Senate Finance and Public Administration Legislation Committee, , 5:50:52 to 6:45:31
The APSC defends the Strategic Commissioning Framework and discusses efforts to reduce reliance on external labor and consultants.
Topics: Public service staffing, Procurement
Speakers: Dr Subho Banerjee, Senator The Hon Katy Gallagher, Senator The Hon Jane Hume, Senator Barbara Pocock, Jacqui Curtis, Ashley Sedgwick, Dr Daniel Tracey, Interjection, Senator Karen Grogan
>> Thank you, Chair. Um I want to return to the document that I sought to have tabled just before lunch um and uh go to um Mr. O'Neil's information which says on the 1st of uh October 2026, the APSC advised me that is Mr. O'Neil that no formal code of conduct this is uh thank you for being back at the table miss Dr. Tracey uh no formal code of conduct action would be undertaken and that quote management actions were appropriate to address the issues raised in the complaint. What management actions are these?
>> Um sorry Senator I'll just get myself set up. Um, I I think the nature of that question goes back to issues we were canvasing before the break, which is that it starts to speak to the specific nature of concerns raised by a complainant and specific decisions being taken by a delegate of the commissioner in individual matters. This falls broadly within the same category of the information we were touching on beforehand, which is that given the confidential nature of these issues, it's not a level of detail we would typically wait into. um particularly where processes are on foot I must say as well or sort of are still being um implemented is that um it's not the commission's practice to speak about ongoing matters when they're of this sort of sensitive nature.
>> Uh Dr. Tracey, are you saying that there are management actions underway at present as arising from this complaint?
>> No. So sorry to to clarify my evidence, Senator, is that um what I don't have in front of me right now is confirmation that all steps flowing from the delegates decision have been implemented. So what I am mindful of not doing is preempting any further action that might need to be taken. I just don't have confirmation right in front of me today that there's nothing outstanding from the process that's been
run by the commission. So on notice, could you provide uh the committee with uh detail about the management actions that have been completed uh and any further information you can about the nature of those actions and their intentions and so on the detail of them is what I'm seeking.
>> I can take that question on Senator.
>> Thank you. And and what I'm trying to find out here, Dr. Tracey is um to to test the confidence uh that we can have that uh doc um uh Michael O'Neal's complaint has been dealt with in a robust appropriate way with integrity. That's where I'm going with this. And the matter is not trivial. It's not a simple complaint by someone who believes they've been bullied. This is someone who is held an important part a leadership position in a regulatory body and his argument his allegation is that he was interfered with in the execution of his duties as an appointed regulator. Uh and so it's a very serious complaint that he is bringing to our attention. So what I'm looking for is conf how do I have confidence that this complaint has been dealt with with integrity as you have said uh Miss Curtis is a priority of yours. So I am asking you on notice to give me what general information without naming individuals you can about the nature of the investigation that was undertaken here. For example, how many people were interviewed? What what was the nature of documents that were examined? Uh what evidence [snorts] has been relied on in considering this matter? and uh on notice I'd like to exposing them to any unfair risk. But I think that this the parliament uh given the interest it has shown in these matters for three years more than three years now and the many hours that have been spent into trying to pursue and ensure that going forward our institutions like the TPP the tax office treasury uh are um equipped and able to learn the lessons of our history to to deal with matters like this. Clearly they are not alone matters single we have a a matter of foot now with KPMG that's also very significant. So I'm seeking on notice a f wholesome description of that investigation.
>> So Senator, thank you for um understanding where we are standing on this position. That's really um helpful. We will take that on notice. I did just want to provide a bit more of reassurance around this. the fact that it was referred by the tax commissioner to the commission and then the commission has actually um ensured that there was an investigation to look at those matters should be of some comfort to you that that has actually been a foolsome inquiry. we will take on notice to provide you with whatever we can uh without jeopardizing any further inquiries or prejudicing any further processes or impacting on people that are named in that document.
>> I want to assure you uh Miss Curtis, I have no interest in pursuing someone and I think the Senate has shown itself no interest in pursuing people uh individually. What we want to have is systemic analysis of what has gone arry where it has and how to remedy it. So is the APS seek satisfied that it has fulfilled its duty in relation to the investigation and the outcomes resulting from it in relation to Mr. O'Neil's allegations.
