Gary Nairn (Eden-Monaro, Liberal Party, Special Minister of State) Share this | Link to this | Hansard source

I present the explanatory memorandum to this bill and move:

That this bill be now read a second time.

This bill is to amend the Public Works Committee Act 1969 to alter the value and definition of a public work that requires referral to the Parliamentary Standing Committee on Public Works.

The amendments in the bill reflect the changes in the Commonwealth public works environment since the act was last amended in 1989. This was based on feedback from the committee and other sources on the practical operation of the act.

The amendments particularly take into account new methods of procurement and the increase in construction prices since the threshold was last amended in 1985. It has been a significant period of time since that threshold was changed.

The bill updates the threshold value at which projects must be referred to the committee from $6 million to $15 million. This reflects the increase in the cost of construction since the value was last amended in 1985.

The proposed legislation also allows for the value to be otherwise set by regulation. This provides for greater flexibility for future updates of the threshold value to accommodate future changes in the value. A regulatory regime will help avoid freezing the threshold at inappropriate levels, allowing for more regular adjustment.

The change to the definition of a ‘public work’ firstly clarifies that works funded by way of public private partnerships, or PPPs, must be referred to the committee. This reflects the current understanding that works funded through PPPs are implicitly covered by the act.

The amended definition of a ‘public work’ specifically includes those public works funded through leasing or other similar arrangements. These are often fit-outs of leased accommodation, which are included in the act. However, their funding arrangements caused them to fall outside the definition of a ‘public work’.

The revised definition does not refer to the specific funding methods. Instead, the characteristics of a public work have been amended so as to include these works. Two amendments have been made to achieve this end.

The first allows for indirect funding of the work. This covers, but is not limited to, deferred payment, payment through a PPP vehicle, or payment through leasing or similar arrangements.

The second removes the requirement that the Commonwealth or Commonwealth authority is proposed to become the owner of the work. Under either funding method, the Commonwealth or Commonwealth authority may not necessarily become the owner of the work.

The revised definition does not extend to cover works that are not ‘for the Commonwealth’, or ‘for a Commonwealth authority’. An example of this is a pre-commitment lease, where the private sector constructs a building that is subsequently occupied by a Commonwealth (or a Commonwealth authority) tenant.

No other changes are made to the definition of a ‘public work’.

The amendment to the definition of a public work removes the requirement that the Commonwealth must become the owner of the work. However, in order for it to be a public work, the reason for undertaking the work must be that it is for the Commonwealth or a Commonwealth authority.

For example, a PPP will be undertaken for a Commonwealth purpose and simply represents an alternative procurement method. A pre-commitment lease on the other hand, implies that the Commonwealth, or a Commonwealth authority, will be the first tenant in a facility that is not custom designed for it. Pre-commitment leases differ from PPPs in that the construction of the facility is not predicated on the Commonwealth or a Commonwealth authority being a party to the contract.

Any works currently under scrutiny by the committee still require a report to the parliament, even if the amendments to the act would otherwise cause that work to no longer be covered by the act.

Finally, the language of the act is updated to reflect the modern approach of using non-gender specific terminology. References to the Minister for Housing and Construction have also been updated.

I commend this bill to the parliament. The changes that have been made are necessary. A good example of the need for the change to PPPs is the new Defence Headquarters, which is being constructed in my electorate, between Queanbeyan and Bungendore. This is the first PPP of the Commonwealth where construction is being done specifically for the use of the Commonwealth as opposed to not specifically for the Commonwealth. While it went through the Public Works Committee, it was necessary to make these changes for the future to include those various options. I commend the bill to the House.

Michael Hatton (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

It is probably completely out of order but, as a former member of the Public Works Committee and current member of the Joint Standing Committee on Foreign Affairs, Defence and Trade, I would like to say these are very interesting changes that are very timely.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Unaccustomed as I am to speaking on public works legislation, I feel so passionate about this piece of legislation that I need to make a contribution to the debate. The Public Works Committee Amendment Bill 2006 seeks to amend the Public Works Committee Act 1969 to increase the threshold from $6 million to $15 million for works that must be referred to the committee. It also seeks to allow the threshold to be changed by regulation and it changes the definition of a public work so that public-private partnerships or similar arrangements and certain leases over the threshold are referred to the committee. This will capture works such as fit-outs funded through lease incentives.

The work of the Public Works Committee and the amendments do not cover large Commonwealth leases, which I think is fairly important, including pre-commitment leases on purpose-built premises. The proposed changes reflect changes in property procurement practices since the act was last amended, in 1989. The threshold was last changed in 1985 and is too low. Six out of 17 projects since September 2005 cost less than $15 million.

The bill is unanimously supported by members of the Public Works Committee—and since there is a unanimous report of the Public Works Committee it is obvious that we, on this side of the parliament, will be supporting the bill. It has been developed after extensive negotiations with DOFA and it is consistent with previous administrative practices. It is also envisaged that the committee will write to departments so that works valued between $6 million and $15 million—that is, works on a medium scale—are notified to the committee.

