In NSW our hearts go to Lach and family : Victorians Endure Final Day Living in Brutal Dictatorship

The Shovel’s satirical take on the PwC affair

Has outsourcing public service matters fallen out of favour and should the federal government pivot for a quick win? That is the question for a new batch of external advisers.

James Schloeffel

Sep 29, 2023 – 1.10pm

The back page of The Australian Financial Review Magazine’s 2023 Power issue: a request for tender. Below is how it appeared in the magazine. Scroll down further to read the full text.

Here it is in full ...

Tender Notice

Request for tender for the provision of consulting services

The Federal Government is seeking the services of a suitably qualified consultancy to advise on whether the government overuses the services of consultancies.

1. Background

The Federal Government spent $43 billion on external consultants in the financial year 2022-23 (according to figures prepared on behalf of the government by KPMG). This represents a 215 per cent increase in spending on consultants since 2011 (based on a report prepared for the government by EY).

While $43 billion may seem like an extraordinary amount of money, we all know that getting a bunch of grads together with some Post-it notes, a whiteboard and 10 boxes of pizza for an “agile, blue sky ideation session”
on the future of Australia’s social services sector doesn’t pay for itself.

That said, given the recent media coverage of PwC’s use of confidential tax information (as summarised by Accenture – see Appendix A), as well as the increased cost-of-living pressures being experienced by ordinary Australians (outlined in the BCG Cost-of-Living Report, Appendix B), we are starting to sense that the advice to slowly replace the entire public service with outside advisers (McKinsey & Co Strategic Paper, 2019, Appendix C) may have been misguided.

While a recent research project by Bain found that Australians are positive about the government’s use of consultancies, a series of focus groups, conducted on behalf of the government by Deloitte, detected some
very slight levels of negativity. (The 725-page report, “Are you f---ing serious?”: Community responses to government spending on consultants, can be found in Appendix D.)

Due to a lack of resources within the public service, we now require an external party to provide an integrated, 360-degree, solutions-focused deep-dive to close the loop on strategic deliverables moving forward (translation: please tell us what to do next).

2. Key deliverables

The successful consultancy will be required to:

a) Determine whether $43 billion is, in fact, a lot of money

b) Provide a recommendation for the optimum level of government consulting work in the future (eg “the same”, “more”, “a lot more” etc)

c) Pad it out in a 400-page PowerPoint with a meaningless-but-impressive-sounding title such as “Driving efficiency dividends in a climate of escalating citizen expectations”.

You may also wish to include an additional costed proposal for fixing the cock-ups that will inevitably arise from your original recommendations.

3. Evaluation criteria

Prospective consultancies will be judged on their knowledge of government consulting and the consulting profession. Also, if you have any details on the government’s taxation policy that you could share with us, that would be a massive bonus. The only guy with the log-in password was from PwC and he’s now on indefinite leave.

4. Budget

We will consider proposals up to $200 million + materials. Up to $300 million if your proposal includes a senior partner briefly sitting in on a meeting and saying the word “synergies”.

5. Mandatory requirements

A set of “company values” that includes the terms Integrity, Trust and Honesty.

6. Optional requirements

A Conflicts of Interest assessment.

Please submit your proposal to our tender management team, currently being run on behalf of the government by our consulting partner PwC. They promise they won’t share it with anyone.

• James Schloeffel is founder of The Shovel and Wankernomics.com – an important new resource for corporate Australia.

 

Trail of blood’: inside Michael Pezzullo’s behind-the-scenes world

Neighbours call his home “Southfork”, and just as J.R. schemed his way through Dallas, the top security mandarin put back channels to good use.

Andrew TillettForeign affairs, defence correspondent

Sep 29, 2023 – 2.52pm

In one of Canberra’s dress circle suburbs, neighbours have dubbed Michael Pezzullo’s home “Southfork”, its imposing facade – even down to the white columns – evoking the Ewing ranch from hit TV series Dallas.

And just as J.R. schemed his way through the show, this week the curtain has been lifted on how Pezzullo, the benched secretary of the Home Affairs Department, was exposed for his behind-the-scenes manipulation of political events.

