The Australian Public Service (APS) is a diverse career-based workforce, and its capacity to efficiently and effectively deliver key services relies upon it being staffed by highly skilled and knowledgeable workers.
The committee acknowledges the challenges caused by the COVID-19 pandemic, and recognises and commends the huge amount of work performed by the APS, and its extended workforce of labour contractors and consultants, to cater to surging demand for vital services and payments, and to implement new government initiatives with short delivery timeframes.
The Australian Government has enormous influence as a major employer and through its massive procurement expenditure, to improve the quality and security of jobs across the country.
The various sections of this chapter highlight the key issues raised during the inquiry regarding the APS workforce, the utilisation of labour contractors and consultants, and the Commonwealth's broader procurement policy. These topics were discussed in detail across Chapters 11, 12, 13, and 14, and the following discussion provides the committee's views on these issues and associated recommendations for reform.
Reducing the prevalence of non-ongoing workers and casual arrangements
Evidence provided to the committee during the inquiry indicated that the number of non-ongoing employees is currently the highest it has ever been over the last two decades. The committee notes that as at 30 June 2020 there were 18 373 non-ongoing employees, representing over 12 per cent of the APS workforce, with the majority of these being employed casually.
Although it was submitted that the majority of this increase occurred as a result of the Government's response to the Black Summer bushfires and the commencement of the COVID-19 pandemic, the committee is concerned about the extent of these insecure arrangements and the substantial periods of time people can be engaged under them. For example, evidence provided by the Community and Public Sector Union (CPSU) indicated that a number of casual workers within the Australian Tax Office (ATO)'s workforce at its regional Albury worksite had been employed for nine years or longer.
The committee believes that these arrangements can have a significant number of negative impacts. As highlighted in Chapter 12, these relate to:
inferior rights and entitlements;
irregular and unpredictable working hours;
a lack of entitlement to various forms of leave; and
uncertainty around the right to request flexible working arrangements and unpaid parental leave.
Importantly, the insecure and precarious nature of these arrangements may disproportionately disadvantage women and impact on the ability of these workers to plan for their future and obtain home loans. The committee also notes that many casual workers are also employed at the lowest APS levels.
The committee would like to especially highlight the significant number of casuals at the ATO. Evidence indicated that over 2300 members of the ATO's workforce are currently engaged under casual arrangements. Notwithstanding the ATO's submission that these individuals are engaged to perform duties that are 'irregular or intermittent', the committee believes that some of these individuals undertake ongoing, stable work on a long-term basis.
The committee acknowledges that there needs to be the ability to surge workforces to support seasonal peak workloads and when there is a crisis; however, the committee believes this should only be utilised when necessary to perform work which is genuinely irregular and intermittent and not as a permanent arrangement for stable ongoing work. Given this, the committee is convinced that the Australian Government should provide permanent employment opportunities to all long-term casual employees performing ongoing stable work, and that it should eliminate the ongoing utilisation of long-term casual arrangements for these types of roles across the Australian Public Service, unless genuinely preferred by the employee.
The committee recommends that the Australian Government offers permanent employment opportunities to all long-term casual employees currently performing roles which relate to ongoing stable work.
The committee recommends that the Australian Government eliminates the utilisation of long-term casual employment across the Australian Public Service for roles which are not irregular or intermittent in nature, unless genuinely preferred by the employee.
Addressing the extensive use of labour contractors and consultants
As discussed in detail in Chapter 11, the utilisation of labour contractors and consultants has increased markedly in recent years. For example, a sample of over 20 public service agencies suggested that expenditure on contractors has more than doubled between 2012–13 and 2016–17, and the CPSU indicated that there are as many as 20 000 labour hire workers engaged across the APS.
A key concern raised by inquiry participants about the increase in the use of labour hire firms and consultants is that they are being utilised to undertake core public sector work, and not just to address seasonal fluctuations or surging service demand due to unpredictable events such as pandemics and natural disasters. It was argued that this increasing dependency on external workers has significantly reduced the capability of the core APS workforce. It was also contended that engaging workers through these arrangements costs more per worker than direct employment and, hence, results in the unnecessary expenditure of public monies.
The committee notes that this issue was also raised by contributors to the Independent Review of the APS, with that review submitting in its final report that the increased utilisation of labour contractors and consultants was one of the key reasons for the decline in capability across the APS.
It was suggested that a key driver of this trend was the imposition of an average staffing level (ASL) cap by the Government. The committee notes that a number of departmental representatives also conceded that this may have contributed to the growth in labour hire recent years, and that it has caused staffing challenges.
