Wed, 17 Mar 2010 - 23:00
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Speech to Parliament: Bradfield Electorate - Building the Education Revolution

I rise to address the issue of value for money in Commonwealth procurement, particularly in the area of education. I refer to the specific case of the Gordon East primary school. I asked a question about this of Minister Gillard in the House yesterday and I was brushed off with the standard answer that when the government looks into these issues it usually finds that the opposition has got it wrong in some way and in fact the quote that we are comparing the actual cost of the BER funded project with is a quote that has been done on a different basis. The very distinctive thing about the case I mentioned yesterday in my question is that when I was talking about the comparator in the experience of Gordon East primary school, I was talking about actual spending in the last five years. The Gordon East primary school built a 180-square metre large special learning room for a total cost of $170,000. That comes to $920 a square metre. In contrast, the block which is presently being built at Gordon East primary school under Building the Education Revolution will cost, together with a little bit of work in the administration area, $2 million. When you do the maths, as I pointed out to the minister in my question yesterday, that produces a cost per square metre of $4,870, roughly five times as much as was paid by the school in 2005.

There are, I believe, a number of important principles at stake here that demonstrate what is fundamentally flawed in the way Building the Education Revolution, so-called, is being administered. They are principles which were not addressed in the minister’s brush-off remarks to me in response to my question. She did make the point that when these matters are investigated it is often found that the comparison is not apples for apples. It is true that the comparison would not be apples for apples in this regard: the $170,000 building in 2005 included air conditioning; the Building the Education Revolution building for $2 million does not include air conditioning. So it is true that the comparison is not apples for apples, and the comparison is not a favourable one.

But let us go to the underlying principle, because the underlying principle is this: the reason the Gordon East primary school secured vastly better value for taxpayers’ money in 2005 was, firstly, that the total cost of the program was not paid for by the taxpayer; there was some local contribution as well. In fact, of the $170,000, $150,000 came from a Howard government program and $20,000 was money raised by the local P&C.

The second important point is this: under the program in 2005 the parents and citizens association were given the option to go out and manage the procurement of the building themselves. The alternative was to have the New South Wales Department of Commerce manage it for, of course, a fee. I am not precisely sure what the percentage fee was, but it was a significant fee. The parents and citizens association of the Gordon East primary school chose to manage it themselves and that is why they were able to deliver such an outstanding outcome in terms of value for money and an outstanding outcome in terms of addressing the educational needs of the students of the Gordon East primary school. Because .a small proportion of the money had been raised by the P&C themselves, they naturally took very considerable care to get value for money. That is a feature which is wholly absent in the scandalous way that the Building the Education Revolution program has been administered nationally. There is no focus on value for money. On the contrary, there is simply a focus on shovelling the money out the door as quickly possible. We see a very stark contrast here which the present government would do well to reflect upon.