>> Well, Senator, as I said before, I have had to conflict myself out of actually managing this particular process. However, I do have confidence that the process that was followed by the commission uh before I became commissioner and before actually Dr. Tracey was there was totally appropriate and was handled to the best uh that we could um considering the complexity of the issues and that the person that it was delegated to to look at these issues was somebody of significant um experience in these matters and that that would have been dealt with thoroughly and to a standard that you would expect yourself. Senator,
>> thank you for that and I look forward to uh to that uh answer on notice. Um I will go to uh the strategic commissioning framework if I may. Um, just before I do, can I clarify once again without any individual names being used, if you receive at the APSC a complaint of bullying or uh adverse action uh and it comes to you from a person in an agency, does the APSC have the capability to pursue that and investigate an a complaint like that?
So, Senator, um I would say yes, we definitely have the capability to do that, but we have to actually have matters that are below the agency head level or secretary level referred to us. And even then, uh unless it is a particularly sensitive or complex case that's referred, we don't necessarily have the jurisdiction to actually look at that. We would take those types of ones on a case-byase basis, which is exactly why Mr. O'Neil's case was referred to the commission and that they did undertake to conduct an inquiry into that matter.
>> Could you provide on notice the definitions which help you guide you about where to pull things into the APS-C and where to leave them at agency level?
>> Yes.
>> And similarly, um Dr. Tracey, you in your earlier answers before lunch spoke about um legal obligations you have in relation to investigations. Could you provide on notice the nature of the restrictions that exist in relation to your investigations because you suggested uh that you have obligations which prevent you coming to the Senate and revealing to us answers to some of the questions I've posed or might be posed. Can you give me a wholesome on notice description about what what what those uh what the nature of those uh legal uh restrictions might be?
>> We certainly can Senator it may just be worth now though just clarifying. So, um, my evidence earlier, if it if it implied so, um, that was inadvertent, and I, um, would just need to correct the record. Now, my evidence earlier wasn't to the effect that our legal obligations prevent, um, discussion about these issues in the context of a Senate committee hearing. Um what we are typically bound by when we conduct inquiries into any of the commissioner's statutory inquiry functions is the handling of information is regulated by section 72 capital A in the public service act which speaks to the handling of protected information. So that's a defined term under the public service act. Um in the broad section 72A is a general non-disclosure provision that applies to the commissioner her delegates and anyone supporting an inquiry and effectively provides for uh criminal penalties to attach to the disclosure of any such information um unless certain public interest tests can be met. So there there is a a narrow sort of pathway I suppose for the disclosure of some information. um that needs to be a proactive decision by a delegate of the commissioner, but that provision otherwise um heavily restricts uh in order to preserve the integrity of these processes uh restricts the broader disclosure of that information.
>> So I'm looking for that information in writing to me if possible and I certainly believe uh and I believe the Senate's investment of the parliament's investment of resources in recent years attests to the public interest uh argument that exists around the matters that I'm raising. Thank you. Um, so if I open a new front, have I got time?
>> Uh, we might rotate. We're kind of sitting on sort of 10-minute blocks. >> We'll go back to Senator Hume.
>> Thank you. Thank you, chair. I just want to go back to that line of questioning before that we were talking about process of uh terminating a secretary. So far, and be I don't want to put words in your mouth, but I want to be very clear where we are. We've established that when a departmental secretary is terminated, the secretary of pecy must consult with the APS commissioner. Uh that the manner of that consultation isn't prescribed. Uh but that as part of good APS standards of recordkeeping that advice would in normal circumstances be in writing. Am I safe to say that on the I'm getting nods or at least >> no objections.
>> So Sha Badi, deputy commissioner, head of APS Academy and capability. So just to clarify what had been talked about in your previous line of questioning, um Dr. Tracey read out the relevant section of the public service act. Yes. >> Which talked about a report that is a report by the secretary of the department of prime minister and cabinet. Y >> that is in general a written report. Yes. And then there is a consultation with the Australian public service commissioner. >> Right? >> The nature of that consultation might vary and that was the the conversation that was happening before but the underlying report is a written report which is a matter for the department of the prime minister and cabinet.
>> Right. Okay. Good. Thank you. That
only time that the commissioner provides the equivalent report necessarily in writing would be if it was the appointment or termination of the secretary of PMNC.
>> Right. Okay. We're not there yet. >> No. >> So don't put the wind up you. Sorry. That is a joke. I promise it doesn't. Sometimes these things don't transcribe well. Um uh I do want to ask though uh in these circumstances with M James whether the consultation uh obviously the consultation from the secretary of prime minister and cabinet to the commissioner was in writing whether the whe that was the report was in writing whether the consultation back in their circumstances was in writing or
checked while um further lines of questioning were taking place uh if we have any record that we can access uh the people that are actually here today and we can't find anything at the moment. So, we will have to take that on notice.
