Wednesday, 8 March 2023

Production of documents

State purchase contracts

Georgie CROZIER (Southern Metropolitan) (11:35): I am pleased to rise and speak to my motion 33. I move:

That this house, in accordance with standing order 10.01, requires the Leader of the Government to table in the Council, by 3 pm on Thursday 9 March 2023 the following briefs to the Assistant Treasurer:

(1) ‘Banking and financial services state purchase contract request for tender’ (B20/922);

(2) ‘Mandating all Victorian government agencies to use the new banking and financial services state purchase contract’ (B20/1092);

(3) ‘Cash and banking state purchase contract: deed of variation’ (B20/1206);

(4) ‘Cash and banking state purchasing contract’ (B20/1983);

(5) ‘Cash and banking state purchase contract’ (B21/165);

(6) ‘Banking and financial services state purchase contract request for tender process’ (B21/1053); and

(7) ‘Banking and financial services state purchase contract implementation and data inclusions’ (B21/1073).

I do this because there are significant issues surrounding the Assistant Treasurer at the moment about the role that he has played as a member of the executive government. The Assistant Treasurer has stated that he was ‘not a decision-maker’ in relation to the August 2021 awarding of a state purchase contract to deliver the state government’s banking and financial services. However, he is the minister who is directly responsible for the state’s banking and financial services state purchase contract, which is worth $120 million.

We know that freedom-of-information documents confirm that there were seven formal briefings provided which related to whole-of-government banking contracts that were awarded between June 2020 and August 2021, and the government’s own website Buying for Victoria lists the Assistant Treasurer as the minister directly responsible for approving state purchase contracts. He has also declared his own interest, that he owns shares in the Commonwealth Bank, and at the same time as he has been an owner of these shares he has announced that the government’s new banking and financial services state purchase contract will be delivered by a three-bank panel including the Commonwealth Bank.

You can see the theme here and why it is imperative that these contracts are released. There is a clear conflict of interest because of the minister holding the important role of Assistant Treasurer, his shareholding, the awarding of those contracts and what has been undertaken at the executive level and by this government. Already we know that the minister has said that he has accepted that there was an error of judgement, and he has apologised. But we really do need to get to the bottom of this, and that is why this motion is very important – so that we see those contracts. They are very clearly outlined. It will not take very much for the government to be able to provide the house with those contracts.

The other point I want to make is that the Assistant Treasurer has not shown that he was not the decision-maker in any of these decisions around the Commonwealth Bank and the awarding of the contract, and I think that is in itself extremely important. He has never declared that. He has not released publicly, as requested, the seven briefings he received about the state purchasing contract between those dates of June 2020 and August 2021. He has not explained why the government’s own website clearly states that state purchase contracts and registers require approval from – and I make note of this – the Victorian Government Purchasing Board, the relevant agency minister and the Assistant Treasurer. That is Mr Pearson. That is his role. That is his responsibility. I know that these ministers are often quick to say, ‘Not my responsibility – nothing to see here,’ but this is a very serious matter if we are talking about the integrity of government and government decisions.

The public release of these documents, as I said, is critical to understanding whether the minister acted in breach of the ministerial code of conduct, whether he acted in the public interest or indeed whether he acted in his own interest – the pecuniary interest that he was going to benefit from by the awarding of these contracts – and in doing so whether he has undermined the integrity of government and Victorians in this very important element of the democratic institution. As I said yesterday, our freedoms and our democratic rights are incredibly important, yet here you have got an Assistant Treasurer who has clearly not adhered to the ministerial code of conduct. I remind members that the ministerial code of conduct states:

Private interests

…

8.4 Where a conflict or potential conflict of interest could arise between a Minister’s or Parliamentary Secretary’s private interests and public duty (noting that Parliamentary Secretaries do not exercise the authority of a Minister) appropriate professional advice will be obtained. The Cabinet Secretary will advise the Premier who will then require the Minister or Parliamentary Secretary to:

a. divest themselves; or

b. relinquish control (including through a blind trust); or

c. put in place appropriate arrangements so that decision-making is passed to another Minister; or

d. take other such action consistent with the principles of this Code as is required.

8.5 Matters such as property holdings, personal investments, superannuation funds and the interests of family members will be dealt with as part of the audit process and Ministers and Parliamentary Secretaries will be obliged to take necessary action to prevent conflicts or potential conflicts of interest.

8.6 Ministers and Parliamentary Secretaries are required to be conscious of actual or potential conflicts of interest so that their obligations to the people of Victoria for honest, effective and efficient government are maintained.

That clearly has not happened, and you cannot have this minister, who has been embroiled in this saga going on for weeks, just continue to deny and continue to not actually state whether he recused himself from cabinet decision-making or whether he is in actual fact not the decision-maker in what he did. That is why it is incredibly important that these contracts are released as a matter of urgency. We need to restore as much trust in our democratic process as possible. There have been too many scandals and too many issues that this government have been embroiled in over many years, and it is not good enough that they think just because they got re-elected recently that they can carry on like they have in the past: ‘Nothing to see here.’ This is a very serious issue, and it goes again to the integrity around government.

