GOVERNMENT PROCUREMENT

Government Procurement - Grievance Debate

May 6th, 2015 Mr KNOLL ( Schubert ) ( 15:31 ): Today, in the latest instalment of looking at the waste and mismanagement of this government, we turn to a topic that is something I think most people can grapple with, and that is the cost of a cup of coffee. Before I get there, when we look at the financial performance of a government it is often quite difficult for individuals to understand what value for money represents.

I think it would be pretty difficult for the person on the street to be able to understand whether $422 million is a good use of money in procuring the Enterprise Patient Administration System (EPAS). I think it is pretty difficult for the average punter on the street to understand whether $2.1 billion to buy a new hospital, the new Royal Adelaide Hospital, which will cost us over $3 billion over the life of the project, is good value for money. 

Something that people grapple with on a daily basis and can understand is the cost of a cup of coffee, and my staff and I did a bit of research over the past couple of days. I must admit that I actually do not and cannot drink coffee. When I come here in the morning, a glass of skim milk with Milo is what does me, but coffee does seem to be the order of the day. I see hordes of people walking to their offices with their cups of coffee, their ripple-wrap cups and so on, that they buy in the morning, and they certainly know the cost of a cup of coffee. 

A little bit of a search on the internet reveals that Adelaide's average price for a cup of coffee is $3.47. That is probably weighted, with cheaper prices in the regions, so we will say that $3.60 to $3.80 is what a cup of coffee is worth on average in South Australia. Indeed, we did a bit of market research this morning, and we went and had a look around. 

If you go to Cibo on Hindley Street, an espresso will set you back $3.10 and a latte $3.80; at Hudsons on Currie Street, $3.40 for an espresso and $3.80 for a latte; and at Rigoni's, the beautiful Rigoni's, it is $3.90 for an espresso and $4.20 for a latte. Surely, a restaurant of the calibre of Rigoni's is where, yes, you will pay a few more cents for a cup of coffee, but it will be amongst the best that you can get. Just down the road here at Madame Hanoi's, it is $3.50 for an espresso and $4 for a latte. 

The reason I go through this is that people would say to that, 'Okay, it seems like a lot for a cup of coffee, but it is reasonable; I am prepared to pay it.' It just seems that this common sense is not applied when it comes to government procurement. I have received some information in regard to what the South Australian government pays for a cup of coffee in certain circumstances. 

History SA had a three-day conference. At that conference, at which there were quite a number of guests, they paid $6.50 for a cup of coffee, but they did not pay for an individual cup of coffee: they bought 80 cups of coffee at $6.50, and that was on day 1. On day 2, they bought 190 cups of coffee at $6.50 and, on day 3, they bought 130 cups of coffee at $6.50. I am not sure that any punter on the street would say that that is value for money, but it gets worse. It was not an isolated instance. 

There was a DFEEST three-day conference at which they had 20 people over the course of the three days who paid $6.50 for a cup of coffee. Going on, there was a DMITRE meeting on 15 May 2013 where 45 people in a group paid $6.50 for a cup of coffee. Again, on 29 October 2012, the Department for Manufacturing had a workshop, where they again thought that it was okay to pay $6.50 for a cup of coffee. 

I know that we are here arguing about a couple of dollars for a cup, and even if I extrapolate that over the few hundred cups the government bought in this instance, for me it is not about the money: it is about the idea that somebody thought that $6.50 for a cup of coffee represented value for taxpayers' dollars, and it does not, it absolutely does not. It is another example of a culture that exists within this government that it is okay to waste taxpayers' money. 

I genuinely believe that it is because somebody else's money. Certainly, the punter on the street would not be paying $6.50 for a cup of coffee. They would be going to any of these establishments I mentioned earlier and paying their $3.50 or $4. Instead, someone has decided that it is okay—in fact, many people in this instance have decided—to pay $6.50. It is because we do not look after these cents, the government does not look after the cents and the small dollars, that we get to a $331 million overspend on last year's budget. It is exactly these kinds of dollars which mean that departments such a Health blow their budget by $161 million and Education and Child Development blow their budget by $137 million. It is just not good enough, and the taxpayers of South Australia deserve a whole lot better.