>> Okay. So, you can't tell me a whether there was verbal consultation or written consultation. If there was written consultation, you can provide that document.
>> Well, we're going to [clears throat] try to find if there is a written document. I can assure you there would have been consultation because that's one of the obligations.
>> It's legally required.
>> Yes, exactly. Um we've also we're also talking to PMC to see if we can find a date for you, Senator. Okay. >> But otherwise, we will have to take it on notice.
>> So if there were written comments or advice that was that was given to the secretary, prime minister and cabinet, I would like you to take on notice to provide that document if you could like to know whether the commissioner at the time supported the termination, raised concerns, or recommended any alternative such as performance management.
>> We'll have to take that on notice as well. Senator,
>> I'd also like to know if the commissioner or the um commission itself received information about what the basis of the termination was. I'm assuming that that was in report that was in the report from the secretary but I don't know. So I want to make sure that um if that is unclear that that is made clear whether it was an adverse event or whether it was a loss of confidence what the reason for the termination was um and whether there was any evidence to support the reason for that termination if it related to an adverse event or related to performance.
So we will um consult with our PMC colleagues and see what we can provide.
>> Take that on notice as well. Thank you. Uh on uh in February at estimates, Minister Watt said that uh and I'm quoting him here, he wasn't in the conversation that seems to have occurred between representatives of prime minister and cabinet or the public service commission and Miss James. So I would also like to know if the APSC have had any contact directly with Miss James in the process of her termination.
Yes, thank you for that question. I I don't know about the termination part of that question. I do know that the APSC has been in contact with Miss James uh regarding the development of the anti-semitism foundation module. So there have been conversations there but not uh I have no knowledge of what happened regarding her termination.
>> Right. Okay. Um I would like to understand on what dates if any the APSC had contact with Miss James regarding her termination and who in that process was involved in those communications. Was it just the commissioner or was it other people within the APSC? Uh, I'd also like to understand um as part of the brief that was provided to the prime minister recommending Miss James' termination from the Secretary of the Department of Prime Minister and Cabinet uh whether Miss James was given the opportunity to make any comments before a decision was taken around her termination. I would imagine that that would be an important part of a termination process and that would be something that the APSC would have some say in. Is that right?
>> Well, we'll have to check what happened, Senator, and we will answer that on notice.
>> Okay. As a matter of process, I would imagine that the APSC would seek to ensure that due process was followed, that every opportunity for Miss James to comment before a decision was taken or any department secretary, I'd rather let's put Miss James aside, that there was a chance for the departmental secretary that was being terminated to respond. In normal circumstances, would that be something that the APSC would lean into?
>> Well, Senator, um, when you're terminating anybody's employment, you would hope that there were conversations that take place around the reasons for that termination. So, we will definitely look at what happened in these circumstances and we will provide you with information that we are able to do on notice.
>> Thank you. Um, I'm also interested in noting on notice if the APSC or the former commissioner uh received a copy of Miss James' response, if there was one. So, um, if that could be tabled, I would like that as well. Um there are now two secretaries that have been terminated under this section section 59 uh just in the last oh gosh year and a half since September 2025 year. Um Mr. Fennessy obviously is the secretary of department of agriculture fisheries and forestry and miss James a secretary of um of of dur. reported that their terminations led to payouts at a combined cost of about u oh gosh one was nearly $900,000 and the other one was over $900,000 respectful respectively that's 1.8 8 million is almost a line item in itself, isn't it? uh is uh is the government in the process of terminating any other
>> It's not a matter for for me and my role as Minister of Public Service.
>> But you're not aware of anyone else that is being terminated. That's very large.
>> It doesn't fall under my portfolio responsibilities that question. Well,
um, considering the budget bottom line does fall under your portfolio responsibilities, $1.8 million to terminate two people is an awful lot of money. Is that not something that
>> These are not matters that relate to my portfolio responsibilities that I I'm here to answer and I'm sure there's other forums in which those decisions have been pursued.
>> Okay. I'm sure there are a lot of other forums where they will continue to be
we'll go back to Senator PCO.
>> Thank you. Um, I wanted to go to the ANAO audit of the strategic commissioning framework. Um, I have some questions about the way the framework works. Uh, first one, um, My first question is what are the differences in the roles and responsibilities of the APSC compared to uh the department of finance uh on the strategic commissioning framework.
