Senator GALLACHER (South Australia) (16:20): When approaching this debate I took the liberty of getting my staff to get me the Commission of Audit terms of reference, which I think is probably a prudent starting point. Given Senator Smith's contribution that there are nearly 1,000 bodies, organisations, Public Service entities in the review, it makes really interesting reading. According to the terms of reference for the Commission of Audit: Accordingly, the Commission of Audit (‘the Commission’) has a broad remit to examine the scope for efficiency and productivity improvements across all areas of Commonwealth expenditure, and to make recommendations to achieve savings sufficient to deliver a surplus of 1 per cent of GDP prior to 2023-24. … … … Adequacy of existing budget controls and disciplines • The Commission is asked to assess the adequacy of current budgetary practices and rules (including specified timeframes and targets) in promoting efficient and effective government, disciplined expenditure, long-term fiscal sustainability and budget transparency. … … … • The Commission will report to the Prime Minister, Treasurer and Minister for Finance with: – the first phase due by the end of January 2014; and – the second phase due by no later than the end of March 2014. That is a pretty ambitious task. It is a monstrous and hugely ambitious task to examine just shy of 2,000 entities in a very short time frame over Christmas and to come back with a proper, prudent and due diligent examination of those areas. Good on them; it is an ambitious task, and if they are up to it that is fine. But what appears to be the case is that things are already on the target list. What appears to be the case is that savings have been predetermined and the authenticity of those may only be emphasised by this Commission of Audit. It does not appear to be a prudent thing to try and properly audit 1,932 government bodies between now and the end of January—but that is their call. The guidelines are quite clear, and anyone listening to this debate will realise that there are guarantees in place. A cursory examination of The coalition's policy for schools: students first, shows in bold print, 'There will be no cut to school funding under a coalition government.' It is very clear. Similar undertakings have been made across other portfolio areas, including health. But what is a cut? I was honoured to open an early childhood centre in Ceduna to further the early childhood health and welfare of Indigenous children, in particular. I opened another one in Whyalla, and there are a couple being built in the Anangu Pitjantjatjara Yankunytjatjara Lands. If one of those were to close, would that be a cut? It certainly is to the communities in which people seek these types of facilities and services. But hang on. In the coalition's world, that is not a cut, that is a saving, and they will simply direct that money somewhere else. It is a really big hard call: when is a cut a cut? Is it a cut when a school loses some funding for teachers and that funding is directed to another school? It certainly looks like a cut. I had the opportunity to discuss with a regional school which 600 kids attend what they thought about the announcement of the increase in funding in South Australia through the old Gonski reforms. They said: 'We need additional money to deliver the proper educational outcomes in this school. What we need is to be able to concentrate on those who need the most from the teachers in a smaller group, and having some additional resources will certainly help us to do that and we will get better educational outcomes.' But what do we have in the coalition's policy? 'More money is not necessarily the only solution for better education outcomes.' I agree with that, actually. I do not think that money is the be-all and end-all, but in a lot of cases there is not enough money in the system as it stands. Teachers are stretched, resources are stretched and services are not being delivered. We have a new government that was strangely silent for a long period of time. We were recalled to parliament very recently and in the short period in which we have been sitting we have heard Senator Cormann say that he has never disputed the science of climate change. That was the biggest, most quickly eaten piece of humble pie I have ever seen. If there had not been a back on my chair I would have fallen off it. We have heard Senator Sinodinos twice—once yesterday and again today—say: 'The GFC is still here. That's why we've given billions to the Reserve Bank.' This afternoon we heard, 'There are problems with the economy' and, 'The GFC hasn't gone away.' For the 2½ years that I was on the other side of the chamber, all we heard from this side of the chamber was: 'The GFC was nothing. You were pulling the electorate's leg. All the moves that you made were unnecessary.' I cannot leave out Senator Cash, because she was 90 per cent on the mark when she said, 'We took a policy to the electorate and we are sticking to it.' Anybody who saw question time can see that she is sticking to her lines—there is no doubt about that. I do not think that they ever told the electorate that they would only talk about their immigration policy once a week—I do not think they ever told anybody that. What we have here is the capacity for this new government to carefully reposition itself. Coming back to education and health, we are told that there will be no cuts, that more money is not necessarily the best answer and that 1,932 bodies are to be examined, with an initial report by the end of January and a final report by the end of March. I think that perhaps there is an agenda afoot. A casual observer of the internet who might receive some paraphernalia from Essential Vision finds, lo and behold, a survey. The Commission of Audit will be reviewing up to 2,000 public entities. As we know, it has not made any recommendations yet, but it is reporting in January and again in March. In a survey, Essential Vision poses the following question: The Federal Government has established a Commission of Audit to review the Federal Government’s functions and expenditure. Would you support or oppose the following possible recommendations the Commission could make? I accept that this is all conjecture, but it is really quite interesting. I have been a member of Medibank Private for a long time, and I read in the newspaper that it is up for sale. I am a senator in parliament and no-one talks to anybody in here about it being up for sale—you read it in the newspaper. Senator Cormann: On a point of order, Mr Deputy President, Senator Gallacher is misleading the Senate in saying that he had to find out about in the newspaper— The DEPUTY PRESIDENT: No, that is not a point of order, Senator Cormann. Senator Cormann: because there is actually a Medibank sale act that has been on the books since 2006, which his government never repealed. The DEPUTY PRESIDENT: There is no point of order. Senator Gallacher, you have the call. Senator GALLACHER: Thank you for that, Senator Cormann. I will go and have a look at it. But the message that I am trying to place on the record in this debate is that there is one process which is very clear: 'There are the 1,932 bodies. Report to me in January, and no later than March.' But there is another process that seems to be going on, with or without the assistance of the government, and it is really interesting. The federal government has established a commission of audit—that is a fact; everybody knows that—to review the federal government's functions and expenditure. It is very clear. In a poll by Essential Vision people were asked, 'Would you support or oppose the following possible recommendations the commission could make?' Essential Vision have given their Essential Report. 