Shayne Neumann (Blair, Australian Labor Party) Share this | Hansard source

It is terrific that people come from all parts of this country to this House, from all states and territories, from all different kinds of professions—farmers, unionists, schoolteachers, lawyers, police officers—and from all manner of backgrounds. We have had some distinguished police officers who have served this parliament. The current Minister for Ageing is a former police officer and my former federal member, the Hon. Bill Hayden, was a former copper, as he would put it. I had the pleasure recently of having lunch with him in Gatton, honouring a wonderful communitarian in my electorate, Herb Olm, whose grandson works for me and who is the oldest and longest-serving Labor Party member in the country at 100 years of age. Bill talked to that meeting about his background. But it is a bit rich that the member for Dickson, a former police officer, should lecture those on this side of the House, many of whom have extensive business experience.

I speak in support of this legislation, the Financial Framework Legislation Amendment Bill 2008. This bill is about transparency, openness and good governance. It is what small business expect. As a former small business operator myself, I know it is a challenge to run a small business. Small business operators in this country and the public at large expect government to be run well, and this legislation is about better governance in this country. I spoke, as the member for Isaacs did, in relation to the Commonwealth Authorities and Companies Amendment Bill 2008 earlier this year. The legislation that we have before us today is about aligning the legislation and the kind of governance we have in this country, particularly with respect to outsiders—non-Commonwealth entities—and also with respect to Commonwealth entities.

The governing legislation being amended is the Financial Management and Accountability Act 1997. The bill before us today amends that act and a number of others, including the Albury-Wodonga Development Act 1973, the Public Service Act 1999 and the Reserve Bank Act 1959. In this area there have been a number of amending pieces of legislation passed since 2004, all of them designed to clarify, simplify and make better use of public administration and public moneys in this country. This bill purports to do the same, as well as reducing red tape in relation to governance and reporting.

Some of the provisions in this bill are akin to those of the Statute Law Revision Bill which this House uncontroversially passed earlier this year. There are corrections which are quite minor in relation to dates and parentheses but also some which are quite substantive. I will not touch on the Albury-Wodonga Development Act legislation amendments, as the member for Isaacs has already dealt with those as well.

The Minister for Finance and Deregulation said in his second reading speech on 26 June 2008 that this bill will reduce red tape in the administration of about 100 agencies which are governed by the Financial Management and Accountability Act, including 19 departments and a whole host of differing statutory and executive agencies. I agree with the final comments in the minister’s speech, where, referring to this bill and the amendments in the Commonwealth Authorities and Companies Act 1997, which was introduced in this House on 13 February 2008, he said:

Overall, this work demonstrates the government’s ongoing commitment to deregulation, where appropriate, of the financial framework, while optimising the accountability and transparency of the operations of government generally.

And that is what the public expect. They expect good governance, open government and better use of public moneys and better public administration. Certainly when I do the many mobile offices that I conduct in my electorate people talk to me about a whole range of issues, but they want value for their dollar. They want the Public Service to work well, efficiently and effectively. I must say that in this country we have been well served by a wonderful pillar of our community, the Public Service. But this is about making the system run better.

I want to concentrate on a few of the reforms in this bill. The first one I want to concentrate on is a curious expression called ‘outsiders’, which can be found in a new section, section 12, of the legislation. It is a very odd way to put it, but ‘outsiders’ are defined as:

… any person other than the Commonwealth, an official or a Minister.

In essence, an outsider is a non-Common-wealth entity. This amendment will permit an outsider to make payments of public money where the agreement or arrangement engaging them is authorised by parliament or the finance minister. This is going to help other third parties who contract with government as well as contractors and trustees which handle money. It will allow an outsider to, for instance, deduct authorised fees before sending the balance to the Commonwealth. This is not now the case. So this form is both practical and deregulatory in its focus.

The next reform I want to concentrate on is a change to section 44 of the Financial Amendment and Accountability Act, which concerns chief executives and the proper use of Commonwealth resources. The bill adds a note to section 44, to this effect:

A Chief Executive has the power to enter into contracts, on behalf of the Commonwealth, in relation to the affairs of the Agency.