>> Thanks Senator. Um so the the main difference between well firstly I'd say that we work very closely with our colleagues at the department of finance uh because many of these matters do traverse the responsibilities of the APS-C and the department of finance. That's because uh in the strategic commissioning framework we were looking at aspects of external um external contractors and consultants in different ways and that external spend issue is uh is a vital interest of the department of finance and they have responsibility for a range of reporting and other measures in that space. In terms of the strategic commissioning framework itself, the APS-C was the lead agency for the strategic commissioning framework which looked specifically at this issue of core work. So because it was looking specifically at the issue of core work, it was looking at matters that particularly pertain to integrity and capability of core government functions that was seen as an APS-C responsibility. uh and so that's why it sat with us directly aspects that went to uh expenditure uh external expenditure are are primarily a matter for the department of finance now as I say we work very closely with them so when we were looking at the reporting when we were looking at the implementation of the framework and throughout the framework we've worked closely with finance >> but the primary distinction is that we're responsible the APC is responsible for the strategic commissioning framework the department of finance is responsible for the broader policies around external spend and the broader accounting standards in government, how they are reported and how that is put together as well as the uh a number of other measures that go to reducing the external spend. They're all matters for the department of finance.
>> So, was the APSC uh critical then in designing and developing the framework as well as implementing it?
>> Yes, Senator.
>> Mhm. Okay. The ANO found that agencies could meet targets for reducing reliance on external labor while increasing overall external workforce expenditure. Uh Minister, do you consider the framework to have been successful in meeting its central objectives given these very contradictory outcomes?
>> Uh yes I do and I disagree with the analysis by the ANAO. because the strategic commissioning framework was about a particular subset of work across the APS, the pieces of work that we don't want that we've been very clear should be done by public servants and it was to deal with a particular issue when we came to government core what we saw as core government uh public service work being outsourced essentially. So it was you know consultants sitting on management committees of departments, consultants writing cabinet submissions, things like that. So that was the problem we were trying to fix. It was not to uh to use the framework to cover every circumstance of public service work where external labor whether it's contractors, consultants or labor hire might be used. It was about a subset of work and I think the ANAO's view is that it has a broader you know what constitutes core public service work maybe they have a different view on that uh than what the strategic commissioning framework was originally intended uh to deal with and we've got two different things going on. We've got the strategic commissioning framework and then we've got another piece of work which is about looking at how we reduce expenditure on consultants and contractors and labor hire and I think if you look at the conversions from labor hire to public ser permanent public service jobs about 14,000 of those I think from memory um you can see that that's happening outside the strategic commissioning framework that's part of you know a broader piece of work but we've never said that the strategic commissioning framework would not mean or would result in departments not being able to use consultants or contractors. They're kind of two different things going on and I'm not sure that was the interpretation that the ANAO took.
>> Are you saying the strategic commissioning framework is not about reducing spending on external consultants labor?
>> Yes. Well, it is part of it, but it's not the only it's not the only thing. And we were, >> you know, I think if you go back and have a look at the strategic commissioning framework, um, and, um, sorry, I've got it here cuz I was looking at it earlier. um where we are clear there are core functions APS-wide core work developing cabinet submissions drafting legislation and regulation leading policy formulations roles that are on um an agency's executive team and then there were other core APS functions that should be brought back in house as a priority um noting that there may need some time to adjust because people might have been in longerterm arrangements but undertaking procurement, managing contracts, costbenefit analysis um and some of the uh work around grants. Um so I think we were pretty clear about what the strategic commissioning framework was intended for. Now the other thing I would say and because this has turned an assessment of whether agencies are doing the right thing or not for those that don't want to use that don't want to see a use of consultants or contractors in the public service is that the big uplift occurred in a relatively short period of time. So this issue about target setting and whether because you don't set a target now because you've insourced all that work and you've changed those arrangements it's it's hard to then set a target to do something you've already done and in that sense the strategic commissioning framework doesn't doesn't reflect that and so you know I'm giving some thinking and and I look at look at the ANAO report about you know how we deal with that challenge because I don't like for services Australia, they brought a lot of people in off labor hire before they had to report under the strategic commissioning framework. So they did the right thing because we'd asked them to insource jobs that had been outsourced, but then because they had done that the first reporting year, they looked like they weren't making a big effort because they'd already made the big effort and it wasn't captured. And so there are some issues there that I think we have to turn our mind to about how the strategic commissioning framework applies over the longer term. You know perhaps it you know the target setting and that should have been for a time limited period before you move into just accepting that these are the definition of APS core work and you're not to outsource it and that's just that's the
