When Finance Minister Mathias Cormann announced last December that one company would take over as the government’s sole travel manager from this July, replacing a panel of five, it was all about streamlining processes and reducing costs.
The four-year $66 million contract for the successful company, QBT, to provide travel services worth about $2.1 billion to 150 different government agencies and departments was reportedly the biggest such deal in the country. The Australian Financial Review wrote that it eclipsed travel contracts with corporate giants BHP Billiton and Rio Tinto.
The Department of Finance has in the past week dismissed Labor concerns about the rigour of its inquiry into the speaker’s helicopter flight.
But just one month into the new regime, the government is facing a taxpayer-funded travel fiasco that would dwarf Bronwyn Bishop’s expenses. The Department of Finance, which is investigating her $5227 helicopter ride from Melbourne to a Liberal Party fundraiser in Geelong, is also understood to be locked in sensitive negotiations with QBT over the fate of tens of millions of dollars of travel credits. The credits are granted instead of refunds when flight bookings are cancelled, but they must be used within a year of being generated.
The Saturday Paper understands that travel managers in a number of departments are frustrated that credits, generated on their budgets in dealings with the companies that previously organised their flights, are not being recognised by QBT. Yet QBT is the only company that can now book their travel.
If the stand-off is not resolved, the value of these credits will be forfeited to the airlines.
The Department of Finance will not reveal the value of these tickets in credit, but did confirm it was in talks with QBT.
The department did not deny there were problems with QBT accepting the credits held by the four other companies: American Express Global Business Travel, Carlson Wagonlit Travel, Flight Centre’s FCm Travel Solutions and Hogg Robinson Australia. It clearly hopes the issue can be resolved.
“Consistent with industry practice when transitioning to new travel management arrangements, the Department of Finance is working with QBT, airlines and former travel management companies to obtain refunds for applicable tickets or to use credits for future air travel,” a departmental spokeswoman said.
A spokeswoman for Cormann said the talks with QBT and the other travel companies were “still in progress” and the value of the tickets in credit would not be forfeited.
But The Saturday Paper understands there is anger in other departments that Finance did not resolve the issue before QBT started as the government’s sole travel provider. Announcing the contract in December, Cormann said the transition to the new provider would start immediately and it would be “fully operational” by July 1. His spokeswoman said that objective had been achieved and agencies were already making bookings under the new travel management arrangement.
A QBT spokeswoman said the contract with the government was private and it could not discuss the details, referring The Saturday Paper back to the Department of Finance.
The management of tickets in credit is a perennial issue for the Department of Finance, which has in the past urged government travel managers to remember to use these credits when making bookings, rather than paying for a whole new flight.
Nevertheless, their value is often lost. Each month, the former government travel management companies were required to report how many tickets in credit had been accrued, used, expired and forfeited.
“The Travel Contract Management Section is aware that a number of agencies have a considerable quantity of Tickets in Credit and unclaimed refundable fares,” said one such reminder from the department in January 2013.
“Please be aware that these fares will expire after a period of 12 months from booking date and the value of the fare is forfeited to the airline.”
Now QBT’s reluctance to accept the credits from other companies has vexed departments, which are trying to do the right thing and follow this advice.
Independent Senator Nick Xenophon, who makes a virtue of his frugality, flying economy and staying in budget hotels, says it would be extraordinary if the value of the credits was lost.
“Surely this government, which prides itself on efficiency and value-for-money for taxpayers, would insist on those credits being used by the new travel company,” he says. “It must be a condition of any transfer of accounts.”
It would be ironic if the shift to one travel management company led to significant waste, as it is part of a broader push that started under former Labor finance minister Lindsay Tanner in 2010 to slash spending on government travel, then worth an annual $500 million. The idea was to use the government’s collective buying power to secure a better deal for taxpayers.
Department of Finance documents show that, in 2013-14, the government spent $377 million on flights, involving 1.34 million bookings for about 100,000 travellers.
The most common domestic route was Sydney to Canberra, followed by Melbourne to Canberra. Australia’s offshore detention centres seem to generate the most international travel, accounting for four of the top 10 international routes: Perth to Christmas Island, Port Moresby to Manus Island, Brisbane to Port Moresby and Cairns to Port Moresby.
