MAJOR CHANGES are needed to procurement committing tens of billions of dollars every year, a new report by the Joint Committee of Public Accounts and Audit (JCPAA) has recommended.

Procurement is big business: over $80 billion in 2021-22, awarding more than 90,000 contracts to more than 12,000 businesses. Yet agencies systemically fail to comply with the rules and demonstrate value for money, lack compliance with ethical requirements, and demonstrate poor record keeping and contract management, according to the JCPAA.

Chair of the JCPAA, Julian Hill MP, said, “Put plainly, the Commonwealth has serious commitment issues with respect to procurement. Public servants need to get far more comfortable and skilled in sharpening their pencils on suppliers, even if this leads to difficult conversations and rejection.

“Action is needed to ensure that taxpayer dollars are not being wasted as a consequence of poor public sector procurement practices.”

"When departments and agencies conduct procurements using taxpayer money, they should be able to demonstrate that money was spent effectively and appropriately."

Big winners from limited competition include the five biggest consulting firms (Accenture, KPMG, Deloitte, PwC and Ernst & Young) which secured nearly $2 billion in government contracts in the 2021-22 financial year, comprising more than $1.6 billion in new contracts as well as more than $300 million in contract variations or extensions.

The report makes 19 recommendations to the audited entities and to the Department of Finance, aimed at improving procurement standards in the public service, and also improving Finance’s ability as a regulator. These include:

• Panels are stifling competition and value for money: A growing share of procurement is occurring from suppliers listed on Panels. Yet too often Panels are limiting competition and value for money, particularly advantaging the ‘Big Five’ consulting firms. Rules should make clear that: sole sourcing is not cool and multiple quotes should be obtained; a separate value for money assessment must still be undertaken; and panels should be refreshed more often.
• Fixing up AusTender: It should be made clear how many quotes were sought, even when procuring from a panel, and why a contract was amended or varied.
• Take a broader view: Procurement is more than a ‘conveyor belt moving Commonwealth money out and goods and services in’. Modern professional practices are needed – more active management of key supply chains and markets to maximise value for money.
• Value for money always: Things may be urgent – but value for money and record keeping requirements still apply.
• Internal scrutiny: Internal Audit Committees should increase their scrutiny of procurement controls, and provide more assurance over major, complex or risky procurements.
• One rule for all: All Commonwealth Corporate entities should be subject to the CPRs, reversing the current onus which sees entities like the NDIA excluded.
• Re-professionalising procurement: Finance must address the lack of procurement expertise and capability within the Australian Public Service (APS) by prioritising the development of a procurement professional stream in the APS, and by updating the procurement framework to match the development the procurement profession has undergone outside the public sector in recent years.
• Finance needs to lead: Finance is the system steward and regulator. To be effective, Finance needs to know what’s happening in the system.

The audit reports inquired into by the Committee are linked below:

• No. 6 (2021-22) Management of the Civil Maritime Surveillance Services Contract
• No. 15 (2021-22) Department of Defence’s Procurement of Six Evolved Cape Class Patrol Boats
• No. 30 (2021-22) Procurement of the National Capital Authority
• No. 42 (2021-22) Procurement of Delivery Partners for the Entrepreneurs’ Programme
• No. 5 (2022-23) Digital Transformation Agency’s Procurement of ICT Related Services

The report is available on the committee’s website.

ends

TODAY the Commonwealth Bank of Australia (CBA) announced an industry leading profit of $10.2 billion "and yet is trailing NAB in its pay offer to staff" according to Finance Sector Union (FSU) national secretary Julia Angrisano.

Ms Angrisano said CBA was posting the biggest profit of the big four banks and should be offering industry leading pay rises.

“Very obviously, the CBA can afford to pay more," Ms Angrisano said. "Their proposed pay rise would be a pay cut in real terms, given inflation.  The finance industry would expect the CBA to provide industry leading wage increases given their industry leading profits.”
 
Ms Angrisano also said there was no reason, given the CBA profit, for them to continue to close branches and offshore jobs.
 
“They are abandoning communities and Australian jobs in the interests of profit," she said. "Retail branch staff continue to turn up to work without sufficient resourcing whilst experiencing the threat of future branch closures whilst back-office workers continue to lose colleagues to offshoring."
 
FSU recently lodged a dispute at the Fair Work Commission regarding the banks direction that workers return to the office 50 percent of the time.

"These are the same workers that have delivered a $10.2 billion profit, yet the bank continues to ignore the impact this is having on their staff," Ms Angrisano said.
 
“CBA’s record profit demonstrates that staff can continue to work productively while maintaining their current work from home arrangements. The Return to Office mandate is clearly not necessary and we are therefore disappointed that CBA has chosen not to address these significant concerns during the Fair Work proceedings.
 
