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2010
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
Commission of Inquiry into the Building the Education Revolution Program Bill 2010
EXPLANATORY MEMORANDUM
Circulated by the authority of
Christopher Pyne
Commission of Inquiry into the Building the Education Revolution Program Bill 2010
OUTLINE
The purpose of this Bill is to establish a full judicial inquiry into the Government's Building the Education
Revolution (BER) program, a $16.2 billion initiative to build and upgrade infrastructure in schools.
Public concern about the efficient use of Government funding in the BER program has been apparent since
the program's inception. Reports indicate the emergence of serious systemic issues in the program,
including:;
1. Enormous price inflation for the provision of some capital projects, managing contractors charging,
and being paid, fees excessive in comparison to the project's value, regardless of the specific
characteristics of the project;
2. A lack of transparency from State Government authorities responsible for the stewardship of public
funds; disregard of Commonwealth spending caps on project management fees the possibility that
project managers have colluded to extract additional fees; and
3. Serious flaws in the whole design of the BER, including boilerplate and insufficiently specific
allowances for the charging of fees, including contingency fees, "reporting to government fees"
and "design and price risk fees" which effectively invite price inefficiency.
In response to these issues, the Government established a `BER implementation taskforce' led by Mr Brad
Orgill to receive, investigate and resolve complaints within the program. The taskforce reports directly to
the Government.
The agencies responsible for managing the BER have not sought to apply any of the principles of
transparency. During this review, the taskforce which has spent millions on consultants, has declined to
take details of over a hundred complaints about construction work, on the grounds it could not guarantee
the anonymity of school principals, who expressed fear of retribution from the Education Department.
In the absence of any attempt to address the systemic problems, the only way to restore any public
confidence in the probity of the BER is to commission a judicial inquiry with the power to summon
witnesses and subpoena documents, with its own secretariat, with the ability to make genuine
recommendations truly independent of Government.
The BER Implementation Taskforce, led by Mr Brad Orgill, established to examine the operation of the
program, will be dissolved. Instead the Commission will investigate inefficiencies, mismanagement, cost
overruns, and payment of secret fees, preferential treatment and misallocation of resources arising from
the program.
This would allow taxpayers to be given a proper, open and transparent accounting on how Government
have undertaken to ensure that the objectives for the school infrastructure program have been met.
The Commission is to commence on 1 February 2011 and to report by 1 November 2011.
FINANCIAL IMPACT
The Bill will have no financial impact. The inquiry is to be funded from the ordinary annual services of
government provided for in the annual appropriation bills.
NOTES ON CLAUSES
Part 1 - Preliminary
Clause 1 - Short title
This clause provides for the Act, when enacted, to be cited as the Commission of Inquiry (BER program) Act
2010.
Clause 2 - Commencement
This clause provides for the Act to commence on the day after it receives Royal Assent.
Clause 3 - Act binds Crown
This clause states that the Act binds the Crown.
Clause 4 - provides for definitions
Clause 5 - Ministerial responsibility for this act
This clause states the Act is to be administered by the Attorney-General.
Part 2 - Commission of Inquiry into the BER Program
Division 1 - Establishment and functions of the Commission
Clause 6 provides for the establishment of the Commission.
Clause 7 - Terms of reference
This clause provides for the terms of reference for the Commission, which is to inquire and advise the
Parliament on the following in relation to the BER program:
(a) what were the protocols, guidelines, procedures and conditions of the BER program that
applied to Commonwealth officers and agencies, to State and Territory governments and
to contractors in relation to planning, allocation of funds, contracting, fees and pricing;
(b) were these appropriate to ensure that funds would be allocated to provide the things
most needed by schools, that there would be compliance with requirements, and that
the BER program would achieve value for money;
(c) how were they applied in practice and, in particular, what was the response of the
Commonwealth to advice and correspondence received relating to the design and
implementation of the BER Program, including warnings in relation to fraud and safety
risks;
(d) whether all relevant Commonwealth procurement and other guidelines and procedures
have been complied with in relation to the BER program.
Clause 8 - Report to the Parliament
This clause provides that the Commission must submit to the president and the Speaker a report by 1
November 2011.
Division 2 - Powers of the Commission
Clauses 9 - 16 outline the powers of the Commission with respect to hearings, counsel assisting the
Commission, power to summon witnesses and take evidence, self-incrimination, statement made by
witness not admissible in evidence, arrest of witness failing to appear, search warrants, and in relation to
documents and other things.
Division 3 -Offences
Clauses 17-27 outline offences, including unauthorised presence at hearing or publication of evidence,
failure of witnesses to attend or produce documents, refusal to be sworn or give evidence, acts or
omissions on different days to constitute separate offences, false or misleading evidence, destroying
documents or other things, intimidation or dismissal of witnesses, preventing witnesses from attending,
bribery of witness, fraud on witness, and contempt of commission.
Part 4--Operation of the Commission
Clauses 28-31 of this division provides for matters relating to the operation of the commission, including in
the event of death or incapacity of the commissioner, for remuneration and allowances of the
Commissioner, staff of the Commission and protection of the Commissioner and others.
Clauses 32- 33 provide for Legal and financial assistance for persons appearing before the Commission, and
reimbursement of witness expenses.
Clause 34 - provides for where, in the course of its inquiry, the Commission obtains information that
relates, or may relate, to the commission of an offence, or evidence of the commission of an offence
against a law of the Commonwealth, of a State or of a Territory, the Commission may, if in the opinion of
the Commission it is appropriate to do so, communicate the information or give the evidence to the
authority or person responsible for the administration or enforcement of that law.
Clause 35 - provides that the Governor-General may make regulations, not inconsistent with the Act