The four-year $66 million contract for the successful company, QBT, to provide travel services worth about $2.1 billion to 150 different government agencies and departments was reportedly the biggest such deal in the country. The Australian Financial Review wrote that it eclipsed travel contracts with corporate giants BHP Billiton and Rio Tinto.
The Department of Finance has in the past week dismissed Labor concerns about the rigour of its inquiry into the speaker’s helicopter flight.
But just one month into the new regime, the government is facing a taxpayer-funded travel fiasco that would dwarf Bronwyn Bishop’s expenses. The Department of Finance, which is investigating her $5227 helicopter ride from Melbourne to a Liberal Party fundraiser in Geelong, is also understood to be locked in sensitive negotiations with QBT over the fate of tens of millions of dollars of travel credits. The credits are granted instead of refunds when flight bookings are cancelled, but they must be used within a year of being generated.
The Saturday Paper understands that travel managers in a number of departments are frustrated that credits, generated on their budgets in dealings with the companies that previously organised their flights, are not being recognised by QBT. Yet QBT is the only company that can now book their travel.
If the stand-off is not resolved, the value of these credits will be forfeited to the airlines.
The Department of Finance will not reveal the value of these tickets in credit, but did confirm it was in talks with QBT.
The department did not deny there were problems with QBT accepting the credits held by the four other companies: American Express Global Business Travel, Carlson Wagonlit Travel, Flight Centre’s FCm Travel Solutions and Hogg Robinson Australia. It clearly hopes the issue can be resolved.
“Consistent with industry practice when transitioning to new travel management arrangements, the Department of Finance is working with QBT, airlines and former travel management companies to obtain refunds for applicable tickets or to use credits for future air travel,” a departmental spokeswoman said.
A spokeswoman for Cormann said the talks with QBT and the other travel companies were “still in progress” and the value of the tickets in credit would not be forfeited.
But The Saturday Paper understands there is anger in other departments that Finance did not resolve the issue before QBT started as the government’s sole travel provider. Announcing the contract in December, Cormann said the transition to the new provider would start immediately and it would be “fully operational” by July 1. His spokeswoman said that objective had been achieved and agencies were already making bookings under the new travel management arrangement.
A QBT spokeswoman said the contract with the government was private and it could not discuss the details, referring The Saturday Paper back to the Department of Finance.
The management of tickets in credit is a perennial issue for the Department of Finance, which has in the past urged government travel managers to remember to use these credits when making bookings, rather than paying for a whole new flight.
Nevertheless, their value is often lost. Each month, the former government travel management companies were required to report how many tickets in credit had been accrued, used, expired and forfeited.
“The Travel Contract Management Section is aware that a number of agencies have a considerable quantity of Tickets in Credit and unclaimed refundable fares,” said one such reminder from the department in January 2013.
“Please be aware that these fares will expire after a period of 12 months from booking date and the value of the fare is forfeited to the airline.”
Now QBT’s reluctance to accept the credits from other companies has vexed departments, which are trying to do the right thing and follow this advice.
Independent Senator Nick Xenophon, who makes a virtue of his frugality, flying economy and staying in budget hotels, says it would be extraordinary if the value of the credits was lost.
“Surely this government, which prides itself on efficiency and value-for-money for taxpayers, would insist on those credits being used by the new travel company,” he says. “It must be a condition of any transfer of accounts.”
It would be ironic if the shift to one travel management company led to significant waste, as it is part of a broader push that started under former Labor finance minister Lindsay Tanner in 2010 to slash spending on government travel, then worth an annual $500 million. The idea was to use the government’s collective buying power to secure a better deal for taxpayers.
Department of Finance documents show that, in 2013-14, the government spent $377 million on flights, involving 1.34 million bookings for about 100,000 travellers.
The most common domestic route was Sydney to Canberra, followed by Melbourne to Canberra. Australia’s offshore detention centres seem to generate the most international travel, accounting for four of the top 10 international routes: Perth to Christmas Island, Port Moresby to Manus Island, Brisbane to Port Moresby and Cairns to Port Moresby.
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