The bill extends the Public Works Committee’s oversight of public works to include newer forms of public financing such as public-private partnerships and to cover works funded through lease initiatives. It also allows for resources to be better deployed and allows the Public Works Committee to focus on scrutinising larger projects, which is once again quite important.

I take this opportunity to emphasise that there has been an ideologically driven and less than rigorous approach by the Commonwealth in recent times towards disposing of assets. I actually do not believe that has been in the interests of the Australian people. The Auditor-General found that the costly sale and lease-back arrangements of Commonwealth property could—and I say probably would—result in a potential negative return to the Commonwealth in these lease periods. This is something that the government has to look at very seriously.

The Commonwealth sold 59 properties for $983 million in the three years to 2001. What I think is happening is that the government is hell-bent on divesting itself of its properties. It has been driven by the desire to sell all rather than by a rational assessment on a case-by-case basis of whether it is in the interests of the Commonwealth to retain ownership of these assets.

As passionate as I am about public works, I will end my contribution to the debate here. In doing so, I say that I support the amendments in the bill. Given the fact that the Public Works Committee unanimously supported the bill, I certainly agree with it. But I do have some concerns that since the Howard government have been in power they have divested themselves of Commonwealth properties. I question whether that is actually in the interests of the Australian people.

John Forrest (Mallee, National Party) Share this | Link to this | Hansard source

I am really pleased to be able to address the amendments in the Public Works Committee Amendment Bill 2006 to the Public Works Committee Act 1969. Those of us who have been on the Public Works Committee have been urging reforms like these for some time. I am pleased because this debate gives us an opportunity to remind the House just how important the Public Works Committee is. Mr Deputy Speaker Hatton, I acknowledge your former role as a participant on the committee. I am speaking in this debate not just as a member of the committee myself but on behalf of our current chair, the member for Pearce, the Hon. Judy Moylan, whilst she is engaged in duties overseas.

Briefly, the Public Works Committee is one of the oldest investigative committees of the parliament, having been established in 1913. It cannot claim to be the oldest public works committee in Australia; that honour goes to New South Wales, whose Public Works Committee was established in 1888. Back in 1913 there was a clear and identifiable need for a public works committee. Joseph Cook, the then Prime Minister, informed the parliament that the methods for conducting public works policy were crude, inefficient and altogether inadequate for the purposes of securing taxpayers against loss and waste.

In those days, £3 million to £4 million was being spent each year on public works, yet there was no full or detailed investigation of the projects to which the expenditure related. Nor did the parliament know very much of the actual details of the expenditure, which in those days would have been significant sums of money.

The act of 1913 and subsequent amendments define the committee’s role. It is, firstly, to consider each public work that is referred to it and to report to both houses on the suitability of the work being undertaken, having particular regard to: the purpose of the work and its suitability for that purpose; the need for or the advisability of carrying out the work; whether the money to be expended on the work is being spent in the most cost-effective manner; the amount of revenue that the work will generate for the Commonwealth—if that is its purpose; and the present and prospective public value of the work. In 1913 that meant that all proposals for expenditure exceeding £10,000 were to be submitted to the committee for inquiry and report to the parliament. We have come a long way since then, when Prime Minister Joseph Cook introduced the act to overcome what was described as the chaotic state of our public works.

Thankfully it is not like that today: it is a great committee to work on. There is a very strong bipartisan will. Credit goes to the member for Gorton, the deputy chair of the committee, who inspires that spirit as we beaver away, in the interests of the generous taxpayers who provide the funding, to ensure it is being spent appropriately. The functions of today’s committee are still reflective of its antecedents. The public works now coming before it are much more sophisticated, more complex and larger in scale than ever before, with different procurement arrangements, which I will discuss shortly. Geographically, the spread of projects ranges right across the breadth of the Australian continent, in the territories and each of the states—Darwin, Central Australia, Western Australia and in the Antarctic and in other countries where we have embassies or high commissions.

The committee has looked at projects with a price tag of over $2 million and projects associated with Australia’s defence capability in excess of $400 million. To give an example of how hardworking the committee is, in overall terms, the committee approved expenditure of $990.8 million on 22 public works projects in 2005. Yesterday the deputy chair presented our 17th report for this year, so we are well on the way to meeting that huge target. This is a huge workload for the committee.

That leads me to the bill that is now before us in the House today. Its purpose is to amend the act to reflect the changes in the Commonwealth public works and procurement environment which have occurred since the act was last amended, in 1989. Over the many years since that early £10,000 was determined to be the threshold for the submission of public works proposals to the committee, there have been a number of adjustments to the threshold that reflect increased prices in materials and ancillary costs associated with the overall costs of construction.