Michael Pezzullo may not return as the nation’s home affairs chief. Alex Ellinghausen

A cache of hundreds of text messages between Pezzullo and Liberal Party powerbroker Scott Briggs, obtained by The Sydney Morning Herald and The Age newspapers, has revealed Pezzullo’s back-channel efforts to increase his influence and please his political masters, shape the bureaucracy, disparage fellow public servants and government ministers and muzzle the media.

Southfork may still be standing, but the revelations have seen the abrasive Pezzullo removed as the head of the mega department he created, unlikely to return, and put the future of the home affairs construct under a cloud.

A former colleague from the national security community describes Pezzullo as a patriot with the right instincts on security matters and a rare creative thinker in the bureaucracy but with a fatal personality flaw.

“He has created a persona of enormous drive and focus but that comes at a tremendous price of being destructive of everyone around him,” the ex-colleague said.

“I always felt he flew close to the sun. The miracle is he survived for as long as he did but I always thought he would get caught by his capacity to make enemies.

“He has left a trail of blood in home affairs which I think will see the organisation broken up now.”

Pezzullo, who has maintained his silence this week, agreed to stand aside as secretary on Monday after the government referred the matter to the Australian Public Service Commissioner to investigate whether he breached the Public Service Code of Conduct. Former commissioner Lynelle Briggs is leading the inquiry, which Prime Minister Anthony Albanese wants finalised as a matter of urgency.

There is no suggestion that Pezzullo sought personal financial gain through his interactions with Briggs; rather the issue is whether he overstepped the mark for an apolitical public servant. As one long-time political operative noted, for Pezzullo his focus has been the “accumulation of power”.

One of Canberra’s great survivors

A common refrain of those who have known and worked with Pezzullo when AFR Weekend spoke to them about the imbroglio is that they are not surprised that Pezzullo has come unstuck; rather it is the lack of tradecraft – that the messages hadn’t been set to automatically delete.

Former foreign minister and Pezzullo’s former boss, Gareth Evans. Daniel Munoz

Pezzullo has been one of Canberra’s great survivors. He started out as a graduate for the Defence Department in 1987 and in 1993 crossed the lake to become a staffer for then foreign minister Gareth Evans. An urban legend that Pezzullo was struck in the head and left bleeding by a stapler thrown by a furious Evans remains just that.

After Labor lost office in 1996, Pezzullo became a staffer for opposition leader Kim Beazley.

“He got on well with Kim because they could talk about wars and tanks and the battle of Stalingrad,” a Labor staffer from those days recalls. The staffer describes Pezzullo as “ambitious, highly intelligent and ruthless”, who was a neat freak and “a bit OCD in regards to a tidy desk”.

But in a recurring theme for his career, Pezzullo would clash heads with colleagues, shadow ministers and their staff. “There was no contest of ideas because he was always right. That was apparent from early on,” the staffer says.

While in Beazley’s office, Pezzullo sketched out plans to establish a home affairs department, most notably the creation of a coast guard to intercept asylum-seeker boats. The policy predated the Tampa crisis but failed to shift the perception that Labor was soft on boats and security.

After Beazley’s loss in 2001, Pezzullo went back to the Defence Department, where he authored the 2009 white paper and its key recommendation of doubling the submarine fleet to 12.

However, a power play with the then Defence secretary, Nick Warner, ended with both of them out of the department. Warner was shifted to become head of ASIS, while Pezzullo was shifted to customs as chief operating officer.

Pezzullo later became head of customs, and in a sign of his ability to adapt and survive to a change in government, played a key role in helping a rookie immigration minister named Scott Morrison “stop the boats” through Operation Sovereign Borders. He was rewarded with elevation to immigration department secretary in 2014.

Then-immigration minister Scott Morrison in January 2014. Andrew Meares

Amid the threat of Islamic-inspired terrorism and Chinese interference in domestic politics, the home affairs concept was revived. Despite opposition from moderates such as Julie Bishop and George Brandis, the new department consolidated ASIO, the Federal Police, Border Force and other law enforcement agencies under the home affairs banner in late 2017 and put Peter Dutton in charge as the responsible minister.

Pezzullo’s texts with Briggs – a confidant of both Morrison and Malcolm Turnbull – demonstrate Pezzullo’s eagerness to become the head of the new department, as well as need for conservative ministers to stay in charge.

On the way out

But the reality is Pezzullo has been on the way out for some time, and his influence has been waning. His tenure as secretary was due to end next year, and it was unlikely it would be renewed.