The ANO found that 12 of the 22 uh sampled entities increased their spending on external labor in 2024 25. What is this telling us about the effectiveness of the framework? They aren't all agencies that had a massive cut in the year or two beforehand. There really is a problem, is there not? That we aren't seeing a reduction in consultants and contractors that this is
I think this really goes to the scope question. So the ANO through through that report uh puzzlingly keep going back to the full spend on all of the consultant, contractor, outsource providers, e everything that is an external spend within that. They then say a small percentage and the the the rough approximation they use is about 3% is covered by the strategic commissioning framework. The strategic commissioning framework for what it was considered to do in the report itself is shown to be successful. The targets were met. We've discussed previously that uh the the targets uh came substantially from two agencies. Yeah. But there were a number of other agencies that also reported and for those other agencies they reported getting to about 82% of their target requirements as well. So while the bulk was in these two agencies, it was widespread. there was good faith engagement all the way across the the uh the fact that you just quoted back through your question which is the 12 of the 22 is on the basis again of the full external spend. There was never any suggestion there was never any implication that the strategic commissioning framework would cover the whole of the external spend and so the idea that it's gone up in 12 to the 22 is is a completely different matter. It's a different piece of work. And so when when the ANO looked specifically at the targets in the strategic commissioning framework itself, it found that those targets were met overall. It found that there was engagement across uh across all the entities that had been uh that were within scope and it found as the minister had said that there was actually substantial effort in the first two years to the point where a large number of agencies the majority of agencies got to a point where they no longer felt like they were outsourcing core work. Now in this definition of co core work as I said that's fundamentally an integrity question things that should have been done by public servants being done by public servants. >> It's a good thing that agencies have had a really serious look at that and that they've brought that in and they can now declare through their annual report that that has now been done. For that 3% that was 3% where there was integrity or capability questions of a very acute
nature. Isn't it the case that there were very diverse definitions of core work across agencies? That seemed I talked to the NAO about that yesterday.
Isn't that a problem? So, Senator, during the design, uh we set out and uh the minister's actually read out uh the the section in the framework document. We set out uh some functions that it seemed to be clear to us would be core work on an APS-wide basis such as uh drafting cabinet submissions such as the work in the executive board and other things like that. In the consultations, it was very clear to us that across the range of agencies that would be in scope and it's over a 100 agencies. How they would think about core work is inevitably very different in different types of agencies because it depends on the type of work that you're doing. So for example, there in those 100 agencies, there are some relatively small agencies. They might well do some quite technical work only occasionally to support a particular project or to support a budget bid or to support something like that. That piece of work for them might not be core compared to their other delivery responsibilities. But in an analytic or policy agency that similar piece of work might be core. So that sort of consideration of exactly what is core really does depend on the agency context. And so uh consistent with the devolved nature of the financial framework, accountable authorities are responsible for making sure that this is done in a responsible way. The reporting is through the annual reports and they need to assess against the framework that is very clear around the expectations that core work will be done in house.
>> Given the differences between your perception and the ANAO report, did you go back and forward to them to to negotiate and you and what changed? We
we we did Senator we we we we talked to them extensively uh through the process >> uh and uh in the in the report itself uh as is customary uh they have reproduced the letter that the APS-C also put to at the end of the process uh in that letter we make it clear again that we think that the scope uh was not the scope that was originally the policy intent. uh in the framework document itself it literally starts with core work needs to be done inhouse by APS employees that is a that is a position that we put consistently to the ANO of course it's the prerogative of the ANAO to publish a report in a form
>> and how does the APSC APSC plan to improve the framework looking ahead
>> well as as uh we said both in the report uh there are still things to improve prove in the in the framework and particularly in the implementation of the framework. One of the things that agencies had said to us consistently is that when we were thinking about core work because it was trying to get to this policy public admin concept of what are the things that have to be done inhouse, what what poses an integrity risk inhouse that's different to an accounting concept. So there wasn't a really natural fit from accounting systems or a natural form of reporting for that. So, we've been thinking really carefully about how to get the uh that information in a reliable and authoritative way, but in a way that doesn't put too much further reporting burden on agencies. And so, we're working with our Department of Finance colleagues on that. That's been raised with us over time, and we've got further work to do.
>> So, if we zoom out and reflect on change over time, $20 billion in external spending in the last year of the Morrison government, we're back to about that level now. What's this say about the effort of this government on this really important priority of rebuilding the public sector and reducing reliance on external contractors uh consultants and so on. I mean that's the bottom line here isn't it? Are we getting this down and the figures suggest to me that we are not.
