http://www.theage.com.au/victoria/firefighter-union-deal-could-cost-almost-700-million-leaked-documents-20160806-gqmmli.html
Firefighter union deal could cost almost $700 million: leaked documents
Farrah Tomazin
Daniel Andrews' contentious deal with the militant firefighters' union could end up costing taxpayers nearly $700 million, with leaked documents suggesting the Premier may have misled Parliament – and the public – about the true price of the agreement.
Victoria's financial watchdog will be called to investigate, after Fairfax Media obtained figures estimating that the cost of the industrial deal could be in the order of at least $663 million – dramatically higher than the $160 million figure previously cited by Mr Andrews, Treasurer Tim Pallas and Emergency Services Minister James Merlino.
Voluntary and paid CFA members with Premier Daniel Andrews and Emergency Services Minister James Merlino in June.
Voluntary and paid CFA members with Premier Daniel Andrews and Emergency Services Minister James Merlino in June. Photo: Penny Stephens
The indicative price tag is contained in a document crunched by the CFA's current chief financial officer, Nigel McCormick, and although it makes clear that the figure is by no means "final" it is nonetheless consistent with the numbers that have been previously been put to the Fair Work Commission, Treasury officials, and the office of the former emergency services minister, Jane Garrett.
And while the government disputes the data, the massive discrepancy with its own figures could prove damaging for Mr Andrews, whose economic credibility had already been dented after repeatedly claiming that the East West Link contract would "not be worth the paper it's written on".
"The brazen way in which Daniel Andrews and his government lies to Victorians is astounding," said Opposition Leader Matthew Guy. "How can you trust someone who lies about a $1 billion East West Link payment? How can you trust someone who lies about the future of the CFA board? How can you trust someone who lies about the cost of new firefighters? This Premier simply hopes nobody will notice."
The numbers obtained by Fairfax Media formed part of a flurry of exchanges between the CFA and the Department of Treasury and the Department of Justice and Regulation in June – a few weeks before Mr Andrews was asked by the Liberals during question time on June 23 if he could "guarantee that the total cost of this EBA will not exceed $160 million over four years, as your government has claimed".
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"I thank the member for South West Coast for her question; the answer to her question is yes," the Premier replied.
Mr Pallas is also on the record saying the cost will be about $160 million over four years, while Mr Merlino backed the same figure in an interview with The Sunday Age last week.
The opposition will write to the Auditor-General this week calling for a financial probe to get to the bottom of the deal, and is also considering a censure motion against Mr Andrews for potentially misleading the Parliament.
However, on Saturday, the government insisted that the figures obtained by Fairfax Media were wrong and "based on false assumptions", although it did not provide, as requested, a full breakdown explaining its own $160 million costing, which supposedly takes into account salary, conditions and allowances under the proposed agreement, above indexation.
"The Department of Treasury and Finance's costings have undergone rigorous financial analysis and there is adequate provision for the EBA within the budget," Mr Merlino said.
The stoush over the cost of the EBA is the latest development in what has arguably been the messiest industrial dispute to hit Spring Street in years.
Within a few months, the dispute has resulted in the sacking of the entire CFA board, the departure of its chief executive and chief fire officer, and the forced resignation of Ms Garrett, who had repeatedly said the deal was too expensive and gave too much power to the United Firefighters Union and its controversial boss, Peter Marshall.
It emerged on Friday that in the heat of negotiations, Mr Marshall had allegedly once threatened to put an axe through Ms Garrett's head – claims that the state secretary has categorically denied.
A CFA spokeswoman said the figures obtained by Fairfax Media had since changed – "as they relate to a previous version of the enterprise agreement" – but she could not provide an updated figure. However well-placed sources say the new proposed agreement is only moderately different from the previous version, and that the costs could be even higher because they do not take into account Labor's election promise for hundreds of extra firefighters, which insiders say could be in the order of $500 million.
The government's $160 million costing was also announced around the same time the CFA's $663 million figure was crunched - in early June.
"CFA is continuing to work through the proposed agreement and associated costs, and is working closely with Treasury to ensure CFA is appropriately funded over the life of the agreement," the spokeswoman said.
http://www.theage.com.au/victoria/andrews-dismisses-claims-cfa-pay-deal-could-cost-700-million-as-wrong-20160807-gqmtmw.html
Andrews dismisses claims CFA pay deal could cost $700 million as wrong
Josh Gordon
Premier Daniel Andrews has dismissed claims his wage deal with the firefighters union could cost almost $700 million, claiming it is based on old information, politically motivated and wrong.
Mr Andrews is standing by his earlier assertion before Parliament - based on calculations by the Department of Treasury and Finance - that the industrial deal will cost no more than $160 million over four years.
Premier Daniel Andrews has dismissed cost claims on the wage deal.
Premier Daniel Andrews has dismissed cost claims on the wage deal.
The Sunday Age reported that the cost of the industrial deal could be in the order of at least $663 million, an estimate made by the CFA's current chief financial officer, Nigel McCormick.
The opposition has promised to write to the Auditor-General this week and call for an inquiry into the deal, amid claims Mr Andrews could have misled Parliament over the true cost of the agreement.
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In further comments aimed at the beleaguered public agency, Mr Andrews on Sunday suggested the estimate was politically motivated, out of date, and based on incorrect assumptions.
"Other estimates that do not relate to the current agreement, they are two or three or five drafts ago, with all sorts of assumptions that don't stack up - well the government won't be relying on those estimates, they are wrong and the CFA have overnight confirmed that," Mr Andrews said.
Public sector enterprise agreements in Victoria are typically costed by the Department of Treasury and Finance. After taking out normal wage indexation costs, the department estimated the contentious deal would cost $160 million over four years, including extra salary, conditions, and allowances.
The budget has also already set aside money for additional firefighters.
Shadow attorney-general John Pesutto, a former industrial relations adviser in the previous Napthine government, said he found it "impossible to accept" that the deal with the United Firefighters Union could only cost $160 million, given the generous conditions built into agreement.
"It is not just me, the former chair of the CFA [John Peberdy] has said that the deal will cost a lot more than that," Mr Pesutto said. "Only the Auditor-General is independent enough to be able to acquire those documents, including the Treasury [documents] which are the costings to fully enlighten Victorians about just what is going on here."
Some government MPs are now starting to question how the issue will end. The dispute has already resulted in a raft of high-profile resignations and sackings, most recently the chief fire officer Joe Buffone.
It follows reports last week that UFU secretary Peter Marshall allegedly once threatened to put an axe through former Victorian emergency services minister Jane Garrett's head, a claim that the state secretary has strenuously denied.
Asked about the claim on Sunday, Mr Andrews said: "If anybody feels that they have been badly treated then there are all sorts of options available to them.
"There will be reports about all sorts of different incidents but I really can't comment beyond that and I have not had an opportunity to speak with Jane [Garrett] about those things. I'll see her when I get back to Parliament, I'm sure."
It will be a big week or two for Dan Andrews. If the overall cost is well above the $160,000,000 shown in time his government will become terminal.
