Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Hansard source

I rise today to speak on the Financial Framework Legislation Amendment Bill (No.1) 2012. This bill seeks to amend four acts and repeal two acts across three portfolios. It is part of an ongoing program of updating and enhancing the Commonwealth's financial framework. This is the ninth financial framework legislation amendment bill since 2004. These bills generally seek to correct misdescribed provisions, add clarity where required and enhance acts to make them consistent with complementary legislation. They also seek to repeal redundant components of the financial framework, such as prior programs that have expired.

Schedule 1 seeks to amend the Auditor-General Act 1997 to clarify that the Auditor-General may accept an appointment under the Corporations Act 2001 as the auditor of any company that the Commonwealth controls. This will align the act with the definitions of Commonwealth control which were made in 2008 for the Commonwealth Authorities and Companies Act 2007. We of course support this amendment.

There is though, in my view, a case for placing stronger obligations on government departments and agencies, including the minister's own department, to more strictly adhere to the Commonwealth Procurement Guidelines. We are seeing far too many instances where guidelines are being flouted. That is not conducive to achieving best value outcomes. To this end, I wrote some time ago to the Auditor-General of Australia, Mr McPhee, to seek some clarity on just what is happening with regard to the purchase of property and services, the whole procurement process and the efficiency of that process, and to ascertain whether we as a community are seeing the government and its agencies doing things in a way which best meets the responsibilities they have to handle public moneys. As part of his response the Auditor-General says:

Your letter also sought advice on whether further reform of procurement could provide savings of 5 to 10 per cent over the forward estimates without compromising the standard of property and services purchased by the Commonwealth.

He goes on:

Because our audit was only focused on direct sourcing and whether agencies were adhering to the CPGs, we did not seek to quantify the potential saving that could be achieved.

He says, though:

Nevertheless, our audit work indicates that better value for money outcomes could be achieved through improvements to the procurement practices.

He talks about the fact that direct source procurement, which may include a competitive process, accounted for 43 per cent or $10.2 billion of the total reported value of contracts for the calendar year. But among the key findings of the audit was a 'lack of documentation' of agencies' value-for-money considerations for 74 per cent of the audit sample of direct source procurements, that agencies 'did not seek multiple quotes' in 85 per cent of the direct source procurements examined and that agencies could not consistently ensure that covered 'direct source procurements examined met the limited circumstances' in the Commonwealth Procurement Guidelines which permit direct sourcing. For the Auditor-General to use this language, to be this direct and to record such significant, in my view, oversights in the procurement process suggests an area of spending that is just startling. We are talking about a contract worth $23.5 billion, and in 74 per cent of the audit sample there was a lack of documentation on how they could show value for money out of that process. I have run public companies. If you took to a board proposals for capital expenditure of sums much smaller than this which did not convince the board of a value-for-money outcome, you would not be in a job long. Yet here we have startling results from the piece of work done by the Auditor-General and, when I raised it with the government, I got a perfunctory response—no response, really, of any consequence; just politics. It is a legitimate question. We are here as an opposition to ensure the accountability of governments. An Auditor-General is prepared to write back to me and report those sorts of findings, and the minister for finance treats it as just a political act by me. It is unacceptable and it does reflect, I think, mismanagement on a much wider scale or bad supervision by a minister on a much wider scale.

It helps explain the waste that the community understands that this government has become a symbol of. This government's waste, debt and deficits have become, I think, a matter of great embarrassment to this community. It is one of the reasons we got 750,000 more votes than the Labor Party at the last election, in spite of being the first—

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