>> Would I like to see more? Yes. Uh I would uh but we're also doing a lot more. Um so this is ongoing work for me. I mean we've got a much busier I think public service in a whole range of areas and if you look at some of those departments where you've seen an increase um spending on some consultants they are in those really technical areas. So I was looking at um uh DEU was one of them I think uh we'd seen a big increase in the use of consultants and contractors. not unusual I would think in the energy transition where you're getting specialist advice at at times um you know and some of the other areas where we are like we've got an enhanced um effort in the Pacific and in our local region so you can see DEFAT there has increased expenditure in the area so I mean what I what I'm trying to do is work out what is reasonable and what is you know is work that can be and should be done by the extra public servants that we've have employed across the APS. So it's just it's an ongoing piece of work. How the strategic commissioning framework sits within that and how we deal you know we will look at what this of course the ANAO report says and the views it has. Um but we also I'm not going to have a framework that sets unreal ex you know tests or or tests for agencies that are hard to meet. I'd prefer something that was just very clear on what is core public service work and can't be outsourced and then accountable authorities are responsible for the decisions they take outside of that.
>> We are going to need to rotate the call.
>> Okay. Go and I'll come back. Thank you.
>> We'll go to Senator H.
>> Thank you. I'm going to follow up on a couple of Senator PCO's questions though. um that issue around uh the ANAO finding that agencies are able to create their own definition of core work um and that there wasn't a consistent APS-wide definition. How many agencies that defined their own definition of core work then revised their definition uh between 24 25 and 25 and 26?
>> Thanks Senator. So it it was a matter for agencies in each of the years to look at what they uh what they thought was core work. So
>> do they do that prospectively or do they they do that retrospectively?
>> They do that prospectively. So so in the first two years they were uh those that had work uh that was covered by the SCF set a target and for that they had to specify on what basis they set that target. uh but the the overall accountability requirement remains that accountable authorities have to report back in you know through the established processes including through annual reports now through corporate plans as well. These are serious accountability requirements and uh the idea that they have to then test against a set of principles about what constitutes core work for themselves. I think that's a judgment that they need to make and we have absolutely no evidence that that is not a judgment that's being taken in good
>> Okay. Well then on notice can you provide me a list of agencies that revised their definition of core work between the years 2425 and 2526 and I'm also interested in knowing how many agencies have set no target number for insourcing in that 2526 year. Have
answer the first part of the question and I'll ask Miss Miss Cedric to help with the second part with the first one and perhaps I wasn't sufficiently clear Senator each year on a if we take an individual agency >> they had to think about what constituted core work.
>> Yeah but surely it's not going to change from year to year on a regular basis.
changes at the margin as they're thinking about exactly where the functions of the department are, what the what the work of the department is, what the prioritization is, but each year each agency did that exercise. >> So in in a sense the answer to your question, Senator, is that every agency that was covered thought about what constituted core work each year.
>> So they've changed their own definition of core work each and every year. Well,
it depends on what you mean by definition there, Senator, because they assessed against the same set of principles, but they looked at what constituted core work or not, and that is a requirement for accountable authorities to make sure that that is done in good faith in in the proper way in terms of public management. The the number of agencies that haven't set targets for this year.
>> Uh so, Senator Ashley Cedric, assistant commissioner, organizational and workforce capability. So we published an update um in around this time in 2025 setting out uh agency targets for the 2526 financial year. I think it was about 40 agencies that set a target. The bulk of the other agencies reported that they were operating in line with the framework and were not required to set a target. Um but I can we it's in the public update which agencies did and didn't set a target but we can table that information if it's helpful.
>> That would be helpful. My understanding is that basically all of the reported savings under the framework came from defense and the ATO. So how did defense and the ATO define their core work?
>> So
>> so senator uh we can look to to communicate with those two agencies to uh follow up as to how they have specified call work themselves. But as I said before uh there was significant well there was full engagement from all agencies that were in scope. The numbers were larger in two of the larger agencies. Uh partly uh recognizing the circumstances of those two agencies but overall uh all agencies that were in scope that had set targets agencies got to about 82% overall in terms of the achievement of those targets apart or excising those two large agencies.
>> Okay. So the two biggest agencies that make up the bulk of the claims of savings, you can't actually verify their claims. Is that right?
>> So Senator, as I've explained, I think the uh the decision about core work, the analysis of core work, the assessment of core work is an agency matter. So it was uh never intended that there would be some sort of central assessment uh of each and every uh agency and how they report it. Uh there was a set of principles uh inunciated. >> Agency heads are responsible for thinking about what constitutes core work against that and agencies uh to the best of our knowledge have done that in a responsible and good faith manner. We engaged very closely with agencies through the implementation process. There was very close interest and engagement in how to think about core work across the working group and as far as we are aware that is something that has been taken seriously all the way across the scope of the the framework.
