The Guardian July 26, 2000


Need is to build the public sector

by Anna Pha

Accountability and transparency are two of the economic rationalists' 
favourite buzz words. In particular, they are trotted out to defend the 
competitive tendering and contracting out of government functions and 
public services. Victoria's new Auditor-General, Wayne Cameron, is calling 
for extra powers to be able to look at the books of privatised State 
projects and those of private companies involved in contracting out.

Up to now the powers of Auditors-General have been limited to investigating 
the public sector. Historically the demarcation lines between public and 
private have been fairly clear.

A public hospital provided services for the public from the public purse. 
Employees of the local council collected the rubbish and carried out the 
many other services which were funded through rates collected by the 
council. The publicly owned water board also collected its rates, provided 
clean water and carried out its own maintenance.

But this has all changed. The boundaries between public and private have 
become blurred. The private sector is rapidly taking over the provision of 
public services  profiting from large subsidies, in some cases being 
financed completely from the public purse.

Tens of billions of dollars of work has been contracted out (outsourced) to 
the private sector by State and Federal Governments and their agencies  
rubbish collection, maintenance of rail tracks, road construction, 
training, health services, to name but a few.

Next year in Victoria alone there will be an estimated $20 billion worth of 
new joint public infrastructure projects between the public and private 
sector.

Once the private sector becomes involved, the details of how public money 
is spent are "commercial in confidence" i.e. their secrecy is guaranteed by 
corporate law.

There is no transparency, no public accountability here. Not even the 
Auditor-General has access to this information.

The Victorian Auditor-General first became concerned when allegations were 
made last year that performance figures supplied by the private company 
which had the contract to dispatch Victorian Ambulances were doctored.

Mr Cameron did not have the power to examine the books of the private 
company concerned, Intergraph.

Nor does he have the powers necessary to confirm that contractual 
undertakings by a private company were met. These include such diverse 
things as how many public patients passed through a private hospital and 
the number of cars that go through a toll gate.

"You don't want to go out there tramping through private sector books. But 
the quid pro quo for contracting with government is that you may be subject 
to our inspection", said Mr Cameron.

Companies tendering should be forced to make public the details of their 
other activities, political donations, sources of revenue, directors' 
interests, whether they are unionised, how they treat their employees 
around the world and their interests in other corporations.

All government contracts with the private sector should be open to public 
scrutiny.

A vital element in this process is Auditors-General being given greater 
powers, with the books of private companies and contractors providing 
public services or spending public monies opened up for public 
accountability.

It is time for some real accountability and transparency and the best way 
of achieving this is through an expanded and strengthened public sector.

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