Australian Small Business and Family Enterprise Ombudsman

9 August 2018

Mr David Thodey AO

Chair

Independent Review of the Australian Public Service

Department of Prime Minister and Cabinet

PO Box 6500

Canberra ACT 2600

Dear Mr Thodey

Independent Review of the Australian Public Service

The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) advocates for

policy, legislation and practices that create conditions for small businesses and family

enterprises to grow. It also provides dispute resolution services and advice should small

businesses or family enterprises find themselves involved in a business dispute.
As an independent statutory office, ASBFEO has a separate budget allocation. Services

such as corporate and system support are provided by the department responsible for small

business. A larger department’s corporate policies and procedures and its IT system are

often more complex than is necessary for a smaller agency.
We have found that our staff spend a disproportionate amount of their time conforming to the

larger department’s corporate processes. For example, to purchase a box of pens requires

six separate digital entries. Each entry by our administrative staff requires approval in the

system by a senior staff member before the next step can be actioned. We have a single

administrator and four ‘approvers’. The authority to offer a more flexible, tailored approach in

support systems to small agile agencies is required.
These challenges are amplified when a small agency is required by a machinery of

government change (MOG) to move to a different department. While it is the right of the

government of the day to change the way Commonwealth responsibilities are managed,
there are complex issues to be considered for a small agency which include:
• Continuity of data for critical systems. Sharing information and combining resources is
hampered when systems are incompatible or outdated. For example, we moved to our
current department in February 2018 but remain on the previous departments IT
system. ASBFEO’s client relationship management system (CRM), the sole tool used
by our assistance team, is incompatible with our new department’s IT platform. Yet our
CRM is a Microsoft product.

To ensure the APS is fit-for-purpose it must be adequately funded to continually
upgrade information technology hardware and software to keep, at least, in-line with
the market and minimise disruption, maximise information sharing, across
departments. The APS should standardise its IT systems to allow for information and
staff transfer between departments. This should deliver economy of scale.

www.asbfeo.gov.au
Office of the Australian Small Business and Family Enterprise Ombudsman
• Enterprise Bargaining Agreements (EBA). Different benefits and pay scales between
departments and agencies can restrict pay increments for performance. For example,
many of our staff, through the recent MOG are at the highest band of remuneration
under our new departments EBA due to the fact that The Treasury’s pay rates are
substantially higher than the Department of Jobs and Small Business for the same job
classification. For those staff there will be no rise in pay for up to two years, irrespective
of performance. This produces a significant challenge for management.
The ASBFEO office has a staffing cap of 16 ASL but our delivery requirements need

approximately 22-28 staff, depending on work-load. This means ASBFEO has between 33%
and 75% of staff as ‘labour-hire’ contractors at any one time, simply because of our

artificially low staffing cap. The higher staffing level is more than covered by the budget

allocation, however, it is an expensive and inefficient method. Exempting non-ongoing

contracts from the staffing cap would help solve this problem while not increasing permanent

public service numbers.
The Australian Public Service must have in-house skills and competencies to deliver the

government of the day’s agenda. Employing ‘labour-hire’ contractors to achieve deliverables

can be counterproductive as contractors lack security of tenure and may not invest in a

career in the public service. The investment in competency and corporate knowledge are

lost when contractors depart for more secure positions. This can undermine the delivery of

high quality outcomes. Alternatives to this type of contracting are restricted by government

procurement and panel processes. There must be a more flexible approach to staffing levels

to deliver security of corporate knowledge and skills balanced with engaging contractors to

deliver specific deliverables.
In addition, both major political parties have expressed support for ensuring that small to

medium enterprises (SMEs) get a reasonable share of government procurement. We believe

this should be 30% of the total value in line with the requirement in the United Kingdom. To

achieve this there needs to be better public reporting and an acceptance within the public

sector that contracting with SMEs is not inherently more risky and that it is important for

economic growth and jobs. At the moment, the SME share of government procurement is

falling.
Thank you for the opportunity to comment. If you would like to discuss this matter further,
please contact Jill Lawrence on 02 6263 1558 or at jill.lawrence@asbfeo.gov.au.
Yours sincerely

Kate Carnell AO

Australian Small Business and Family Enterprise Ombudsman

www.asbfeo.gov.au
Office of the Australian Small Business and Family Enterprise Ombudsman