>> Okay. Look, it may have been taken seriously, but to be honest, if um the ANAO has given a rather scathing report that clearly the framework is ineffectual and that the APSC has given ministerial approval to remove the formal reduction target targets and um and the public progress updates for 2627. Doesn't this essentially say that the work has ended?
So that's not our view uh senator. So the ANO report uh as was canvased in uh estimates last night uh gave its findings overall for the framework overall. They found that it was partly effective against that scope that we've been discussing now which is a scope that uh for some reason was considered across the total external spend rather than against the commissioning framework itself. In the commissioning framework itself, in the report itself, it makes the point that the targets have been met and exceeded and indeed in the report itself, it says that the APS-C was largely effective in the implementation of the framework. >> There was clearly there was clearly a further conversation about what the scope is. We've looked to draw that out through uh this conversation here today and more broadly as I've said to Senator PCO through the engagement with the ANAO. they have a ordered against a much much larger scope than the framework itself. As I as I mentioned to Senator PCO, the uh strategic commissioning framework targets came to about 3% of that total total spend. Now, if the audit uh scope is somehow the larger scope, then that's a sort of different matter. But when they have comments within the report itself about the framework, they're clear that the targets were met and that the implementation was largely effective.
>> Okay. So the report says better clarity on scope could have assisted the APSC in ensuring the framework would be effective at achieving all aspects of the policy intent. The APS-C scope for the framework was an unclearly defined and small part of all government external workforce spending as core work is not clearly established and consistently applied a consist a clearly established and consistently applied APS concept. The APS-C does not have an estimate of what core work represents across APS supply or external workforce expenditure. So the ANAO yesterday, just yesterday said our language of a partly effective conclusion is a negative conclusion. I think that that it itself is a um is um is is something of concern. Let me be very clear about what it is that I would like from you on notice and that is a list of agencies who refine who revised their definition of what core work is their core work is the 2024 and 25 26. You've said that that's all of them. If that is all of them that's fine. But I do want a list. I also want to understand exactly how many agencies set no target for insourcing in the 25 for um sorry 25 26 year. So I want a list of those and I'd also like an understanding of what the annual cost was of collecting, checking and publishing framework data since inception because there must be millions of taxpayer dollars that have been spent not achieving what this framework was supposed to achieve.
>> I I disagree. It has achieved what the framework set out to do.
So can I ask
>> agencies reach their targets. We've been clear about what core work is with the ability for agencies to you know add or revise based on their needs.
Well, I must have missed something then because my understanding is that your um the framework was designed to contribute to the successive budget measures that were collectively projected to um that collectively projected about 14 in fact I think it was 14.8 billion in external labor savings from 2022 23 to 202930. So the whole point of the framework was to save money by reducing consultants and external labor hires.
>> Oh, we just went through this with Senator PCO. No, it wasn't. It's a subset responding to the government that you served in that had consultants writing cabinet submissions, writing legislation, and sitting on management. >> They're still doing that. According to Senator, she reckons that there's still exactly the same amount of money that's
being spent on external
>> consult. That is a different point that she is making. That is a different point. There are not consultants sitting on management committees of agencies writing cabinet submissions or writing legislation. We have been very clear on that. So what this is the disagreement that I have around how the strategic commissioning framework is being interpreted. It was to establish a set of core work principles which agencies if they wanted to refine for their own operational reasons they could. It was never the avenue to deliver all of those savings. Never. Not once have I said that. And in fact, the target that was set in the first year were 527 million from >> memory. And I think we got close to uh 550. But the problem we're in now is that you know as you say defense atto um I think the NDIA all did the heavy lifting because they had a lot of outsourced core work. Services Australia also did but they did it before the strategic commissioning framework came in. Now we're in a position where the framework is being, you know, used as a way of saying you're not doing what you said you would do because the agency the the big areas of reform have happened. They've brought that work back in.
>> So the claim was a $14.8 billion saving from external labor. >> Yes. Is there any other reporting mechanism other than this framework where you are tracking the efforts to achieve what is nearly $15 billion in
>> we've already I mean we go through this in finance we take that money off agencies it's gone that's the tracking of it it's gone it's not provided to agencies
>> but there's
>> and then
>> exactly the same amount of money that's being spent on external labor now as there was
>> the 14.8 8 has been achieved. We have removed that from agency appropriations. It's a budget decision. It happens at budget time. That has happened. Running alongside that there is the strategic commissioning framework which is doing a different job which is saying we do not want these particular tasks outsourced. It is core public service work. The targets that were set under that were in the order of over $500 million in one year. The first year of target setting that has been achieved and reported against. What the the point I'm making now is because that has been done ongoing reporting of targets is difficult because the agencies have bought that work back in. So, you know, if defense did the heavy lifting and bought about 300 million in, they're not going to have another 300 million to bring in the next year because they've already made that decision. And that's the issue I think that we're tustling with now or wrestling with now that the strategic commissioning framework is in place.