We have done this a lot, both at state and federal levels—adding notes to explain legislation. I think it has been a wonderful initiative over the last few decades. This particular note clarifies and explains section 44(1) of the act, which affords the chief executive of the agency an implied capacity to enter contracts and which imposes on the chief executive the obligation to promote the proper use of Commonwealth resources. In practice, this power is actually delegated or authorised by the chief executive to a subordinate official of the agency, usually under section 53 of the legislation. This is the case even though the power and capacity to contract, lease or license mirrors that of the minister in whom the executive power of the Commonwealth vests.

The third reform in this bill which I want to refer to is the additional requirement concerning the proper use of Commonwealth resources. Under section 44(1) of the FMA Act, the ‘proper use’ must be efficient, effective and ethical. But now, under this amending legislation, it must not be ‘inconsistent with the policies of the Commonwealth’. I think the public would be surprised that that is not actually in the existing legislation. That is not the same as ‘in accordance with Commonwealth policy’, so there is a degree of flexibility there, and it is less prescriptive in its tone. It recognises the situational and contextual aspects of, say, procurement. This ensures decisions can be taken into account but must be looked at in the context of current Commonwealth government policies.

I want to make it plain: in my reading of the legislation—and I have read it thoroughly—this bill is not about reducing the independence of chief executives, for example the Auditor-General and the Ombudsman, who have legislative independence that is longstanding. But I do think the public, certainly the public in my electorate of Blair, want the Public Service to act consistently with the policies of the democratically elected government of the day.

The fourth point I want to make relates to new section 44A in this amendment bill. This amendment effectively is the same as the operational procedures under the Commonwealth Authorities and Companies Act in terms of the amendments we made to it earlier this year. It aligns the Financial Management and Accountability Act with the CAC Act. It means a chief executive must:

(a) give the Minister responsible for the Agency such reports, documents and information in relation to the operations of the Agency as that Minister requires; and

(b) give the Finance Minister such reports, documents and information in relation to the financial affairs of the Agency as that Minister requires.

Further, it makes it very plain that the chief executive must comply with a requirement concerning time limits set by the minister. Finally, the section does not limit any power that a minister has to require such information.

I think this is a good provision. It makes the Public Service and those entities governed by this particular legislation more accountable to the government of the day, and I think that is a good thing.

I want to talk about the audit committee requirements found in new section 46. This clause takes away the requirement for the finance minister’s orders to address the audit committee requirements and instead sets out the functions of an audit committee. The amendment allows for regulations to prescribe the composition of such committees and, again, is consistent with the Commonwealth Authorities and Companies Act 1997. The actual provisions, as I said, are found in new section 46, which is very clear. It says:

(1) A Chief Executive must establish and maintain an audit committee with functions that include:

(a) helping the Agency to comply with obligations under this Act, the regulations and Finance Minister’s Orders; and

(b) providing a forum for communication between the Chief Executive, the senior managers of the Agency and the internal and external auditors of the Agency.

In summary, this bill is about good governance, as the member for Isaacs said. It is about openness and transparency in government. It provides for auditing and an audit committee. It simplifies procedures concerning the use of public moneys and makes it clear that Commonwealth resources must be used properly, efficiently, effectively and ethically but not in ways inconsistent with the policies set out by the Commonwealth government of the day. It is this executive and this parliament that are accountable to the Australian people, not the Public Service, and it is this executive and this parliament that must determine how Commonwealth resources are used. Who should contract, who should lease, who should license and other arrangements must be determined by the government of the day. These powers must be used wisely in the public interest and with express authority, and not in some messy arrangement that is muddled and uncertain. That authority must be given by legislation or regulation. The Australian public deserve no less and they expect no less. This bill is an important part of the Rudd government’s good governance policy. I think it will ensure that public administration of this country functions more effectively. That is good for my electorate, good for my state and, I believe, good for the nation. I commend the bill to the House.

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