To illustrate this point: in 1969 the threshold was set at $750,000, in 1973 it was raised to $2 million and in 1985 it was raised to $6 million. This bill seeks to increase that threshold to $15 million, which is an adjustment to encompass 20 years of inflation. The bill also provides for this figure to be amended by regulation in the future rather than by an amending act, thereby providing greater flexibility for future updates of the threshold. I note that this has caused some concern and discussion because of the possibility that works below the threshold might not have the supervision of the parliament. I would remind members that the committee still has the right to make inquiry on an informal basis on any projects below that—in fact, even with the current threshold at $6 million, we still exercise some scrutiny of what are described as minor projects.

But, most importantly, in addition to raising the threshold from $6 million to $15 million, the bill changes the definition of a public work by clarifying that works funded through public-private partnerships or similar arrangements must be referred to the committee. This is an issue which has occupied the committee’s activities for some time, as procurement arrangements are changing dramatically in the modern world, with partnerships developing with private enterprise.

Essentially, public-private partnerships involve the use of private sector capital funds and assets and are used more and more frequently in major infrastructure procurement arrangements. PPPs, as they are often referred to, reconfigure the procurement process by placing emphasis on the service or capability that the public sector requires rather than the asset used to provide them. It saves the Commonwealth accumulating a huge amount of assets when really it is the Commonwealth’s purpose to deliver services. It has been an interesting period of inquiry for the committee as we have wrestled with these issues. This bill gives some certainty to us and to the proponents of projects about what everyone’s responsibilities are.

As part of the amendment to the definition of public works, the bill addresses the difficulties which the committee has already experienced in addressing these anomalies. The amendments that are contained in the bill, and which I have spoken to here, reflect feedback from the committee and other sources on the public operation of the act, especially as it related to these procurement arrangements. It is not just about construction costs and adjustment for inflation; it is also about giving certainty to the purpose of a standing committee of the parliament.

Finally, I want to conclude by complimenting my fellow committee members—current and former—particularly the chair and the deputy chair. It is a joy to work on a committee without the partisanship that often occurs on some committees. We are united in our purpose to ensure the effective discharge of the responsibility that is put on us by the citizens of Australia to ensure their money is well spent. The committee as a whole supports this bill and accordingly I commend it to the House.

Michael Hatton (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Mallee, effectively the unpaid engineering expert on the committee.

Brendan O'Connor (Gorton, Australian Labor Party) Share this | Link to this | Hansard source

There is a mistake on the speaking list. The name of my good friend the member for Corio is down but—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Certainly, there can be no doubt the member for Gorton is in fact the deputy chair of the Public Works Committee.

Brendan O'Connor (Gorton, Australian Labor Party) Share this | Link to this | Hansard source

Yes; therefore I feel it is my duty to rise after the member for Mallee’s contribution, to speak on the Public Works Committee Amendment Bill 2006. Before the member for Mallee rose I did hear you utter some concern, Mr Deputy Speaker, after the minister indicated the reasons for the amendment. I want to assure you, as a member of the parliament and a former member of the committee, that these amendments are made to make the committee work better and make sure that we put as much effort as we can, in an effective way, into examining the way in which the Commonwealth spends money.

We now have a situation where, because of the $6 million threshold that was introduced into the parliament in the early- to mid-eighties, we are putting as much effort into examining projects that are between $6 million and $8 million or $9 million as we are into projects that are worth hundreds of millions of dollars.

As the member for Mallee indicated, we had, I think, 22 projects last year, many of which were in that $6 million to $15 million bracket. That is not to say that we should not be inquiring into those. Indeed, we will have the right, as they will be defined as medium works, to continue to inquire into those particular matters. But the fact is that, in real terms, a figure of $15 million for construction is less than the $6 million that was introduced in the mid-eighties. So you could say that in real terms we are reducing the threshold.

The reason we have had to do this is that the committee is—leaving me aside—one of the hardest-working committees in the parliament. It is not a sexy committee—it is not the Joint Standing Committee on Foreign Affairs, Defence and Trade—and it is not a committee that members are always clamouring to be members of, but it is one of the hardest-working committees. I include in that not only the members but also the secretariat and others who assist the committee, because it is a constant effort to keep on top of the workload. There were 22 projects last year and 22 occasions on which the chair tabled reports to the parliament for works undertaken by the Commonwealth. That workload has been increasing as the threshold in real terms has been falling—to the point where it has been almost impossible for the committee to continue its work, putting great strain upon the secretariat and, indeed, committee members, to ensure that they have sufficient members to inquire into these matters.

The strain on the committee is not just because of the number of committee hearings; it is also because of the travel required. Again, I know that some might think it a benefit to travel to what they think are exotic places across this great country to inquire into expenditure, but because our job is one where we are very time-poor in terms of allocating our responsibilities across the year, the requirement on members to give up so much time to travel means that as the workload grows there have been occasions when we have been unable to find the requisite number of members.

