It’s eloquent testimony to how this government has let its political and media opponents define it that Julia Gillard yesterday went to the trouble of announcing elaborate new arrangements to ensure the efficacy of funding provided for infrastructure reconstruction after the floods. Brad Orgill and Regional Australia Department head Glenys Beauchamp will join the “board” of the Queensland Reconstruction Authority; John Fahey will head a “Reconstruction Inspectorate”.

Bear in mind this is for funding that automatically goes to states under the National Disaster Relief and Recovery Arrangements, the long-standing process by which states and territories get up to 75% of the cost of replacing essential infrastructure. But now there’ll be a new “National Partnership Agreement” for these oversight arrangements.

You might dimly recall that, back in the day, the Rudd government wanted to use COAG to reduce the plethora (count ’em) of special-purpose payments to improve efficiency.

All this is because, despite presiding over probably the most effective GFC-era stimulus program in the world, the BER, with its miniscule complaint rate, much-needed infrastructure and strong support of construction sector employment, the government allowed itself to acquire a reputation for incompetence.

It has also permitted a type of constitutional mission creep in which, just as Peter Garrett was magically responsible for people who died as a result of shonky contractors sending them into unsafe roofs — indeed, could be charged with industrial manslaughter, according to Tony Abbott — so the Commonwealth is responsible for how state governments spend money. Odd how the few remaining states’ righters out there — all of whom are to be found in conservative ranks — have gone quiet on that.

It’s thus entirely appropriate that John Fahey heads the “Reconstruction Inspectorate”. As the government found when Brad Orgill gave the BER the nearest any construction project is ever going to get to a clean bill of health, it’s not enough to appoint a well-regarded independent businessman to assess how you’ve delivered a program. So now Gillard has gone one better, and put a Liberal into a position of assessment. And not just any Liberal, but a former Finance Minister, although there are few MPs left in Coalition ranks who would remember Fahey’s part in the great spending cuts of 1996-97.

I say appropriate because Fahey’s record suggests that, if anyone knows about waste and mismanagement, it’s him. Last year Crikey put together a long list of debacles, maladministration and bungles the Howard government presided over. Fahey’s record includes some of the worst stuff-ups of the Howard era:

  • the underpricing of the first tranche of Telstra that cost taxpayers $12 billion in 1997 dollars — coupled with a failure to check the huge invoices handed to government by financial consultants;
  • the botching of the sale of DASFLEET that led to long-running litigation with Macquarie Bank;
  • the bungling of Commonwealth IT outsourcing that lost tens of millions in public service productivity and never achieved the savings confidently predicted; and
  • the sale of Public Service properties to the private sector, which then charged such exorbitant rents that the Commonwealth actually lost tens of millions on some deals.

There are some mitigating circumstances — principally that Fahey’s Finance Department was given oversight of a significant privatisation and outsourcing agenda, where the greatest potential for stuff-ups lay. But ultimately he’s not there for his fine record of administration, but for the party he belongs to.

I don’t really have to tell you this, but Tony Abbott opposes it.

“You should not need a second bureaucracy to ensure that the first bureaucracy spends money wisely,” he told the ABC.

Well, apart from that being the entire rationale for the ANAO, he’s correct. Except, you can bet that if the government had done what the Howard government did and simply handed the money  to the states — as it did with cyclone Larry — he’d have complained about the lack of measures to ensure the money was spent appropriately.

Abbott has other problems. Shadow cabinet leaked like a sieve yesterday, especially over the mean-spirited proposal to slash foreign aid to fund the flood recovery package, including detailed reports of who lined up where on the issue. For a bloke who has had such a sure touch playing attack politics, Abbott’s handling of the flood aftermath has been remarkably clumsy, and his colleagues know it.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey