Shadow Treasurer Rob Lucas has written to the Auditor-General requesting an urgent investigation of Rann Government actions in concealing expenditure on consultants.
“Over the last three years the Rann Government has taken action in a number of ways to avoid accountability and prevent details of actual expenditure on consultants from being publicly revealed,” Mr Lucas said today.
“The Rann Government is increasingly using grey areas in the definition of a contractor or consultant to reclassify consultancy expenditure as contractors thereby reducing the level of public disclosure and accountability.
“For example, in March this year the marketing and management consultancy firm ‘In Front Management’ were employed for the specific task of organising the expensive launch at the Adelaide Convention Centre of the State Defence Sector Plan.
“Whilst the Rann Government has refused to answer questions in Parliament about the costs of this consultancy, they have now conceded the costs will be classified as ‘contractor’ costs.
“In contrast, under the former Liberal Government, when similar consultants Strategic Public Relations organised the Tourism Awards and Pinnacle Promotions organised Youth Media Awards and Youth Week, these costs were correctly listed as consultancy expenditure.
Mr Lucas said further examples had also been revealed in the ‘stashed cash’ inquiry with a number of tax invoices which clearly refer to ‘consultant’ or ‘consultancy’ routinely being reclassified as contractor expenditure.
“If the Rann Government’s actions had been followed by the former Government then millions of dollars in consultants’ expenditure could have been hidden under contractor costs,” Mr Lucas said. “For example, millions of dollars spent on legal consultants in the ETSA deal could have been hidden as contractor costs!
“The different definitions are important because of the much tougher public disclosure and accounting requirements for consultancy expenditure.
For example, regulations under the Public Sector Management Act require the name, total cost and nature of work undertaken by all consultants to be disclosed publicly in annual reports. However, there are no similar requirements for contractors.
“Similarly, Treasury accounting guidelines insist on public disclosure of consultancy expenditure but explicitly indicate that such disclosure of contractor expenditure is not required. As a result, some agencies only include a one-line aggregate cost figure in their annual report, whilst other agencies don’t report anything.
“Agency annual reports show that total expenditure on contractors is significant compared to total expenditure on consultants.
“For example, the 2004 Auditor-General’s Report shows that the Department of Water, Land and Biodiversity Conservation spent $16.9m on contractors and only $504,000 on consultants and the Department of Trade and Economic Development (DTED) spent $3.5m on contractors and only $800,000 on consultants.
“Rann Government promises about openness and accountability have been again exposed as a fraud.
“In the leadup to the last election Labor campaigned strongly on a promise to cut dramatically expenditure on consultants, and the Rann Government has clearly been doing its best to hide its failure in this regard.
“The Auditor-General should take urgent action to investigate these actions by the Rann Government and report on it in his coming Annual Report.
“A future Liberal Government will ensure greater accountability in this area by reversing the actions of the Rann Government and insisting on greater accountability through more detailed reporting of contractor costs in agency annual reports.”