A shift to the job he cherished most in government, Defence Department secretary, had been snuffed out when the incumbent, Greg Moriarty, was given another five-year contract last year.

Sources said Pezzullo had tried to ingratiate himself with both Bill Shorten and Anthony Albanese to protect his job. While Albanese retained Pezzullo after the 2022 election, the department was nevertheless stripped back with the Federal Police, AUSTRAC and Criminal Intelligence Commission returned to the Attorney-General’s Department.

The current Home Affairs Minister, Clare O’Neil, is said to have gone cold on Pezzullo. It is noteworthy she has spent much of her time being critical of the department’s performance, whether it be immigration or cybersecurity. She commissioned former mandarin Dennis Richardson to review home affairs’ handling of offshore processing amid claims of bribery over contracts.

While Pezzullo has a high level of security clearance, it doesn’t automatically follow that he received access to all of the nation’s secrets.

The perception he was an omnipotent security tsar was a “gross exaggeration”, according to one intelligence insider. “He was not in charge as much as you think. But I think as you see from the text messages he wanted to be playing in a broader space.”

Former home affairs minister Karen Andrews is critical of Pezzullo. Alex Ellinghausen

A former senior public servant adds Pezzullo’s wings began to be clipped under the Liberals’ last home affairs minister, Karen Andrews.

“Pezzullo has not been a powerful public servant since Andrews. She wasn’t impressed with him,” the former public servant said, adding that Pezzullo’s texts “show a mindset completely unsuited to a leadership position”.

A senior government source said they expected there would be a conversation about the department’s structure in the wake of the text scandal. Coincidentally, a week earlier, the government announced a fresh review into the intelligence community.

“There is still debate about whether it is ticking all the boxes ... whether security is swamping the immigration side,” they said.

Says the intelligence insider: “Pez would have a restructure regularly and that would leave people in the rest of the government scratching their heads. He tends to promote people who are loyalists.

“He does have a reputation of getting things done, namely Operation Sovereign Borders. But there have also been a lot of failures on his watch.

“He is not greatly loved. Sometimes respected but not greatly loved.”

License article

READ MORE

• Public service
• Michael Pezzullo
• Immigration
• Perspective
• AFR Weekend

Andrew TillettForeign affairs, defence correspondentAndrew Tillett writes on politics, foreign affairs, defence and security from the Canberra press gallery. Connect with Andrew on Facebook and Twitter. Email Andrew at andrew.tillett@afr.com

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Behind the Scenes at ‘Have I Been Pwned’

Via Slashdot and contributor slincolne [the link is behind a paywall]: “The founder of the data-breach notification site Have I Been Pwned manages “the largest known repository of stolen data on the planet,” reports Australia’s public broadcaster ABC, including over 6 billion email address. 

Yet with no employees, Troy Hunt manages all of the technical and operational aspects single-handedly, and “has ended up playing an oddly central role in global cybersecurity.” Troy is very careful with how he handles what he finds. He only collects (and encrypts) the mobile numbers, emails and passwords that he finds in the breaches, discarding the victims’ names, physical addresses, bank details and other sensitive information. The idea is to let users find out where their data has been leaked from, but without exposing them to further risk. Once he identifies where a data breach has occurred, Troy also contacts the organisation responsible to allow it to inform its users before he does. 

This, he says, is often the hardest step of the process because he has to convince them it’s legitimate and not some kind of scam itself. He’s not required to give organisations this opportunity, much less persist when they ignore his messages or accuse him of trying to shake them down for money. But there’s evidence that this approach is working. Despite the legal grey area he has operated in for a decade now, he’s avoided being sued by any of the organisations responsible for the 705 breaches that are now searchable on Have I Been Pwned. These days, major tech companies like Mozilla and 1Password use Have I Been Pwned, and Troy likes to point out that dozens of national governments and law enforcement agencies also partner with his service…

 “He’s not a company that’s audited. He’s just a dude on the web,” says Jane Andrew, an expert on data breaches at the University of Sydney. “I think it’s so shocking that this is where we find out information about ourselves. She says governments and law enforcement have, in general, left it to individuals to deal with the fallout from data breaches… Without an effective global regulator, Professor Andrew says, a crucial part of the world’s cybersecurity infrastructure is left to rely on the goodwill of this one man on the Gold Coast.”