use by Senators and Members. Achieving further efficiencies to fund the pay
increases necessary to attract and retain skilled staff and meet efficiency
dividend reductions without significant cuts in services is a very difficult
task. The pressure of increasing costs and the efficiency dividend will lead to
a further reduction in the number of staff delivering research services, simply
because of the predominance of salaries in the Research Branch budget (99%).
The committee considers that adequate funding for library
services is essential for a well functioning parliament.
DPS pointed to the difficulties of maintaining assets with a declining
budget. DPS stated:
In the medium to long-term, the decline in purchasing power
will also affect the ability of DPS to maintain the assets of Parliament House
to an acceptable standard of reliability. The decline in purchasing power also
makes it very difficult to establish and deliver on more rigorous standards for
In relation to the capital budget, DPS commented:
...the purchasing power of our operating budget is steadily
declining. This budget is used to provide day-to-day services, AND to maintain
Parliamentary assets. Careful investment of capital funds can partially offset
this decline in purchasing power of the operating budget, but we believe there
will soon need to be a different approach to operational funding to prevent
unacceptable deterioration of key assets leading to an unnecessarily early requirement for renewal.
DPS also commented in February 2012 that it was reviewing its capital
program to meet the 20 per cent reduction to the departmental capital budget.
Concerns about the long-term impact of lower spending on the building
were raised by Ms Pamille Berg. While acknowledging the effort to maintain the
building, Ms Berg commented:
I have heard that over the period of, say, the last 13 years
there has been a roughly 30 per cent drop in the money which is available to
maintain the building. When you then take inflation and the fact that the
maintenance requirements are inevitably rising because it is getting older—it
is not new anymore—that is a very significant impost.
The CPSU commented that many agencies, particularly smaller agencies
like DPS, have run out of 'efficiencies', and instead reduce services or cut staff
as they manage long-term cuts to budgets.
While DPS indicated that it has sought to minimise the effect of savings
measures on parliamentarians, the CPSU argued that continued savings measures
will have an effect on services as well as placing additional pressure on
A reduction in staffing levels, combined with an increased
workload is placing unreasonable pressure on staff, and will ultimately result
in a decreased quality of parliamentary services provided, or will lead to some
services no longer being provided at all.
Mr Leo Vukosa, CPSU staff representative, provided evidence on the
effect of savings measures on staff, particularly staff turnover. Mr Vukosa commented:
I am finding at the moment that the staff turnover is
directly related to the efficiency dividend and the extra pressures put on the
staff to perform greater services and produce greater outputs than before with
fewer resources. Where before these used to be more tolerance of people whose
work output was a little lower for a number of reasons than their colleague, these
days that tolerance is much lower because of the lesser number of staff to
perform those duties. They are asking a lot more of the staff for the same
amount of money that they were getting in other agencies, where there was less
pressure and less work.
These comments echoed those received by CPSU from its members in DPS and
pointed to concerns in many areas of the department:
Professional development opportunities refused for attendance
at relevant industry exhibitions and conferences. Staff who have left not being
replaced. Ongoing positions being converted to non-ongoing.
Due to funding constraints, partly related to the efficiency
dividend, Hansard's quality control and travel procedures have been
Hansard is no longer checked adequately.
Full-time staff have been cut and Hansard officers can rarely
attend interstate committee hearings.
Further reluctance to provide training.
Effect on recruitment. Almost all of the Research Branch
budget is spent on staff.
Staffing is the only area where savings can be made to meet
the efficiency dividend.
The freeze on recruitment means that significant expertise
and knowledge is lost when staff leave and/or retire. It means that resources
are spread thinly and staff are doing more with less. It also means that DPS is
exposed to significant gaps in knowledge as there is no capacity for succession
Less money in budget = less guides, but the number of school
visits and public numbers is constant if not increasing.
Concerns about the effect of the efficiency dividend on small agencies are
not new. In 2008, the Joint Committee of Public Accounts and Audit (JCPAA)
undertook an inquiry into the effect of the efficiency dividend on smaller public
sector agencies. It noted, in relation to the parliamentary departments, that
the Department of the House of Representatives and DPS advised the JCPAA that
they would soon consider service cuts if current budgetary circumstances
continue. Both departments reported budget decreases in real terms since
2000–01: 11 per cent and 19 per cent respectively.
DPS's submission to the JCPAA stated that the department had little room
for further efficiencies:
Put simply, costs have been growing at a rate greater than
revenues since the formation of the DPS in 2004. To date, persistent cost
cutting has kept expenditure in line, or slightly below available revenue. It
is unlikely that further early gains are available without dramatic
re-engineering given that DPS has already identified a range of efficiencies from
the CIR process, all of which will have been implemented by the end of 2008...
There is a real possibility that any future savings measures
or funding future pay increases will only be achieved by cutting employee
numbers and/or activities, including services to Senators and
The Joint Standing Committee on the Parliamentary Library also provided
a submission to the JCPAA and stated that the cumulative effect of the
efficiency dividend and rising costs means that senators and members are able
to access fewer resources each year. It reported that 'without further funding
for the collection, Senators and Members will not be able to fully and
effectively respond to issues in the Parliament'.
The JCPAA recommended that the Government establish a parliamentary
commission to recommend funding levels for the parliamentary departments in
each Budget, a practice common in other Westminster countries.
