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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-09-14 Daily Xml
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SCHOOL BUS CONTRACTS

The Hon. D.W. RIDGWAY (Leader of the Opposition) (16:20): I move:

1. That a select committee of the Legislative Council be established to inquire into and report upon the department of education's open procurement process for school bus contracts, with particular reference to—

(a) the impact on regional communities through the subsequent deterioration of family business operators if contracts are lost;

(b) the ability of South Australian small operators to be sustained by private contract work and the subsequent impact on South Australia's future market competitiveness;

(c) the inclination of new contractors to support small communities in the same way as previous family bus company contractors;

(d) the sustainability of benchmarks used to determine tender applications;

(e) government subsidies and the concession reimbursement scheme provided to some operators;

(f) the failure to provide certainty for school bus operators whose contracts are yet to expire; and

(g) any other relevant matter.

2. That standing order No. 389 be so far suspended as to enable the chairperson of the committee to have a deliberative vote only.

3. That this council permits the select committee to authorise the disclosure or publication, as it sees fit, of any evidence or documents presented to the committee prior to such evidence being presented to the council.

4. That standing order No. 396 be suspended to enable strangers to be admitted when the select committee is examining witnesses unless the committee otherwise resolves, but they shall be excluded when the committee is deliberating.

Six years ago today, it came to light that bus contractors had been threatened by the education department in negotiations on new school bus contracts. The evidence of the Economic and Finance Committee showed that contractors felt intimidated by the department and were living in fear that they would lose their contracts.

Six years on, this Labor government is even more contemptuous towards small business and regional South Australia. It seems that the worst fear of these bus operators is now being realised. Rather than providing these small businesses with a stable business environment, Labor has left them in limbo for years now, with the soon to be removed Premier refusing to resolve the issues of expiring contracts.

Labor refused to guarantee these longstanding service providers realistic operating cost increases or the benefit of a selective tender process widely used in other government transport contracts. All of this was amidst the Premier's election promise of 100,000 new jobs for South Australians. After leaving South Australian bus contractors in limbo for five years, 280 privately operated school bus runs were called onto the open market. That was last October. In the first round, nearly half the contracts have gone to a Victorian company—a far cry from the 100,000 jobs for South Australians.

This also follows the 2006 Labor announcement of air conditioning and seatbelts to be installed on all school buses at significant expense to many of the small operators who, incidentally, have since lost their contracts. It hardly seems fair. These upgrades, operating costs and wages all come at considerable expense, and we have been told repeatedly that the price benchmarks set by DECS for the contracts were totally unsustainable for the smaller local operators.

The education minister and soon to be premier, the Hon. Jay Weatherill, continues to deny this. In fact, he is so blase about the plight of local operators that he, at the end of our last estimates, was unaware of the circumstances of the winning tenderers, their cost advantages and how they managed to achieve them. How is a state government meant to support state and local economies if they do not even understand the challenges faced by small businesses in the face of interstate and overseas competition? When deciding on the price point benchmark, did the Labor government consider whether a major interstate consortium would be prepared to support small communities in the same way the family bus companies do, Mr President? I am sure that you, growing up in a country community, are well aware of how small business operators in country communities do support their communities.

For example, will they transport kindergarten kids free of charge if it is raining or a parent is caught up in an emergency situation? What is the price that this government puts on that kind of community spirit and relationship with local businesses? Unfortunately, this is the end of the line for some small bus providers. A great deal of our future market opportunities will be gone as they inevitably crumble without the stability that these school bus contractors give them. There is simply not enough private work to sustain them.

I would like to put on the record one particular instance where this open procurement process will lead to the demise of a small business which has been absolutely dedicated to its community for the last 55 years. I thank my colleague in another place, the member for Schubert (Mr Ivan Venning), for sharing this with me.

Lyn Miller, owner and operator of Harris Coaches in Gawler, in service for 55 years, has lost a contract in the first round of tenders. This will mean the end of her business. Harris Coaches was told in late June that it had lost five routes. Two weeks later, Lyn Miller's local member, Tony Piccolo, put a congratulatory message in the local newspaper (The Bunyip), which said 'Happy 55th Birthday Harris Bus Service. Long Live the Butterbox.' This is pure testament to how detached Labor members are from their electorates. They have no comprehension of the plight of real South Australians who are trying to run a business and be a pillar in the local community and support their families.

It has also come to light that one non-local company which won contracts over local companies has been paid around $8,000 a month in concession reimbursements without those concessions being passed on to parents. The member for Goyder, Steven Griffiths, uncovered those Link SA invoices (effectively to the taxpayer) by FOI. A former employee of the company has come forward to say that he was directed to sign many student concession forms on behalf of parents without the knowledge of the school or the parent.

This is an interstate company using taxpayer-funded depots and buses and receiving incentives. It is not only dodgy behaviour but an extremely unfair advantage over our local businesses, which have shown loyalty and integrity in their operations. The transport minister asserts that this behaviour is entirely appropriate.

This arguably fraudulent practice came to the minister's attention in 2009 and was raised again in 2010 and in April this year by my colleague Mr Griffiths. In fact, he met with the minister and it was then raised in estimates. Astoundingly, the minister since has said that the payments really have little to do with student concessions, that they are more an incentive to ensure the service. As the Labor government effectively continues to condone this behaviour, I understand that the school concerned is considering going to the police.

The opposition believes that the small local businesses which have lost out in this abuse of process and poor government policy deserve to have a lot more questions asked. They deserve at least to have a minister pay attention to the matter and pay attention to what is going on in his own department. South Australians deserve to know what their money is being used for. Is it being used to pay unjustified incentives to interstate contractors who already have a competitive advantage over our own small businesses?

With those few remarks, I think members would be well aware that some serious questions need to be asked. That is why the opposition seeks to establish this select committee. It is my intention to bring this to a vote in the next few weeks. I hope that we can wind up a couple of the other select committees that are in operation at the moment so that we can devote a significant amount of attention to this important issue.

Debate adjourned on motion of Hon. I.K. Hunter.

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