It is, at the very least, arguable that consultants have become toxic weeds in business and government in Australia.
The recent case where Allianz caused Ernst and Young to re-write a supposed independent report is just one example of what is happening and, of course, most of it never sees the light of day.
However, it is probable that it is in the government area where it has become most toxic. Consulting firms are now so dependent on government revenues that they have become captive of government ambitions. Any attempt to provide a contrary report to government seeking “independent” support for decisions is likely to lead to much less or no government business for them in the future.
Recently the NSW Auditor-General was just so right to question and criticize the role and costs of consultants to government. NSW is probably the greatest offender. It reached epidemic proportion under Baird who must qualify as one of the worst premiers in history. His thought-bubble and consultant – backed decisions involved disasters such as council amalgamations, greyhound racing, Powerhouse museum wrecking, Sydney Modern and various infrastructure projects, which have proven to be disastrous from a costing perspective. (And now he is apparently to be rewarded by becoming CEO of the NAB. How appropriate!). While Berejeklian has back flipped on some of his polices she persists with many of the disasters.
The same applies in many respects to business. Company boards now tend to seek “independent” advice on, say, chief executive salaries. The consultants know that they will get no further business from the CEO if they come in at a low level. They know there is no risk to erring on the upside and only pain for taking the downside so they finish puffing up his/her salary which has led to ridiculous levels of CEO salaries and bonuses.
The most extraordinary bad move, of which I have some personal knowledge, is the Baird thought-bubble decision to shift the Powerhouse Museum to Parramatta. Unusually, as far as we can gather no museum experts were consulted at the time—nor have they been since. The Powerhouse is a treasure in an appropriate precinct accessible to all.
The proposal is to shift it to a flood prone site on the Parramatta River. There has been no consideration of what sort of art establishment would best suit Parramatta and regional museums and art galleries are busted. Further, the experts tell us that it will be impossible to shift and display many of the most iconic in the museum collection—and many, such as the invaluable Bolten and Watt steam engine, are likely to be irreparably damaged in any attempt at transfer. The old Powerhouse building, shaped and reconfigured by the Wran government (and a monument to Neville Wran) is also a treasure and threatened to become just another development site. The costs have blown out from the early estimates $200-plus million to $1.25 billion, and many believe this will blow much further. Berejeklian and her arts minister, Harwin, have proven ridiculously unreceptive to listen to experts and alternatives. Thank goodness the government is unlikely to make a major move on this till after the next election.
The whole thing makes a joke of the armies of bureaucrats in government and business who are paid to enable decisions to be made.
Trevor Kennedy, a former media executive, is a non-executive director of a number of companies, an investor and farms cattle and oysters.