I understand that, on the face of it, people may have concerns about the proposition in the amendment before us, because there is clearly an increase in the nominal value of the threshold. But I want to assure members that the amendment arose from the committee’s own concerns. Indeed, the committee had a unanimous view that it had to be changed in order for us to effectively examine whether the Commonwealth was in fact getting value for money when expending the taxpayer’s dollar. It became obvious to us that we should not be spending so much time on small works when there were such large projects spending enormous amounts of the Commonwealth’s capital. I think this amendment will help us properly balance such needs in providing important scrutiny of expenditure from the Commonwealth purse.

While we should also support the other amendment that goes to allowing us to consider certain expenditures under lease arrangements, I should say that we did not go far enough with it. This is the area where I would disagree with the executive government. I am not suggesting that members of the committee do not agree with what I am about to say, but unfortunately we were not able to secure an amendment that would allow us to look at the entire arrangements of these extraordinarily expensive leases.

The day of Commonwealth building, the day of bricks and mortar expenditure, is really over, so we are talking about lease arrangements. We are talking about public-private partnerships in which we can examine only such things as fit-outs, not the actual worth of the leases. So we could have a lease that has a $300 million or $400 million cost to the Commonwealth but we are not in a position to examine—in the same way that we would examine the construction or the fit-out of a particular building—whether that is value for money. I am not sure if there is any committee that properly does so. I am sure Public Accounts would have some capacity to inquire. Indeed, Senate estimates might be able to discuss expenditure that has occurred on a particular lease and examine that, but that is post the signing of the lease; that is after we have entered into a contract that may be for 10 years.

Our predecessors established the Public Works Committee in 1913, as the member for Mallee indicated, when the Commonwealth was building its own buildings. Given that era is over—as it has really been in the last 15 or 20 years that we have been entering into more lease arrangements—it seems important that the executive government allow a joint standing committee like Public Works to examine properly the lease arrangements in their entirety, not just the fit-outs that are involved in the lease arrangements. That would be an important thing for the executive government to consider. I know that the committee itself certainly raised our concerns about our inability to examine the large contracts that the Commonwealth enters into to lease accommodation, and I think there is some work to be done to ensure that those large contracts are properly examined by the parliament and not entered into only by the executive government. To that extent I think we still have some way to go.

To that extent I also support the sentiments if not the actual reasoning of Senator Murray, who spoke about the amendments in the other place. I do not agree with some of the points he raised but I think his sentiments were correct when he warned the parliament not to allow executive governments not to provide proper opportunities for the parliament to scrutinise the expenditure of the executive.

So there is some way to go and I think the government should seriously consider what we are to do with these lease arrangement contracts that are not being examined. It is not just for the parliament; it is also for the executive government. One thing about the Joint Standing Committee on Public Works is that, once Public Works approves a work because of an inquiry, we have given some protection to the minister or the department. Effectively, the minister can now say: ‘This matter was referred. The department did refer the matter to the Joint Standing Committee on Public Works. Public Works has inquired, has examined, has called for witnesses, has met on the location, has taken evidence under oath and has reported to the parliament.’ That provides protection to the executive government. So the executive government should not feel threatened about scrutiny. Indeed, they should feel that there is some benefit not only for the public at large, who want us to ensure that Commonwealth expenditure is being spent properly, but also for them.

That is the one caveat I have in relation to the amendments: they are not broad enough. They do go to the fit-outs of large leases, and that is an improvement; however, they have not gone as far as they should.

I also concur with the comments made by the member for Mallee in relation to the way in which the Public Works Committee operates. In fact, as a former member, Mr Deputy Speaker Hatton, I am sure you know that the committee is consensual by nature. I do not know when that began. I do not know whether, in fact, it has been partisan for periods of time and then on occasions consensual. It does not mean there are not times when people get a little nervous about particular matters and, of course, I do not want people to feel that any opposition member wants to play rubber-stamp to executive government.

One of the reasons why there is a consensual attitude on the committee is that it is easy for the opposition members of the committee to stand up to decisions of the executive government if they think those decisions are bad. It is harder for government members to do that, and I think the only reason why there is a consensual approach is that the government members—and I am sure that would have been the case when Labor was in government—are willing to stand up to decisions they think are wrong or do not fulfil the objectives of the Public Works Committee Act. Without the government members doing that, the opposition members would probably be less likely to work in such a cohesive and consensual way.

For whatever reason, it seems to me that the committee works together and has done some very important things, even in recent times. For example, the committee unanimously opposed the work of the extension of the Maribyrnong detention centre. It was a very controversial topic. The brief by the department was that the extension was to make the accommodation more humane. It was the unanimous view of the committee that the department’s own objectives would not be fulfilled. It would not make the Maribyrnong detention centre more humane because, for example, it was going to increase the detainees accommodated in each room. I applaud, in particular, the chair and the member for Mallee, and all government members who felt strongly enough about it to make that decision to unanimously reject the proposition made by the department.