Through the inquiry, a number of suggestions were made to address these challenges and reduce the APS's reliance on external workers. For example, these included:
abolishing the efficiency dividend and increasing the number of permanent public sector staff;
identifying work that is currently outsourced but could be internalised;
identifying skill gaps that have led to the regular use of consultants and contractors, and developing plans to address these gaps;
mandating the transfer of skills between external workers and internal workers; and
capping expenditure on consultant and contractors, and utilising the savings to build APS capabilities and capacities.
The committee is very concerned about the rapid increase in the utilisation of labour contractors and consultants by the Government, and its ongoing reliance on an external workforce to deliver key public services to the Australian community. The committee believes these types of arrangements are precarious and insecure by nature, and that workers engaged under them commonly enjoy lower conditions, less training, and reduced career progression opportunities and certainty.
Given these deficiencies, the committee strongly supports reforms which will return these roles to the core APS workforce and enhance its internal capabilities. The committee believes that such an approach would promote the career-based nature of the public service and improve community trust in government policy development and service delivery.
The committee recommends that the Australian Government:
removes the average staffing level cap;
identifies skill gaps that have led to the regular engagement of external workers, and develops plans to eliminate these gaps and build in-house capabilities;
internalises work of an ongoing and regular nature which is currently undertaken by contractors and consultants, including labour hire;
encourages the transfer of skills and knowledge from external workers to internal Australian Public Service employees; and
places an upper limit on the expenditure on consultants and contractors, and utilises savings to increase the capability and capacity of the Australian Public Service.
The committee recommends that the Australian Government introduces an APS-wide policy requiring all departments, agencies and Government Business Enterprises (GBEs) to directly employ staff in all circumstances other than where the work is genuinely short-term and not ongoing in nature. Where this exception is used, the department, agency or GBE should be required to identify the duration of the engagement, and the approximate additional cost that will be incurred by engaging a third party provider.
Availability of government data
A key problem which became evident during the inquiry was the lack of a person or entity tasked with collecting whole-of-government data. Evidence provided by the Australian Public Service Commission (APSC) indicated that its remit generally only extended to employees engaged under the Public Services Act 1999, and the Department of Finance confirmed that it does not collect or maintain such a dataset.
The committee believes that this situation is completely unacceptable, and is persuaded by the strong arguments for the immediate collection and publication of such information. The committee believes that this lack of transparency undermines public trust in the government, and represents poor corporate governance and a lack of accountability in the use of public monies.
A number of suggestions were made to address this issue:
Require the APSC to collect and publish agency and service-wide data on the utilisation of contractors, consultants and labour hire.
Require the Department of Finance to regularly collect and publish data on service-wide expenditure on contractors, consultants, and labour hire.
Require labour-hire providers to disclose disaggregated pay rates and conditions.
The committee endorses these suggestions and believes that their implementation would materially improve the visibility and transparency of the Government's use of labour contractors and consultants across the APS.
The committee recommends that the Australian Government requires:
the Australian Public Service Commission to collect and publish agency and service-wide data on the Government's utilisation of contractors, consultants, and labour hire workers;
the Department of Finance to regularly collect and publish service-wide expenditure data on contractors, consultants, and labour hire workers, including the cost differential between direct employment and external employment; and
labour-hire firms to disclose disaggregated pay rates and employee conditions.
The Australian Maritime Safety Authority and AMSA Connect
As highlighted in Chapter 12, AMSA Connect is the customer service call centre located within the Australian Maritime Safety Authority (AMSA). It currently provides advisory and administrative functions across four teams, and evidence provided to the committee during the inquiry indicated that a significant number of its team members are employed via insecure labour hire arrangements.
The committee is concerned about reports indicating that there is high staff turnover within the team due to significant workloads; a lack of employment conditions and career progression; and general job insecurity. Further, the committee highlights evidence that labour hire workers employed under these insecure arrangements do not receive a variety of benefits, such as sick leave, carers leave, and domestic violence leave.
The risks involved in relying on labour hire workers were highlighted during the inquiry. For example, it was submitted that this approach resulted in the ongoing training of new staff, which reduces the capacity of teams to take calls and provide critical information in a timely manner. Further, it was noted that these arrangements can create knowledge gaps within the organisation, as people who have been trained, and have gained significant experience and knowledge, leave due to a lack of internal progression opportunities.
The committee recognises the vital service that the team members of AMSA Connect provide to its clients on a daily basis, and acknowledges the significant levels of training and knowledge required for them to efficiently and effectively perform their role. The committee believes that the constant turnover is not in the best interests of AMSA, its workers, or the community.
