NSW at a turning point … Premier Barry O’Farrell (left) and former Treasury official Kerry Schott (right). Photo: AFR
MORE outsourcing of government services, an investigation of teacher sick leave and a crackdown on subsidies and concessions are expected following a landmark audit of the NSW public sector.
The audit, led by the former Treasury official Kerry Schott, declares that NSW is at a turning point due to financial management that is ”confusing and lacking in transparency” and in which costs have been allowed to outpace revenue.
It makes 132 reform recommendations to the government across agencies, including health, education, transport and water and power utilities.
While many of the reforms are supported or already being pursued by the government, some of the more contentious proposals have been described as ”not current policy”.Advertisement
These include increasing the number of unattended train stations, raising fares, introducing driver-only trains and examining the sale of the Snowy Hydro. The government has not completely ruled them out.
Releasing the report yesterday, the Premier, Barry O’Farrell, signalled that the government planned to rely heavily on the outsourcing of government services to the private sector.
”Where there is a better way of delivering a government service or program, which maintains or exceeds appropriate standards, delivers results and defends public value, I believe government is morally and economically obliged to consider it,” he said.
This is supported by the audit, which recommends increased outsourcing where the private sector and non-government organisations can deliver ”better services at lower cost and with greater innovation”.
In education, the audit finds ”ample evidence of poor management of sick leave and long-service leave entitlements”.
It suggests principals investigate sick leave in their schools ”to determine whether some individuals may be abusing their entitlement”.
It says principals should be given greater incentives to address the issue ”such as being able to keep at least some of the savings”.
The government supports the sick leave proposals and while changes to leave entitlements are ”not current policy”, it says ”arrangements will be reviewed”.
The audit raises the issue of $6.8 billion worth of ”concessions”. It highlights the exemption accorded pensioners from paying car registration, which costs $200 million a year in forgone annual revenue.
The Treasurer, Mike Baird, said due to the difficult budget position, concessions were something the government would ”have to look at very closely”.
The report delivers a harsh assessment of the electricity businesses, saying they are ”inefficient in comparison to others” and that this has contributed to prices rising more quickly in NSW than in other states.
The audit says there is a strong case for privatising the state’s electricity distribution businesses – or ”poles and wires” – which would reap about $30 billion. But the government reiterated its promise not to sell them without an electoral mandate.
The audit challenges the widely held view that NSW has been under-investing in infrastructure for years but does question whether capital spending has always been well targeted.
It presses the government to return the budget to surplus after two consecutive deficits. It calls for consistent surpluses of $500 million to $900 million to fund “general government and non-commercial infrastructure” and help decrease net debt.