Whilst we did not end up with a perfect solution—with the committee refusing to accept the recommendation or the position of the department—there is no doubt that that construction was improved because the Public Works Committee members were willing to look at the objects of the project and realised that they were not consistent with the provisions of the act. That has ensured that detainees, if they were to be held in Maribyrnong detention centre, would be better off. That was exactly the department’s objective, but it was not coming through in the project itself.

One former member of the Public Works Committee has followed another into the chair. Mr Deputy Speaker Lindsay, you are a former member—it is a big club, the members and former members of the Public Works Committee—so you would be well aware that the committee works cohesively. In fact, I was recently in your electorate in relation to a project, and you spoke to the committee about that project. The committee travels a lot. As I said earlier, it is a very busy committee. We do tend to work together and that is important. In the end, though, we had to lift the threshold because, as I said earlier, the works were becoming unmanageable. It was important to adjust the $6 million threshold to take into account inflation. Along the way, we also ensured that fit-outs of lease contracts would also be under the purview of the Public Works Committee—and that was an improvement.

I will finish by repeating that, in my view, one further amendment is required. We need to broaden the Public Works Act to ensure that we have purview over lease arrangements that are entered into by the Commonwealth. Sometimes lease arrangements run into hundreds of millions of dollars. It is therefore important that this proposition be incorporated into the legislation so that there can be proper examination of the expenditure of that money.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

As the honourable member for Gorton just mentioned, a number of speakers in this debate have been members of the Public Works Committee. I have not been a member of the Public Works Committee, but I have previously been Parliamentary Secretary to the Minister for Finance and Administration and, as the results of the deliberations of the Public Works Committee are moved through the parliament in that capacity, I am acutely aware of the bipartisan nature of the committee. I am well aware that the committee takes its work very seriously. On numerous occasions, I had discussions with, and correspondence to and from, the honourable member for Pearce, who was the chair of that committee.

I think the concept of a Public Works Committee in a democracy in 2006, in the 21st century, is very positive; it works towards accountability. Overwhelmingly, in my experience, the Public Works Committee does endorse the recommendations of the departments. Others might correct me if that is not the case, but that is my perception. Sometimes, however, caveats are placed on those recommendations—with recommendations for slight variations and, maybe, improvements. As the honourable member for Gorton said in reference to the extensions to the Maribyrnong detention centre, the committee might occasionally take a point of view that is different from the point of view the responsible minister would like the committee to take. In a democracy, if you want a committee system to work, if you do not want it to be just a rubber stamp for the government of the day, you have to allow committees to take evidence and then to deliberate on the issues they have been able to ascertain from their perusal of the evidence given. The Public Works Committee is entrenched—regardless of which party is in office, we will continue to have the committee.

I see this bill as being a very positive step, particularly in the area of accountability and transparency. There has been an increase in the amount of money—from $6 million to $15 million—that can be expended on a project before it is required to be considered by the committee. That is timely, and I might even say overdue. The figure of $6 million has been in place for some 20 years: $6 million 20 years ago would certainly buy a lot more than $6 million today. Maybe it would have been even better to index the figure so that it goes up in accordance with some particular index so that we are not in a situation of having to do this again. But I think in future it will be possible to vary it by regulation. That will be a flexible move which will mean that the committee will not be required to look at projects for which the expenditure is below the figure considered from time to time to be appropriate.

It is important to make sure that taxpayers get good value for money, and the Public Works Committee is a vital tool in ensuring that this occurs. Governments are not immune to increasing building costs. Right around the country building costs constantly go up, including in the domestic sector. For instance, on the Sunshine Coast, seven or eight years ago the average price of a home was $167,038, whereas today it is $436,429—a huge increase, partly caused by inflation, partly for other reasons. Governments are not immune to these increases. Consequently it is important to increase the figure from $6 million to $15 million, because that is the appropriate level of expenditure on a project for consideration by a parliamentary committee and also for the reason the previous member articulated, namely, that the workload of the Public Works Committee was becoming almost unmanageable.

The Public Works Committee Amendment Bill 2006 takes into account that there are many factors that influence prices and also the reality that prices do in fact increase. The committee is governed by the Public Works Committee Act 1969, which states that all public works projects for the Commonwealth which are valued at more than $6 million must be referred to the committee for its perusal. Projects that must be referred to the committee are those sponsored by Australian government departments and major statutory bodies. The projects are referred either by His Excellency the Governor-General or by the House of the parliament. In my capacity as Parliamentary Secretary to the Minister for Finance and Administration, I often used to refer projects to the Public Works Committee on behalf of the government.

As I said before, this bill increases the threshold from $6 million to $15 million, increasing that figure after a period of 20 years. This new figure was selected after referring to the increase in construction prices and the figure has been agreed by all ministers with an interest in public works. Implementing this change will help reduce the compliance cost of those projects costing between $6 million and $15 million.