In its evidence to the inquiry, AMSA contended that it is currently waiting on the Australian Government to determine the funding model for the national system for domestic commercial vessel safety before it finalises its staffing model.
The committee acknowledges that the transition time has been longer than expected; however, this does not justify exposing the community to ongoing heightened risks and putting undue stress on those team members providing vital services to ensure the safety of vessels and seafarers.
Given this, the committee suggests that the Australian Government expedites the finalisation of the regulatory and funding model for the national system for domestic commercial vessel safety, and that AMSA immediately provides permanent employment opportunities to all long-term labour hire team members of AMSA Connect.
The committee recommends that the Australian Government finalises the regulatory and funding model for the national system for domestic commercial vessel safety. This will allow the Australian Maritime Safety Authority to determine its staffing model and offer enhanced job security to its workers.
The committee recommends that the Australian Maritime Safety Authority immediately offers permanent employment opportunities to all long‑term labour-hire workers within the AMSA Connect call centre.
The utilisation of procurement policy to achieve social and economic objectives
As highlighted in Chapter 12, it was strongly argued by numerous inquiry contributors that Commonwealth, state, and local governments have an important role to play in promoting social and economic objectives, such as job security, through their procurement policies.
The committee supports these arguments and believes that governments at all levels have a responsibility to ensure that procurements are assessed on their broader economic and social benefits; not just on their price tags. Further, the committee agrees with suggestions that the Australian Government should be leading the way in ensuring its procurement policies require businesses tendering for work to have a strong track record of compliance with workplace laws, and a demonstrated commitment to diversity targets and work security.
The committee commends the work of those jurisdictions, such as Victoria and the Australian Capital Territory, which have introduced procurement frameworks that support social and sustainability objectives, and which require a minimum standard of behaviour from suppliers when they undertake government-funded work.
The committee believes that contractors engaged by the Government should be obliged to provide full and transparent reporting of their adherence to minimum labour standards, and that they must disclose subcontracting relationships where relevant.
The committee recommends that the Australian Government enhances the Commonwealth Procurement Rules by introducing a social procurement framework. Such a framework would aim to leverage the significant procurement activities of the Government to achieve positive social, economic, and environmental outcomes for the benefit the Australian community.
The committee recommends that the Australian Government introduces a supplier code of conduct which would, amongst other things, provide minimum expectations around:
job security and the utilisation of local workforces;
occupational health and safety;
transparency, non-minimisation and non-avoidance of tax obligations.
The committee recommends that the Australian Government requires that entities engaged to deliver goods and services provide a demonstrable, and independently verified, track record of compliance with workplace laws, including Workplace Gender Equality Act reporting obligations. Such disclosures would also incorporate relevant subcontractors that these providers may utilise.
Procurement in the ICT sector
The committee acknowledges that the effective utilisation of digital technologies is essential to delivering government services in the 21st century. Its importance has become increasingly evident over the last two years, with the COVID-19 pandemic causing disruptions to face-to-face delivery channels and the migration of workers from their offices to their homes.
Given its increasing importance, the committee is concerned with evidence indicating that inadequate systems and tools are being provided to public servants to perform their jobs, and agencies and departments are not investing in the modern technologies required for efficient and effective service delivery. The committee believes the Government must rapidly increase the digital literacy of the APS to ensure that it becomes a digital leader.
The committee is concerned that there are technical capability gaps in the APS resulting from the over-reliance on contractors, and highlights the 2017 ICT Procurement Taskforce's conclusion that these gaps have resulted from an over-reliance on the utilisation of these external arrangements.
The committee notes that a number of reforms to reverse these trends, and to improve the digital literacy of the APS, were suggested during the inquiry. These included:
a genuine commitment by the Government to ongoing investment in ICT systems, staff skills, and funded workforce plans;
ensuring that ICT systems are at the standard of leading private sector companies;
returning externally contracted work to the APS, and building the expertise and knowledge of APS staff required to develop and deliver ICT solutions; and
making the APS an employer of choice for ICT and digital workers through career pathways, learning and development programs, and appropriate classifications and remuneration.
Although recognising that not all ICT can be done internally, the committee believes it is vital that the APS have internal capabilities, knowledge, and experience to manage, monitor, and deliver significant ICT procurements and systems across all delivery areas. Given this, the committee strongly agrees with the proposals above and suggests that the Australian Government act immediately to implement them and to reverse the current trend which has made it over‑reliant on external vendors.
