Page 2660 - Week 08 - Thursday, 24 August 2006
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It is worth noting, in addition, that over the four years to 2010 the ACT economy is expected to grow by 13 per cent, but government spending will grow by 19 per cent. That means for every one per cent growth in the economy there will be a 1.46 per cent increase in government spending. Regardless of these facts, we have before us the proposed Shared Services Centre. Let us look at how it will save government money and make the running of its administration more streamlined and efficient.
First of all, the centre has to be built. The sum of $5 million has been allocated for the purpose. As Dr Paul Grimes, chief executive of ACT Treasury, stated in estimates:
In terms of set-up costs, there is a provision in the budget for $5 million worth of costs for fit-out of office space. Obviously, in creating a new Shared Services Centre, it is going to be important to co-locate staff, ideally in one location, certainly for staff working on human resources and finance in the one location. There will obviously be costs there in fitting out that office space. There is provision made for that of about $5 million.
It is a fairly shaky foundation on which this organisation that is meant to deliver major cost savings is being developed. The $5 million estimate is rubbery at best, especially considering that proper site selection and more detailed planning have yet to be fully costed. Once this facility has been completed at whatever amount it ultimately ends up costing—no doubt it will exceed $5 million—it will need to be staffed and fitted out with suitable IT systems and networks. Dr Grimes also made reference during estimates to the government’s position regarding the meeting of these costs, stating:
There is also provision made for about $1.5 million in other set-up costs. This is putting together a transition team … There may be some additional costs over and above that $1.5 million.
So we have the $5 million estimate that is rubbery and the $1.5 million estimate that may not be enough. He went on to say:
We don’t expect them to be dramatically higher than that amount, but we do expect that there will be some further costs in integrating systems, bringing IT systems together and so forth.
So we are being softened up for the fact that the cost of this exercise—just the set-up costs, let alone the supposed savings it will realise—are reasonably elastic. That is an area of some concern. There is a measure of speculation in the government’s approach to costing this centre. It is difficult to know how meaningful will be the cost savings that will be achieved when the going-in costs are so uncertain. How can the government pin its cost saving hopes on a venture for which it has only a vague idea of how much it will end up costing?
Mr Deputy Speaker, another area of concern which I flagged in estimates and which either your or Mr Smyth also identified is the government’s use of contractors, both in the current operation of InTACT and in the proposed set-up for its new Shared Services Centre. Contractors can often be a costly means of carrying out tasks, as the government already knows through the $350,000 in costs to it for the Costello functional review. Here we see them again being used for both the day-to-day operations of InTACT and
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