In its response to the report, the Government noted the JCPAA's recommendation
The Government considers it appropriate that decisions on the
future funding for the parliamentary departments continue to be subject to the
usual budgetary processes in which proposals for additional funding are
considered against other competing priorities.
The Speaker of the House of Representatives and the President
of the Senate are, of course, still able to put forward funding proposals in
accordance with the budgetary rules and processes in place at the time. It is
open to the Speaker and President to make arrangements to increase the input by
elected representatives into such proposals as they see fit.
Mr Andrew Podger's submission to the committee's inquiry summarised key
concerns raised in his submission to the JCPAA inquiry:
We highlighted the combined impact of the dividend and the
process for (partial only) price adjustment of departmental expenses,
concluding that its assumption of productivity gains of around 3 per cent a
year, year on year, was not realistic. The arrangements have no economic logic
to them. A more appropriate way of promoting efficiency would be to withdraw
the dividend entirely and use the CPI, an output‐based
indicator reflecting national productivity gains, to adjust departmental
expenses. We noted the current arrangements are particularly problematic for
small agencies, such as the Parliamentary departments, and inevitably lead to
cuts in activities and not just improved efficiency. There is also the risk of
certain public service agencies 'gaming' new policy proposals to compensate for
the impact of the current arrangements.
Mr Podger also commented on the Government's response to the JCPAA
recommendations and while stating that he would 'have no objection to
occasional across‐the‐board cuts in
departmental expenses to force re‐prioritisation
of activities, so long as the political leaders (ministers or, for the Parliamentary
Service, the Presiding Officers) took responsibility for the activities
curtailed and did not hide behind spurious claims of "efficiency"'.
Mr Podger concluded:
I would be surprised if the current arrangements have not
caused some diminution of service levels and quality provided by the
Funding of DPS
The matter of funding models for DPS was raised by the President in a
letter to the committee at the commencement of the inquiry. The President indicated
that both he and the Speaker were of the view that 'it is now time to consider
other funding models for DPS, possibly related to levels of Parliamentary
activity in each financial year'.
DPS also expressed its preference for a funding model which allowed for
fluctuating parliamentary workload, as proposed to the JCPAA in 2008. In
addition, DPS commented that the model should:
- recognise the growing demand for IT services;
- offer some choice to senators and members about the IT equipment
they use; and
allow for adequate long-term maintenance and preservation of the
assets of the Parliament.
DPS saw the advantages of this funding model as providing a base payment
component which assumes a 'quiet' sitting year with extra payments for
increasing levels of chamber and committee activity. This model would allow DPS
to respond to peak demands in busy parliamentary years; establish rigorous
service standards for key services such as IT; and ensure effective asset
The committee notes the comments of Dr Rosemary Laing, Clerk of the
Senate, at the October 2012 Supplementary Estimates in relation to the setting
of parliamentary budgets. Dr Laing pointed to the Latimer House principles, endorsed
by all member nations of the Commonwealth, which 'comprise a set of guidelines
about the relationship between the arms of government—parliament, executive and
judiciary—and how that relationship is best cast in terms of practical working
models'. Dr Laing went on to state:
Those principles include a best practice guideline that
houses of parliament should have the autonomy to set their budgets using an
all-party committee to determine and administer a budget of the house without
amendment by the executive. That is a Commonwealth-wide best practice model.
Dr Laing, in the Clerk's review for the department's 2011–12 Annual
Report, also commented that 'experience in other jurisdictions where parliaments
have a greater degree of autonomy in setting their budgets shows that the
function is undertaken responsibly and having regard to prevailing financial
and economic circumstances'.
The underlying premise of the amalgamation of the three parliamentary service
departments in 2004 was that significant savings would be made. While some
savings and efficiencies have been achieved, the committee considers that these
are much less than initially anticipated. In addition, during the time that the
amalgamation was taking place, the costs for additional security measures had
to be funded from existing resources. Senators commented during the 2003–04
Budget Estimates hearings, and in the Senate, that the parliamentary
departments were virtually singled out in being required to fund increased
security measures from savings.
In the years since the amalgamation, DPS has continued to experience a
decline in purchasing power and increasing costs for staff, resources and
contracted services. DPS indicated that over the eight year period to 2011–12,
its operating budget increased by less than 1 per cent, even though CPI
increased by around 25 per cent. While this is a significant issue, it has been
difficult to gain a comprehensive picture of the effect of changes to the DPS
budget through estimates processes and a less than informative annual report. The
committee considers improved information on the financial performance of DPS is
required so that the Parliament can be fully informed of the changes in DPS's
budget position. (The committee has made further comments about annual
reporting in chapter 9.)
The committee is concerned that further decreases in the DPS budget will
have a detrimental impact on the maintenance of the building and on the
services that support the parliamentary process. However, having said that, the
committee is mindful of poor management of resources in the past which have
resulted in increased costs, both in the short and long-term. In addition, it
appears that DPS may not have been as effective as it could have been in
ensuring adequate funding for new projects, other than security projects, and
for putting a case to Government that managing the heritage aspects of
Parliament House may require additional funding.
The requirement to seek funding from Government for funding the Parliament,
in the committee's view is a matter which requires further consideration. There
is a need to ensure that the budget for DPS is such that services required by
the Parliament are sustainable in the long term and the committee considers
that it is time for further deliberations on the appropriate model of funding for
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