The committee recommends that the Australian Government eliminates the technical capability gap resulting from an over‑reliance on the use of external contractors and ensures that the Australian Public Service (APS) becomes a digital leader. In doing so, the committee suggests the Government:
commits to ongoing investment in information and communication technology (ICT) systems, staff, and skills;
improves the standard of ICT systems to that of leading private sector companies;
builds the expertise and knowledge of the APS to develop and deliver ICT solutions; and
makes the APS an employer of choice for ICT and digital professionals by developing career pathways, learning and development programs, appropriate classifications, and competitive remuneration packages.
Procurement in the care sectors
The Commonwealth Government has a key role in ensuring that entities operating across the various care sectors, such as disability and aged care, meet service quality standards, and that their workers are employed securely with fair conditions and remuneration. This is especially important given that organisations within these sectors provide the vital services that are relied upon by some of the community's most vulnerable people.
The myriad care services available across Australia are generally highly valued within the community, and it is widely acknowledged that they make material differences to the health, wellbeing, and quality of life of their recipients. Given the importance of these services, the committee is very concerned that the Government has failed to provide a clear policy to adequately meet the growing demand, and that it has promoted insecure and precarious work arrangements through the 'Uberisation' of these sectors.
It is very clear to the committee that this approach is not in the best interests of care recipients or workers, and that it can have devastating impacts. Evidence provided during the inquiry showed that these arrangements are highly deficient for both parties.
The committee is also concerned about potential 'sham contracting' arrangements within the industry, and that some operators are exploiting marginalised workforces through lower wages and conditions. The committee believes that organisations should be required to show a demonstrable track record of satisfying employment and industrial relations requirements prior to their engagement, and that digital platform-sourced workers should not be utilised to provide care services to some of the Australia's most vulnerable people.
Proposals for reform to the Australian Government's procurement processes in the care sectors are outlined in Chapter 6 of this report.
Procurement and the National Broadband Network
As outlined in Chapter 14, NBN Co and its delivery partners utilise a subcontracting pyramid model to engage workers to service the National Broadband Network (NBN). The committee believes that this facilitates unsustainable employment arrangements for those at the bottom of the subcontracting chain, and is concerned that this materially impacts people who are already quite disadvantaged.
Further, the committee believes that it is especially unacceptable for unsustainable and unfair contracting arrangements to occur within a project that is funded and administered by the Australian Government.
Evidence indicated that there is pressure at every contracting level to make a profit and exert downward pressure on pricing and workforce conditions for smaller operators and individuals. As a consequence, the NBN is serviced and maintained largely by individuals who struggle to maintain financial viability and must work long and sometimes unpaid hours in order to survive.
The committee is concerned that this approach, coupled with a diluted chain of responsibility that can be deliberately used to hide non-compliance, has also facilitated and promoted the proliferation of malpractice throughout the contracting chain. The committee is particularly troubled by reports of corrupt and illegal engagement practices that may be occurring within the industry, and believes these allegations should be thoroughly investigated by appropriate law enforcement agencies.
The committee acknowledges the legitimate use of some subcontracting arrangements; however, the committee cannot ignore compelling evidence from field technicians which highlighted the detrimental impacts that they can have on individual workers and their families. Given this, the committee believes that NBN Co, as the economic employer, and its direct delivery partners, should have greater oversight and responsibility for all workers they engage—directly and indirectly.
NBN Co contended that responsibility for the subcontracting arrangements lay with the delivery partner and relevant subcontractor; however, this was not reflected in the evidence received from the delivery partners. It was strongly suggested that these firms have minimal oversight of employment conditions and payments down the subcontracting chain.
The committee has been unable to determine whether strong assurance systems are in place to ensure that subcontracting arrangements are fair and effective—a vital requirement on a project of this scale. In light of this, the committee is of the strong opinion that the less removed contracted workers are from the engaging business, the greater the ability of that business to monitor the conditions and payments of the workers, and ensure they are being properly treated. For these reasons, the committee sees benefit in limiting the number of levels of contracting, and promoting direct employment by head contractors as the preferred model of workforce engagement.
The committee recommends that the Australian Government amends the NBN Co Ministerial Statement of Expectations to explicitly state that NBN Co is responsible for conditions of work, exploitation and corruption that occurs in its supply chain, including for subcontractors engaged by Delivery Partners or Prime Contractors. NBN Co should be directed to prepare and publish a plan for how NBN Co will safeguard, monitor and enforce sustainable rates of pay and fair working conditions for NBN technicians.
The committee also recommends that the number of vertical subcontracting arrangements be limited to enhance transparency and accountability, to reduce the inefficient outlay of taxpayer funds and wage suppression that result when too many layers of subcontracting are in the delivery chain, and to promote secure ongoing direct employment by Delivery Partners as the preferred model of workforce engagement.
Senator Tony Sheldon