Page 3747 - Week 09 - Wednesday, 24 August 2011
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oversupply of offices. So it will be bad for business and it will be bad for the community. There is really very little to commend this project. Unfortunately, I think we have seen some particularly rubbery savings figures put by the government to justify their claimed savings as a result of this project.
Throughout the estimates process the government presented neither a credible nor a convincing case for the proposed building. As a result of spending $5.7 million in consulting fees and receiving 16 reports in return, the government based its decision on a simple A4 sheet of paper—$34.5 million dollars worth of claimed operational and efficiency savings. Yet this A4 sheet was littered with savings oddities like churn—moving staff between buildings—$2 million; reduced attrition, $500,000; and reduction in unexplained absenteeism due to improved workplace amenity and morale, $4 million.
That is an interesting one. How much could they save if they stopped persecuting public servants who speak out? There could be millions of dollars in savings. Imagine if they were to stop bullying staff when they go to work. Imagine how much they could save. We might be facing tens of millions of dollars of savings on the government’s numbers. They treat people terribly and now they are telling us that it will all be fixed if they just build this $432 million office block. That will fix it—it will stop churn, people will not move on and people will no longer be bullied. Cultural change may well save some money, but these are rubbery figures.
Senior government officials in the Chief Minister’s Directorate and Treasury could not clarify the provenance of these savings, nor could the consultants involved in the costings of this project. It was telling that in the final minutes of an estimates committee hearing with Treasury, the Under Treasurer almost magically produced a budget impact statement which did not allow for proper scrutiny during the hearing, given the unreasonable time frame that was accorded to the committee. A subsequent review of this document showed that the impact statement and the A4 sheet which they had been relying on claimed different elements contributing to the $19.3 million in operational savings. It was conceded by the Under Treasurer that this $19.3 million saving did not take into consideration an estimated $6 million in annual depreciation of the asset.
At one point during the hearings we were presented with the A4 sheet of savings—this shoddy piece work. The government was basing its claims of savings on this A4 sheet. We were expected to believe that it would be able to save money from things like churn, as I have outlined, but also rental savings. You would save on rental, but there was no allocation in this A4 sheet for the cost of building the building. It is a bit like a family saving for a home and saying, “If we buy this home, we’ll save 500 bucks a week in rent; we’ll be 500 bucks a week better off,” without taking into account their mortgage repayments which they need to make in order to buy the home. This has been the level of analysis that we have been subjected to.
Going on in relation to the A4 sheet appended to a CBRE report, it was qualified by:
You will not find in this document (the spreadsheet), for instance, the numbers 19.3 and 15.2, but those savings are built into the model.
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