'Privatise Australia Post'—63 per cent oppose it. 'Reduce duplication between the states (especially in education and health)'—73 per cent support it; it sounds like a good idea. 'Reducing welfare benefits'—a total of 60 per cent oppose. 'Means testing all welfare benefits'—a total of 63 per cent support. 'Hand control of DisabilityCare to Medibank Private (which would then be privatised)'—a total of 59 per cent oppose. 'Privatise HECS debt'—59 per cent oppose. So what we have is a very clear set of statements taken to the electorate. We have heard all week about the mandate: 'Yes, we have a mandate to do this and we will not take one backward step on any of our policies.' We now see a commission of audit across all areas of government. The Treasurer, the Hon. Joe Hockey, said: You've got to have a credible plan to bring the debt down. And that's what we're developing. That's why we're having the Commission of Audit … … … Every area of government will be examined. There are no restrictions. So we put that back in place with the election mandate: 'We went to the electorate. Health's safe. Education's safe. Oh, we'll take the schoolkids bonus off you; that's gone. We're not cutting education, but we are going to take the schoolkids bonus out.' So I put it forward in this debate that we have a situation where all is not what it seems. Those who are now in government have the capacity to change their rhetoric, their words and their positioning to suit their objectives now, and clearly their objectives now are vastly different from what they were in opposition. All of a sudden they recognise there was a GFC, and all of a sudden they are saying it is still hanging around and there still could be problems from it, something that we said day in and day out but were derided for saying. All of a sudden there has to be a multibillion-dollar injection into the Reserve Bank. All of a sudden there has to be a new debt ceiling. All of these things come about because they are now in a position of responsibility and having to make decisions. I am very fearful that there will not be a good outcome in health or education. I have been fortunate enough in the short time I have been here to officiate at many infrastructure improvements and, in the education compartment, to interact with principals and students, including student councillors. I firmly believe that they will see a cut to their school communities. We have a Treasurer who is very clear and on the record: a cut is not a cut if the funding is redirected somewhere within the budget. So if there is a cut, for argument's sake, in any of the areas of my duty electorate of Grey—a cut to health or education services to the Anangu Pitjantjatjara Yankunytjatjara Lands that means a school or early childhood centre is closed or there is no funding for nurses or whatever—then they are expected to say, 'Oh, no, that's okay, because that's not a cut, because the money's going to be spent in another town or another place.' If any of the schools in the electorate of Grey or in any part of regional or city South Australia do not have enough in their education budget to deliver the outcomes that all South Australians and indeed all Australians require, they are expected to believe it is not a cut because someone in New South Wales is getting that money. So this is going to be a very problematic hard sell for this coalition government. There is no way that the electorate is going to accept their argument. There is just no way that parents, students and teachers will accept that a cut to their community is not a cut to education, because the money will be spent somewhere else. I have to say that, as a parent and a grandfather, I think there are a lot of things that could be improved in education. I think parents need to buy in more and I think everybody in the community needs to buy in more in schools. They need to get stuck in and deliver outcomes that are sensible. But the difficulty we have is that you have this spectre of a commission of audit. You have another spectre, which is that the GFC has not gone. We need to be very careful. The real economy, as Senator Sinodinos says, has not been swimming along. We need to be careful there. The mining economy is going okay, but over there it is not so good. So in that environment we have to trust and believe that a new government is not going to make cuts to education and health. I personally hope their word is going to be kept. All things being equal, I do not have any great angst with a government that is delivering proper education and proper health, but I do have angst with a government that may well be setting us up for a bit of a fall, that may be setting up local communities for a bit of disappointment—in fact, for some bitter outcomes. As I have said, there are some challenging places to deliver health and education. Those challenging places, well known by those on the other side, are also extremely vital in gaining outcomes which are fundamental to the Australia we live in. I would be extremely disappointed if some of the initiatives we have made, particularly in some of the outback areas of South Australia, were not followed up on or funded properly and did not get to their full potential because the Commission of Audit said 2,000 people lived there and the money could be better spent here. Therein you have the real difficulty of the Hon. Joe Hockey's predicament: moving money within a health budget or education budget is not a cut. I have said repeatedly and will take after Senator Macdonald's modus operandi: repeat, repeat, repeat. If a cut in health or a cut in education is simply moving something in the budget away from one community to another and that is not a cut, I say that is wrong because that community rightly will say it is a cut. I do not care that the community over there has got an extra teacher; you have taken one off me. I do not care that they have extra dollars in New South Wales; you have taken some off South Australia. I do not care that you have less money in the Northern Territory. And the saga goes on. We need to watch this space and be extremely vigilant. In the couple of days that I have had here I have seen a change in tone and rhetoric. If we come back in February, March or June of next year—whatever the sitting schedule is—and we start to see cuts appear, we will be holding you to account as we rightly should. Your documents and your leader say that he will not break a promise and he will carry out all his mandates. It says: There will be no cut to school funding under a coalition government. Those are the words of the document. Those are the words of the Prime Minister of Australia. We will be watching those on that side of the chamber for any cut which contradicts that clear and unequivocal position. These are the points that we need to be very clear on. You have your Commission of Audit. You will get your recommendations. You will have to make the tough decisions. We will be over here watching to make sure that you honour your word, that you carry out what you took to the Australian people and that you deliver on your commitment of no school funding cuts.