Julian Hill (Bruce, Australian Labor Party) Share this | Hansard source

I seek leave to make a short statement of maybe 10 minutes—we'll see how quickly someone else gets here—given I tabled the report.

Leave granted.

This is in one sense a dry report. It's not going to win any prizes for scintillating, stimulating reading—indeed, if one couldn't find a cup of chamomile tea or something stronger and had trouble sleeping, there'd be parts of this kind of report that could assist! But I think it is important that at least a short debate does occur in the Federation Chamber and that the parliament does pay some level of attention to this kind of work. It's a bit old fashioned, I know. I'm a conservative in that regard. Who knew? The work of the Joint Committee of Public Accounts and Audit is an important part of the work of the parliament. The committee has been in existence in one form or another since about 1911 or 1913, soon after Federation. It's one of the few committees of the parliament that exist by virtue of statute. It has significant powers and can initiate its own inquiries. It also has some clear statutory responsibilities, including to formally consider each and all of the Auditor-General's reports.

As part of the Auditor-General's annual work program, he conducts a formal report into the Commonwealth's financial statements. In effect, that's an assurance audit looking over all 246 entities. Importantly, and quite rewardingly, actually, for those of us on the committee—as you heard from the previous speaker, who's a member of the committee—this is generally conducted in a bipartisan fashion. Sure, we'll have our roles and we'll probe and prod and so on, and have a bit of fun along the way, but there's a very strong tradition for over 100 years of having just about all of the reports from this committee signed off and agreed by all members. Part of the fun of being an opposition member on that committee is that you get a bit of latitude to craft the words and negotiate them as long as you've got the evidence.

There were, as has been said, 245 findings by the Auditor-General conveyed back to agencies. Four were significant, 32 were moderate and 209 were minor findings. As you would expect, in its public hearings deliberations and the report the committee has paid particular attention to the significant and moderate findings. I'll turn my comments to two or three of those.

Firstly, to pick up on the remarks of the member for Bass and the previous speaker around the topic of senior executive salary disclosure: we spent quite some time on that matter during the public hearing. Somewhat surprisingly, actually, it turned out to be a little harder than it really should have been and occupied a fair part of the report. Put quite simply, under the previous Labor government, there's a thing called the financial reporting rule. It's, again, very dry. The finance minister is the custodian of this rule—this regulation; this requirement—imposed on all agencies and entities. Senator Penny Wong, when she was the Minister for Finance and Deregulation in the Labor government, signed the most recent version. It had a pretty simple requirement for transparency: that all entities and agencies, corporate and non-corporate—departments are non-corporate but there are corporatised entities with boards and so on—had to disclose their senior executive remuneration in their public documents by band. If you look at departments you can see, as with ASX listed companies, how many people are paid at this, that and the other level. We, or at least the Labor members, have felt consistently that that level of transparency has a range of benefits and is important to public confidence, maintaining scrutiny on decisions of boards and so on.

Unfortunately, this requirement was watered down in subsequent instruments signed by the current Minister for Finance, Senator Cormann. It had been suggested to us throughout, in a bit of tricky wording, I guess, by various presenters to the committee and submissions that this was only a result of aligning the requirements in the financial reporting rule with externally imposed accounting standards and the Australian Accounting Standards Board. That all kind of makes sense. It was a noble endeavour to simplify and streamline and align the requirements with accounting standards—that's fine. But it missed a couple of things, and I took time to go back to the explanatory memorandum—again, a non-fascinating document but an important one—that accompanied the tabling of the revised financial reporting rule. It was very clear in that explanatory memorandum. It wasn't just, 'Oh, well, we'll align it with the accounting standards—oh, we made a mistake; look, they kind of bundled them up', but that the impact of this change would remove that level of transparency by band. So, instead of being able to see who was paid $300,000, who was paid half a million and who was paid $2 million in that top echelon, how much we spend on executives was just aggregated into one big lump.

It was also suggested, 'Oh, well, we've kind of got to go with the standards,' which is a nonsense. The parliament and the government have every right to impose whatever transparency and accountability requirements we want on the public sector. Of course it's good, by default, to align them with externally imposed standards. That makes sense; it's easy. Staff understand that they can look them up and be trained, but there are particular needs for the public sector. Public confidence is important. Transparency is important. It has a higher value in the public sector—dare I say, quite rightly—than in the private sector. We feel that it was a mistake to do this.

It became a matter of some public controversy due to the Senate estimates circus around the Australia Post CEO's salary, and then there were a series of fishing expeditions—which would not have had to have happened had the previous Labor government's rule around transparency been in place—to figure out by band what other agencies were paying. During the inquiry, we thought, 'This is pretty straightforward. Let's ask the finance department for the impact of this and how many agencies it applies to.' We got one of those Sir Humphrey-style gobbledegook series of responses which made no sense. Eventually we got enough, I guess, to make a clear recommendation—which I'm pleased the committee signed up to unanimously in a bipartisan fashion—that, in effect, the government should just change the rule back by a regulation to what the previous Labor government had and restore transparency in senior executive salary disclosure.

Along the way, as has been pointed out, and we did dot-point this in the report, there was a series of coincidences—I think some of them were Deirdre Chambers-style coincidences—where the finance minister wrote to some GBEs and said they had to disclose their salaries. Then when we raised it in the public hearings and wrote to the Department of Finance, somewhat magically—I think it was about two days later—the secretary of Prime Minister and Cabinet wrote to a much wider range of agencies and said: 'Please? Would you mind? It would be kind of really good if you popped this back on the website.' So we're inching in that direction, but the simple fix is just to put in place a regulatory rule which requires full disclosure and transparency to be done with it—importantly, in the annual reports and not buried on some page on the website.

So Labor, I'm pleased to say, has signed up to this. Our shadow finance minister has signed up to this, actually, in response to a bill that Senator Hanson has put forward in the Senate. It's a bit of a stunt, really, to require the Remuneration Tribunal to be able to set salary—

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