>> Sounds to me like you claimed the savings of the 14.8 8 billion by simply cutting off those appropriations. But you've just shoved it elsewhere.
>> No,
>> the same amount is being spent on external labor but just in different departments for different reasons. So
>> taken the saving and agencies have been given and have to live within their appropriations that they are provided.
So the ANAO highlighted that reductions in supplier expenditure under the framework were not a saving because agencies would have related employee costs.
>> Yes. Yeah. Many most of them were um conversions from contractors to permanent public service work. So that was the point.
>> So was there a 15 billion or 14.8
billion? >> You're muddling two different things. We have removed the 14.8. It's gone. It's not it's agencies have had their agency budgets reduced by that amount. So that is how we got that money back and we said now that is to come from reducing your reliance on consultants and contractors labor hire traveling uh community you know a whole range of things a whole range [clears throat] of things in that 14.8 eight. Um, and then separately to that we've do we've made sure that conversions I mean and you've criticized us for expanding the size of the public service and I know you've out there again saying you're going to sack thousands of people again but >> when have I said that? Well, the coalition have said well you may not have but you as in the coalition the coalition have gone out and said >> that you are getting rid of a number of agencies of which there's several thousand people employed. So you that that's what you've done in the last day but of that increase in public servants about 14,000 of them are converting labor hire into permanent public service Uh and so yes, it is a reduced cost. It was a saving for agencies in that conversion uh because they are paying they're not paying the you know the pass through person. They're not paying the labor high company. They're just paying the wages and it's on the employment bill of the public service.
>> So is it a net saving
>> in terms of overall >> the reduction the 14.8 billion is a saving? >> Mhm. in relation to the um there there is a net save of it. I don't know if I've got the figure with me.
>> So the insourcing and compared
has been cheaper than the expensive labor high arrangements that were in place when we came to government. Okay, >> I'll see if I can provide you with the
>> Okay, that is very helpful.
>> Can I ask how
>> I have one more line of questioning?
>> One more line of questioning. Okay, well we'll rotate then and come back to you. Um, I will just say we are uh behind time um and we are unlikely to get anywhere near finance for at least an hour. We'll go to Senator PCO.
>> Thank you. I have a few lines of questioning um to go. A CRA Times article published in July of this year reports that the federal government has removed the targets for reducing outsourcing of core work. Um is that
So Senator, this is the ground we've just been covering. So after after two years of the strategic commissioning framework, uh we had got to the point where a substantial number over over 60 agencies had said to us that uh they were they were not going to set targets on the basis that they had minimal or no core work outstanding. This is the point the minister's just been making that having uh put a lot of effort into the first two years particularly around this core work issue where there might be uh integrity or capability concerns about that you would expect agencies to move quickly on that. Uh our our assessment is that they did indeed move quickly and at that point then uh our assessment was that targets were no longer as an effective measure for trying to drive this process forward. So would you have
any oversight of core work? How will you know what's happening?
>> So agencies are required to still uh put their plans in their corporate plan to set out exactly what they're going to do and then report against uh their progress in the annual report. The annual report of course is a report to parliament. Accountable uh accountable authorities are required to put in that what action they are taking.
So how will the APSC ensure that an improved framework will measure and result in a sustained reduction in reliance not just on consultants but contractors and labor hire rather than just a narrow expenditure target. So,
Senator, as we've been covering over the the last uh conversation, in terms of uh an integrity concern, in terms of ensuring that public servants are doing roles that only public servants can do, it's very important that accountable authorities are thinking about that against the principles in the strategic commissioning framework. That is not principally a matter of targets. That's not principally a matter of dollar value. That is a matter of I mean some of the examples that the minister gave before were really not necessarily large amounts of dollar value. They were about what was the appropriateness of the role and that a public servant should have been doing that role. So the accountability measure for that is through the corporate plan and through the annual report. Uh the strategic commissioning framework remains in force and accountable authorities are clear about that requirement that core work must be done by public servants. That is the principal measure for making sure that this integrity measure continues.
>> And do you expect then is it a requirement that corporate plans and annual reports will make specific reporting on the use of consultants uh labor hire and external agencies uh and uh in relation to core work
>> as it pertains to core work. Yes, in those two
>> only in relation to core work.