I think most people in the Australian community would accept that, as these projects are constructed using public money, it is important that they be properly scrutinised. So the committee is empowered, under the act, to investigate and assess the projects in various areas, including the need for the work, its effectiveness in meeting that need and the cost-effectiveness of the project. If it is a revenue-raising venture, the committee can investigate and make a determination as to whether the project will raise the projected revenue. The committee can also investigate and assess the value of the finished work.

Mr Deputy Speaker Lindsay, you will be well aware that the bill will also help to streamline the operations of the committee and the act by amending the definition of public works to include those projects that are co-funded by a private company. In Australia, and I suspect in other jurisdictions around the world, this practice is becoming increasingly common. The bill will insert provisions into the act that will enable the threshold of the committee to be varied by regulation—and I alluded to that before—and that gives a flexibility that has not been available for the last 20 years.

The draftsmen of the bill will use its passing to correct a past oversight and to insert gender neutral language into the act. I have to say I do not necessarily agree with this modern drafting tendency whereby the thought police are out there marauding through the legislation of this nation and taking out words like ‘chairman’, which are not sexist terms, because ‘man’ comes from ‘manus’, the hand, the Latin. It is not male; it is the hand that guides the chair. I just think that it is a pity in 2006—

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Mr Randall interjecting

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I hear the point of view of the honourable member for Canning.

Peter Lindsay (Herbert, Liberal Party) Share this | Link to this | Hansard source

The honourable member for Canning will withdraw that statement.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

I will leave that between you, Mr Deputy Speaker, and the honourable member! Having said that, I just think it is a bit unfortunate that political correctness forces us to butcher the language and we are introducing so-called gender neutral language into the act when the existing language, by historical definition, was gender neutral anyway. I think that is regrettable. But I suspect that is not a battle I am going to win.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

You digress.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

No, I do not digress at all, because part of this bill, through changes to the act, is to insert what people consider to be gender neutral language, presumably to replace the so-called sexist language that was there before. What I am saying, and the point that I am articulating—I think rather well, Mr Deputy Speaker, if I say so myself—is that I do not see the language that is being replaced as being sexist. But, having said that, that is not a battle that I am going to win right now, so I suppose there is no point in detaining the committee any further.

This bill improves the function of one of the longest-established investigative committees in parliament. It was established way back in 1915. I suppose when it was established in 1915 that would have been seen as a very far-sighted step, because in 1915 I think the couple of levels of accountability and transparency that we would today accept as the norm certainly would not have been as well entrenched. This bill will ensure that the Public Works Committee can continue to perform its work effectively and efficiently. I am very pleased to commend the bill to the chamber.

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker Lindsay, I am pleased to see you in the chair as chair of the proceedings of the Main Committee. I digress a little. I have one little postscript on my parliamentary history: I was the last Chairman of Committees of the House of Representatives.

It is a pleasure to be able to contribute to this debate on the Public Works Committee Amendment Bill 2006. As a member of the Public Works Committee in this parliament and in the last parliament, I have become aware of the good work that the committee does. I think all members would agree that there is a need for such a committee, and the fact that this is one of the longest-standing committees of the parliament indicates that. It is of particular interest to read the comments by Prime Minister Joseph Cook back in September 1913, because I think the principles about the work of the committee are still of relevance to our work now in the first decade of the 21st century. Prime Minister Cook, when debating the establishment of the Public Works Committee, said:

Huge sums are being and have been spent for years past without proper inquiries and without that information to which the House is entitled. No big public work ought to be undertaken until this House has passed judgement upon it. That is one of the prime functions of legislative assembly anywhere and always. Indeed, this proposition goes to the very root and basis of our system of responsible government and parliamentary control.

I know that the member for Mallee, who I think is the longest-standing member of the committee, or at least one of the longest, went into the history of the committee. It is interesting because it indicates the development of the national parliament. Being a committee that first met in 1915, it has a proud history of 91 years. Also, if you look at the work of the committee, it tells you something about the development of the nation. I am always amused to see the pictures of what may have only been a Senate committee that looked at the possible sites for the nation’s capital. It was the days of horse and buggy travel. It was the days of a different way of looking at one’s personal upkeep. There is a picture of the senators in a dam having their daily wash, which I think is intriguing and says something about the way that the nation developed and what we really confronted at the time. Those early members of the nation’s parliament were out and about inquiring into the expenditure of public funds.

The amending legislation that we debate today has some fairly simple but important purposes. It increases the threshold of works that must be referred to the committee from $6 million to $15 million. It allows, sensibly, that threshold to be changed by regulation. And it changes the definition of a public work to better reflect modern ways of delivery of those public works, especially public-private partnerships and the fact that it has been a conscious decision of government—and possibly governments—to use leasing arrangements in much greater terms. It is a fact that, within those leasing arrangements, it becomes a little unclear about the element of the public work of those leasing arrangements that should properly be something that is subject to inquiry by the Public Works Committee.