I want to just briefly say that the minister has been in this place since 2014. He was elected in 2014, and he has maintained those shareholdings in the Commonwealth Bank since that time. He clearly has this conflict of interest, and to say he did not know is just not believable. There is a serious conflict of interest here. I note that when he was speaking about the contracts around the Commonwealth Bank issue he stated that he ‘simply noted the outcome of the tender’ process and that he ‘was not a decision-maker’. However, the Department of Treasury and Finance’s own website states that the Assistant Treasurer is the minister responsible for approving state purchasing contracts. It is there on www.buyingfor.vic.gov.au/about-procurement. He is there. He is the one who is responsible. You cannot just simply wash your hands of this, Mr Pearson. And Premier, you have covered up enough over these issues, and I think we just need some honesty and some greater transparency around it.

We know that the seven briefings occurred between June 2020 and 2021, as I said. That is why it is incredibly important that we have these contracts, as I have stated, and that these briefs that the Assistant Treasurer was involved with need to be released to the house so we can get to the bottom of this issue and understand it once and for all and understand the extent of how far embroiled the Assistant Treasurer is in this and whether in fact there are other issues around impropriety in what has gone on. In the interests of integrity and transparency and in the interests of our democratic process, I urge the house to support this motion.

Ryan BATCHELOR (Southern Metropolitan) (11:45): I rise to speak on Ms Crozier’s documents motion seeking in accordance with standing order 10.01 for the Leader of the Government to table by 3 pm on Thursday a range of briefs to the Assistant Treasurer, including the banking and financial services state purchase contract request for tender; mandating all Victorian government agencies to use the new banking and financial services state purchase contract; the cash and banking state purchase contract: deed of variation; the cash and banking state purchasing contract; the cash and banking state purchase contract; the banking and financial services state purchase contract request for tender process; and – deep breath – the banking and financial services state purchase contract implementation and data inclusions.

Sonja Terpstra: Wow.

Ryan BATCHELOR: There is a lot there. But what we really know that this documents motion is seeking is a fishing exercise trying to impugn the credibility of a member of the government. It is a kind of really sad and half-hearted attempt to have some confected outrage here about a situation where the minister himself has clarified quite clearly and on the public record exactly what has happened, issuing a statement in explanation of the circumstances around the approval of these state purchase contracts, which were in fact made at arm’s length from the minister by a standard government process. So whilst the opposition may be attempting to find smoke, there is none there, let alone some fire underneath it. The attempts that we have heard today and previously to smear the good reputation of the Assistant Treasurer we think are quite frankly efforts that would be better placed elsewhere.

So the circumstance we have here is quite frankly a standard practice of government: going out and using state purchase contracts and seeking the benefits of getting suppliers of goods and services that come to government to have standardised arrangements so that government can get value for money for citizens. These types of processes are overseen by the Victorian Government Purchasing Board, who provide strategic oversight. Developing quite a serious and significant business case for the provision of these goods and services is undertaken through extensive consultative processes both within government and with external experts, involving market testing, market sounding, so we can understand exactly what is out there in the market, and open tender processes, where large institutions and small institutions are invited to participate. They are run by senior public servants who I know, having worked with them in my previous job in the Victorian public service, are people of the utmost integrity. I do not think we in any way should be impugning their reputation as well, which is what the attacks on this process do. Particularly in circumstances where we are dealing with sensitive matters like banking contracts, an independent probity auditor is engaged throughout the process, and all of these processes are overseen by the Victorian Government Purchasing Board: taking market soundings, open tender processes, independent probity orders. They are all done, all run, by the relevant department and they are all run at arm’s length from ministers.

So what we see here with this documents motion is an attempt to find out more information about these circumstances when we have a statement on the record from the Assistant Treasurer clarifying the circumstances of the approval of these contracts. But I thought it would be useful for us, as members of the house, to understand what is in these documents and what is already on the public record about the nature and circumstances of the banking and financial services contract, because I think it is important that members of the house are aware of the significant information that is out on the public record about these contracts and how they operate. If I can take the time to go through some of those, I certainly will.

There is information on the buyingfor.vic.gov.au/banking-and-financial-services-contract website that provides a detailed overview of the key benefits of the banking and services financial contract and what is covered, in that agencies can choose to use one or a combination of panel banks for different services. Within the contract itself there are four different modules of banking and related services that departments and agencies can access and in doing so achieve both high-quality services and good value for money for the Victorian taxpayer. These include core transactional banking, such as the things we would expect in bank accounts, electronic payment services, Bpay and the like; merchant services, so things like inbound credit card and debit card receipts through things like electronic funds transfer at point of sale and gateway services; the purchasing and procurement cards that we obviously see in a range of different circumstances that are made available through the state banking contract; and the payment channels, which include both over-the-counter and collection services. So there is a range of services that are made available under the banking and financial services contract.

