The Hon. Rob Lucas MLC

The Hon

Rob Lucas MLC

Treasurer

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Another ‘nail in coffin’ for Shared Services

Thursday, 4 August 2011

In a stunning admission, Treasury has confirmed it couldn’t show Shared Services was delivering payroll services cheaper than previously.

The Executive Director of Shared Services SA, Damian Bourke, told the Legislative Council Budget and Finance Committee this week:

Hon Rob Lucas MLC: In relation to the payroll function, are either you or the Under Treasurer in a position to report to the committee and to agencies that you are actually now doing that at a lower cost than you were previously doing it?

Mr Bourke: “No, I can’t do that."
(Budget and Finance Committee, 1/8/2011, p736)

“This admission is another ‘nail in the coffin’ for the controversial Shared Services project,” Shadow Finance Minister Rob Lucas said today.

“The Labor Government has always claimed that by centralising services such as payroll major savings would be made through the economies of scale.

“It is unbelievable and unacceptable that Treasury has not been able to demonstrate that centralising payroll services has achieved the claimed savings. It should be a relatively straight forward process to compare per unit costs of delivering these services before and after Shared Services. Perhaps the Labor Government is fearful of what such a comparison would show?

“This revelation comes after Treasury conceded implementation costs have blown out from $60 million to $114.4 million and the Auditor-General has reported significant shortfalls in claimed savings from the project.”

Mr Bourke’s evidence also included:

• There had possibly been two significant service delivery failures – payment errors to ambulance employees and possibly involving transactions between Shared Services and DECS
• At this stage Health has not been included in the whole of government e-procurement reform initiative
• Cabinet still had to decide whether any procurement savings in Health would be counted as savings achieved by Health or the Shared Services Project
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