There is another thing that should be said about this legislation. As a member of the committee and as an opposition member of the committee, I think that it really is important that I acknowledge that the committee was, at every stage, consulted about the development of this piece of legislation. The history of the development is that the member for Fisher, as the then Parliamentary Secretary to the Minister for Finance and Administration, started off the discussion. Parliamentary secretary Senator Colbeck, of course a former member of the Public Works Committee, was also very diligent in the way that he made sure that at each step of the progress of this piece of legislation there was a very full and frank discussion with the committee. I would like to place on record on behalf of this side of the chamber that we appreciate that.

My partisan comment is that this has not necessarily been reflected in other aspects of the way in which government has developed committee systems in either this chamber or the other place. I should not be too churlish on this occasion but ought reflect on the true tradition of the work of the Public Works Committee. I think that is the very important thing that I have had the pleasure of noticing over the last two parliaments. From what I know of the work of the committee, this has been a committee that has gone about its work in a bipartisan way. I think that that is reflected in that even some of those interests that are represented in the Senate that are not directly represented on the committee were satisfied after their inquiry and discussion informally with both sides of the chamber about the legislation, and they had no problem with its progress through the Senate. These are important aspects because often we have a view of the business of the Australian parliament that it is all about confrontation, but certainly a lot of things that are done in the parliament are done by consensus, by agreement, by people actually working together in the best interests of the nation.

Sometimes that means that the Public Works Committee, as an arm of the parliament, comes up with conclusions that run counter to the intentions of government. The other aspect of that is that, when that has been the case, in almost 100 per cent of cases, agencies that have suffered either minor or major criticism in public works reports have come back to the committee in the ongoing dialogue and discussion, and they have appreciated the opportunity of being able to do that with elected representatives.

This bill will put in place some measures concerning the way in which we look at public-private partnerships and an ongoing relationship at other stages of the committee. We have seen, on an informal basis, the first PPP that came before the committee, which the minister has a particular and special interest in. Again, the temptation is to be churlish and to be partisan about this project, but I will not, because the Headquarters Joint Operations Command at Bungendore was very testing—not just in a political sense for the member but testing for the Public Works Committee because it was an absolutely new form of delivery that the Public Works Committee had to get their head around. I think that the Department of Defence acknowledge that they are probably still getting their head around it. But we as a committee continue to get updates about the progress of that project.

Yesterday, one of the three reports that were tabled was on the LEAP facility, which is the on-base living quarters of defence, which will be delivered in a public-private partnership. This was a fairly detailed inquiry. Because of our experiences in the past, because of the Department of Defence’s experiences in the past, there was a detailed investigation of the proposal and, arising from that, a much better understanding about public-private partnerships—whatever one’s ideological bent about that is—once a decision was made to deliver it in that fashion.

I think that the committee is now much better placed to investigate those things. This piece of legislation will tie up the loose ends and that will make the process more akin to the way in which we have been able to investigate traditionally delivered public works. Certainly technology and management practices have changed with respect to the way in which a public work is delivered—for instance, the way in which a building is built. Previously, one could sit down very early in the investigation with definite plans. All the i’s were dotted and the t’s were crossed about what would be delivered. That has long been dismissed as a management tool in the way a building is delivered. Many of the decisions are made on an ongoing basis, so, at a very early stage in the project, the committee has a dilemma and has to make judgements based on what it has to investigate under the act. There has been this ongoing development of the way in which the committee goes about its work, and the cooperation that we have seen in the way in which the committee goes about its work has always been of great importance.

With respect to the investigations of the Public Works Committee, we identify those things that are properly in the public domain as part of the decision. Judgements are made about the stated purpose of the work and the suitability of the work. The Public Works Committee makes a decision about the necessity or the advisability of carrying out the work. The committee ensures the most effective use is made of the moneys expended in carrying out the work, and of course that has been crucial to the way in which the committee has had to develop its analysis of these projects because of the different ways of delivery. Where the work purports to be of a revenue-producing character, the committee also notes the amount of revenue that it might reasonably be expected to produce and the present and prospective public value of the work. They remain the core principles.

What this piece of legislation does is to look at the realities of the way in which, either by what is happening in the wider world in the delivery of public works or by conscious decision of the government of the day, the committee is able to do its work.

As a personal aside: what my involvement on the Public Works Committee has done is to make me appreciate the work of the defence forces. Regrettably, I cannot claim to have actually attended one of the public works being carried out in the fine electorate of Herbert but, under another committee much earlier in my life in this parliament, I did visit Laverack Barracks. I have to say I do not know why we were inspecting living quarters under the finance and public administration committee, but we were. It was about 18 years ago. They were fairly primitive. I have been pleased to be involved in public works investigations that have been about the improvement in living conditions for the defence forces. Defence are one of our major clients, if I can use the term. They have developed a recognition of the importance of the public works processes in the delivery of their public works.

