Andrew Southcott (Boothby, Liberal Party) Share this | Hansard source

In speaking on the Public Governance, Performance and Accountability Amendment Bill 2014, I just want to draw to the attention of the House that the Joint Committee of Public Accounts and Audit has recently completed an inquiry into the rules of the PGPA Act. In the previous parliament the committee held an inquiry into the draft bill.

The act will come into force on 1 July 2014. It replaces the CAC and FMA Acts. It has enormous breadth. It covers all government departments; research organisations, such as the GRDC, CSIRO, the Australian War Memorial; and all Commonwealth-corporate entities—all agencies that have previously been under the CAC or FMA regime.

I would, firstly, like to commend the Department of Finance on their initial consultation for the first set of rules. The feedback that the committee heard was that the consultation had been good and that was the conclusion the committee came to. We encourage the Department of Finance to continue in the same way for the next set of rules and I would also like to commend them for driving this significant reform.

In looking at the rules, the committee made 10 recommendations. The report was tabled in budget week. I am pleased to say that, in the interim, I have had contact with the office of the Minister for Finance. I would like to thank the Minister for Finance, Senator Mathias Cormann, his office, and particularly Daniel Clode, for the prompt way in which they have worked to address and accommodate the committee's recommendations. I would also like to thank the member for Riverina, Parliamentary Secretary to the Minister for Finance, for his assistance on the bill and the government amendments. There is a tight time frame for this new regime, which commences at the beginning of next month. However, the committee did receive evidence from the Auditor-General that there was little risk that agencies would be unable to comply with the requirements by 1 July. Most of them are already set up for this.

I would like to focus on several of the recommendations. The committee recommended that an additional guiding principle should be added to the public management reform agenda. It recommended the guiding principle be:

… the financial framework, including the rules and supporting policy and guidance, should support the legitimate requirements of the government and the parliament in discharging their respective responsibilities.

The committee also sought an amendment to the Auditor-General Act to confirm that the ANAO has the power to audit under the new act. There was a recommendation which sought to clarify that chairs, chief executives and chief financial officers of Commonwealth bodies can attend audit committees as an observer.

Of the 10 recommendations, there was one very substantial recommendation on which we took extensive evidence on and I want to focus on that. It is the issue of proper use. In the public hearing into the rules we took extensive evidence from both the Department of Finance and the ANAO on the draft rule regarding approving commitments of relevant money. Both those eminent bodies had differing views on this. At present, under the FMA Act an official must satisfy themselves that a proposed commitment of relevant money represents 'proper use' of money. This is not in the current proposed rule.

The issues raised by the Auditor-General regarding the controls around commitments of relevant money were regarded by the committee as concerning. The Auditor-General commented that the proposed approach is a 'substantive departure from existing obligations' for non-corporate Commonwealth entities. He continued that the requirement to explicitly consider proper use is 'not an onerous requirement but it is a requirement that has protected the interests of government and the parliament for a long period of time'.

In the committee's report they said:

On balance, and due to the significance of this issue, the committee is therefore of the opinion that the draft rule should be amended to explicitly place an obligation on all individual officials to consider proper use before approving a commitment of relevant money while allowing an accountable authority the freedom to establish internal controls appropriate to its operating environment.

Of the 10 recommendations that is one that we gave a lot of consideration to and the committee in a unanimous report did feel that 'proper use' did need to be in the draft rule.

They are my comments. The committee will have an ongoing interest in this act. There is more to come on key performance indicators and a performance framework for the Public Service and there will also be reviews that will be initiated under this legislation, and so the committee will have an ongoing interest in this. I commend the bill. The committee was very supportive of the bill and the principles of reform. I commend the consultation from the Department of Finance and also commend the minister, his office and the Parliamentary Secretary for Finance for their very prompt attention in the committee's recommendations.

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