All this information is made available on the public website – it is all available in the public domain – so that everyone who has an interest in this topic can go and find out the kind of information that people may be seeking through this motion. If they are exceptionally and seriously interested in the intricacies of either the state’s purchasing contract arrangements or the state’s banking arrangements, there is lots of detailed information that is available to them. As the frequently asked questions section of the buyingfor.vic.gov.au website details, the central banking system enables the Department of Treasury and Finance to centralise the surplus funds held by departments and agencies in bank accounts across the Victorian government, and centralising funds in that banking system improves the efficiency of the state’s cash flow management task and reduces higher cost, longer term borrowings. By reducing longer term borrowings we can deliver net interest savings to the budget and provide support to the state’s credit rating and the capacity to fund government services. So what we are doing here by taking this thorough, arms-length, independent, probity-advised approach is making sure that the state’s money – the state’s cash – is handled in a way that delivers benefits to Victorian taxpayers. The benefit of this is that it is lowering the cost of banking and increasing the utilisation of the funds held across a range of Victorian agencies and services so that we can pay for the services that we have and better access the value of those accounts against the state’s balance sheet, because all of the funds that are held in the name of the state of Victoria should be being used for the benefit of the state of Victoria.

What I think is interesting about this new panel arrangement is that it is trying to create a wider range of services that are available to agencies, because we do know that the range of things that various government agencies require out of their banking services are very different, depending on the nature of the service that they are doing. For example, the needs and requirements of a large central government department are going to be much different to the needs and requirements of smaller, more outward-facing agencies that might exist right across Victoria and who engage with the public on a more day-to-day level.

What we are trying to do with this state purchase contract and what we are trying to do with these new measures to improve these services is provide best and highest quality practice of banking services that meets the needs of every part of the Victorian public sector, that achieves value for money and that is doing so in a way that brings modern and professional banking practice to all elements of the Victorian public service. We are always interested in making sure that there are high-quality services and better value for money. We are much more interested to focus on those issues than to try to confect some outrage and undertake a cheap witch-hunt.

John BERGER (Southern Metropolitan) (11:55): Today I rise to contribute to debate on my colleague Ms Crozier’s documents motions on the banking and financial services state purchase contract. In doing so I want to note that I come from a union background and am not a lawyer. But I have had a look into this matter, and I would like to add my own contribution, a contribution which draws on my own perspective, the perspective of a worker. Ms Crozier, my colleague from Southern Metro Melbourne, has asked the house in accordance with standing order 10.01 to require the Leader of the Government to table in the Council by 3 pm on Thursday 9 March 2023, which is tomorrow, the following briefs to the Assistant Treasurer:

(1) ‘Banking and financial services state purchase contract request for tender’ (B20/922);

(2) ‘Mandating all Victorian government agencies to use the new banking and financial services state purchase contract’ (B20/1092);

(3) ‘Cash and banking state purchase contract: deed of variation’ (B20/1206);

(4) ‘Cash and banking state purchasing contract’ (B20/1983);

(5) ‘Cash and banking state purchase contract’ (B21/165);

(6) ‘Banking and financial services state purchase contract request for tender process’ (B21/1053); and

(7) ‘Banking and financial services state purchase contract implementation and data inclusions’ (B21/1073).

Considering that three state purchase contracts have been requested, I want to particularly focus on this. It would be good to flesh this out and to understand why it is being requested, what purpose it serves for the government and how it might benefit the house. State purchase contracts, or SPCs, put quite simply, strengthen government procurement processes. There are several state purchase contracts across a range of goods and services. This request by my colleague Ms Crozier makes that clear. What are the benefits of these contracts? Well, they include better value for money. This is important. From my perspective, having built a home, I know the importance of value for money. These costs must be limited to ensure taxpayers get the best value for money. We must approach governing from a perspective of budgetary accountability.

State purchase contracts also ensure supply and service continuity, which is important for government departments to operate efficiently as well as for greater transparency. This improves insurance and access for supplies, and touching on transparency again, it ensures that the public and our partners in the private sector and more know that there are competitive tender processes. An example of a state purchase contract is the banking and financial services contract, which includes Westpac, the Commonwealth Bank and the National Australia Bank. Why am I going to this – why am I explaining this in detail? The briefs have been requested. Put simply, the government will always uphold its obligations to the Parliament to provide responses to motions whenever they are passed. I am committed to ensuring our government is accountable and transparent. I would like to acknowledge the contributions to this debate so far, as this chamber is at its best when keeping people accountable.

I want to discuss the banking and financial services state purchase contract. The process of selecting supplies was robust. A new and refreshed contract for the banking and financial services SPC was established in October 2021. The business case for this contract was like all the other work of our government and developed the following extensive consultations with the relevant sectors, in this case key banking services providers, key departments and key agencies. The Victorian Government Purchasing Board provides strategic oversight to achieve these aims, and I want to acknowledge the experience of the board. The chair, Nadine Lennie, has more than 25 years experience in procurement. She knows her stuff. So it is clear the process involved market testing with an open tender, with both large and small banks invited to participate, and a team around this process, and there was an independent probity –

Business interrupted pursuant to sessional orders.