“The lack of self-awareness from the bank’s leadership, posting profits this big while denying their own workforce any recognition for their hard work and contribution, is actually quite alarming. The CBA is out of step with community expectation and out of step with Australian values.”

ends

THE House of Representatives Standing Committee on Economics will hold its biannual public hearing with the Governor of the Reserve Bank of Australia (RBA), Philip Lowe, on Friday 11 August 2023.

This will be the bank’s first public hearing since the release of the Review of the RBA and marks Dr Lowe’s last appearance before his term ends on September 17, 2023. His successor, Ms Michele Bullock, and other RBA officials will appear alongside him.

Committee Chair, Daniel Mulino MP, said, "The RBA’s decisions to pause interest rates in July and this month were welcome news to mortgage holders and renters. Although inflation is declining, it remains a key challenge to Australia’s economy and household budgets are still feeling the pressure.

"The committee takes its scrutiny of the RBA seriously and will continue to examine how the challenges of tackling high inflation are evolving – especially in light of the RBA’s mandate of returning inflation to the 2 to 3 percent range over time.

"I would also like to take this opportunity to thank Governor Lowe for his long service to the community – not just the past seven years as Governor but also the 40 years he has spent at the RBA."

Public hearing details

Date: Friday, 11 August 2023
Time: 9.30am – 12.30pm
Location: Committee Room 2R1, Parliament House, Canberra

The hearing will be broadcast live at aph.gov.au/live.

ends

THE Australian Taxation Office (ATO) is giving taxpayers with simple affairs the ‘green light’ to lodge their annual income tax returns.

ATO Assistant Commissioner Tim Loh said most taxpayers with simple affairs would find the information they need to lodge has now been pre-filled in their tax return.

"Most of the information we collect from employers, banks, private health insurers, share registries, and other institutions is now ready to go," Mr Loh said. "So, if your financial affairs are fairly straight-forward, you’ve got a ‘green light’ to lodge – but remember you still need to check your details are accurate before you hit submit."

Regardless of whether people  lodge using a registered tax agent or personally through myTax, pre-fill information will be automatically available in your tax return, he said.

Mr Loh also reminded taxpayers that some income may need to be manually added – for example, income from rental properties, some government payments or income from ‘side hustles’.

"Just because you’ve got a green light that doesn’t mean you should rush," he said. "Take your time and make sure to check that all your information is included."

Mr Loh offered some tax tips for this year's returns:

1. "Include all of your income: If you picked up some extra work through online activities, the sharing economy, interest from investments, a capital gain (e.g. from the sale of an investment property), or received a cash payment for any work, you will need to include this income in your tax return."
2. "Assess your circumstances this year: If your job or circumstances have changed this year, it is important to reflect this in your claims. For example, you may have worked at home less in 2022–23 than in the year before, as many of us returned to the office. The way you calculate working from home deductions has also changed, so consider which method is right for you."
3. "Records, records, records: To claim a deduction for a work-related expense, you must have a record to prove it. The ATO app makes it easier and more convenient to keep records in one place, including photos of your receipts and invoices."
4. "Wait for your notice of assessment: Your tax estimate in myTax or from your registered tax agent may not match your final tax outcome. We recommend waiting for your notice of assessment before making plans for how you will use any expected tax refund this year."
5. "Stay alert to scams: Remember that the ATO will never send you a link to login to our online services or ask you to send personal information via social media, email or SMS."

Mr Loh said, "Calling us won’t speed up the processing of your return, but you can keep track of your return by logging into the ATO app or through myGov, regardless of whether you lodged yourself or through a registered tax agent.

"We normally process online returns within two weeks, but if your return hits a speed bump, we’ll contact you," Mr Loh said.

The ATO reminded taxpayers that the outcome of tax returns this year may be different than in previous years, with some people receiving a lower refund than expected, or even a tax bill.

"There are a number of factors that can impact your final tax assessment," he said.

"In simple terms, if you don’t receive a refund, it just means that you’ve paid the correct amount of tax throughout the year. If you receive a bill, it may mean you didn’t pay enough tax – this can be for a number of reasons," Mr Loh said.

"When you lodge your own return, the due date for payment is November 21, regardless of when you lodge. If you are using a registered agent your due date may be later.

"If you’ve received a bill and you can pay, you need to do so by the due date to avoid interest accruing. If you’re experiencing financial difficulties, we have payment plan options available to support you, which you may be able to set up yourself on the ATO website," Mr Loh said.

"You can reduce your taxable income by making sure you’re claiming the deductions you’re entitled to – the ATO has over 40 occupation guides that can help you understand the deductions that are available to you depending on your job.

"It might be tempting to inflate your deductions, but if you’re considering this, we want you to hit the brakes and remember, we have sophisticated data-matching capabilities which provide us with the clues we need to spot deductions that don’t add up," Mr Loh said.

www.ato.gov.au

ends