Another department that I might mention, because I think it is important because certainly the committee has been on their back, is the Department of Immigration and Multicultural Affairs. They have most definitely of recent times indicated their understanding of their need to cooperate with us. Like a number of agencies, they understand there are a lot of informal processes about our work that are important too—the ability to come to us early in the putting together of a proposal and iron out any problems before they arise.

One of the important aspects of this piece of legislation is that it will modify the workload of the committee. One of the things is changing the threshold. The works that fall between $6 million and $15 million will be classified as medium works, where the committee looks at whether there is any requirement for our further discussion of the project. We will wait to see about the other item, because as members of the legislature we have to be vigilant to ensure that departments and agencies understand that the new definition of a public work will perhaps cast a wider net over those matters that should come before the committee. Having said that, I think that most agencies have erred on the side of caution and have brought to the committee things that might have been borderline under the previous definition and that are captured by the new definition. I think it was also reassuring that different departments and agencies saw the work of the Public Works Committee on behalf of the community as being very important.

Another thing that I think the parliament perhaps needs to look at, having now made these amendments to the Public Works Act, is making sure that there are not expenditures that fall through a gap between the work of the Public Works Committee and the work of the other committee that is probably relevant, the Joint Committee of Public Accounts and Audit. Often there has been a point in a discussion of a public work where we have had to conclude that it might be outside the bounds of the Public Works Committee. It is often reflected that we think that that would be picked up by the operation of the public accounts committee, but I am just not sure whether anybody has ever done the work to step back and thoroughly match it up so that all forms of public expenditure, whether they be public works or other, are actually covered. That really gets back to what Prime Minister Cook said back in 1913 about the importance of proper inquiry.

I conclude with a minor comment. In the past I have had a debate about the derivatives of certain words and—through you, Mr Deputy Speaker—I indicate to the honourable member for Fisher that I will be doing some further research about what he says is the overzealous application of gender-neutral language. I have always referred to the chairman of this committee as the chair. At this stage I would like to say that the member for Pearce, as chair of this committee, does a terrific job. She is very fair in the way in which she allows the whole committee to have its say. She engenders a spirit of cooperation, and I think that has been very important in the way in which we have done our work. I have great pleasure in supporting the Public Works Committee Amendment Bill 2006.

Gary Nairn (Eden-Monaro, Liberal Party, Special Minister of State) Share this | Link to this | Hansard source

in reply—I thank all members for their contributions to this debate on the Public Works Committee Amendment Bill 2006. Having listened to the member for Scullin, I am disappointed I missed some of the other contributions that also had some historical facts about the Public Works Committee. For his benefit, he will be pleased to know that the formal turning of the sod of the headquarters at Bungendore will probably be taking place next month, so that project is progressing.

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

Although the turning of the sod at the intersection of the King’s Highway is a bobby dazzler!

Gary Nairn (Eden-Monaro, Liberal Party, Special Minister of State) Share this | Link to this | Hansard source

I have never been a member of the Public Works Committee, although in my first years in parliament I would have liked to have been a member of that committee. It has always been a hotly contested committee to be on because it certainly covers a broad cross-section of Commonwealth projects. But I have appeared before that committee on a number of occasions with regard to different projects being proposed throughout my electorate.

In fact, it was the good work of the Public Works Committee that saw the sense of changing a decision—and I will add my one little partisan, churlish aspect to go with the member for Scullin’s—of the previous government on the location of the armaments complex. Rather than being in what was ultimately shown to be a silly location down in Victoria, it was established in Eden, which has proved to be an excellent location for the Navy for the storage of ammunition. It is an excellent project, just one of the many projects that have come along in the 10 years that I have been in this place and been looked at by the Public Works Committee. As he said, its members work extremely well together in looking at projects on behalf of the taxpayer, in looking, from the taxpayer’s point of view, at investment in capital works. Again I thank all members for their contribution to this debate.

The bill certainly makes a number of important amendments to the Public Works Committee Act. The amendments take into account changes in the Commonwealth public works environment since the act was last amended, in 1989, which is quite some time ago for that sort of legislation. The threshold value, as we have heard, will now go from $6 million to $15 million and the amendments will now enable the threshold to be changed by regulation.

The bill amends the definition of a public work to clarify that works funded through public-private partnerships—or PPPs—need to be referred to the committee. The amended definition of a public work also includes works funded through a lease or another similar arrangement. Taken together, these changes update and modernise the Public Works Committee Act, which governs one of the longest-standing committees of the parliament. I note that the changes have received the full support of the committee. I thank the member for Scullin in particular for his comments about the liaison between the committee and the parliamentary secretaries who have had carriage of this. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.