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

I rise to speak on the Financial Framework Legislation Amendment Bill 2010.  As noted by the member for Brand, when he introduced this bill on 30 September, this is the seventh Financial Framework Legislation Amendment Bill since 2004. These bills have continued the coalition’s work to promote transparent and accountable government finances for Australian government departments, agencies, Commonwealth authorities and companies which are predominately contained in the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997.

This bill, in particular, seeks to update the framework, improve operational efficiency and assist with the operation of interjurisdictional entities. Firstly, the bill repeals 20 redundant special appropriations, including six acts in their entirety. Secondly, the bill seeks to improve the governance framework, established by the FMA Act and the CAC Act, both of which govern the management and accountability of Commonwealth agencies, authorities and the executive arm of the government.

The bill will allow ministers to delegate certain functions under the CAC Act to departmental secretaries, relating to the oversight of Commonwealth authorities and Commonwealth companies. It also seeks to allow relevant state and territory ministers to request information about FMA Act agencies and Commonwealth authorities operating under the CAC Act.

Thirdly, the bill consolidates the Australian Institute of Criminology with the Criminology Research Council into a single agency, while also transferring them from the CAC Act to the FMA Act. It also seeks to transfer the governance of the Australian Law Reform Commission from the CAC Act to the FMA Act. Further, the National Transport Commission will be brought under the CAC Act as it currently sits outside existing frameworks, other than for its annual reporting.

The coalition broadly supports this amending legislation. However, I draw the attention of the House to page 5.2 of the Department of Finance and Deregulation’s red book, the incoming government brief, publicly released on 1 October, which stated:

Through this Bill—

the Financial Framework Legislation Amendment bill 2010—

there is also an opportunity for the Government to reconfirm its support for a strong financial framework dealing with Commonwealth resources by expanding the definition of ‘proper use’ to  include ‘economical’. While proper use already includes ‘efficient, effective and ethical’, inclusion of the word ‘economical’ will increase the focus on the level of resources the Commonwealth applies to achieve outcomes.

This was the department’s subtle way of acknowledging the government’s reckless waste and mismanagement across myriad programs over the past three years and the need for something to be done about it. Even though the language was somewhat tortuous, it was quite pointed for a department to advise its own government in such a significant way about the monumental waste and mismanagement of which we have seen endless examples, such as the $2.8 billion pink batts debacle. That program was rushed out and led to 207 house fires, 4,000 potential cases of fraud and, tragically, four deaths. It was one of the monumental policy failures in this country’s history.

We also saw the $850 million solar panel scheme blow-out. We saw the dumping of the $275 million Green Loans program. We saw $6 billion to $8 billion wasted in delivering the $16.2 billion school hall program, with state schools paying twice as much per square metre as Catholic schools for the same buildings—a disgrace to proper management in anyone’s language. We saw the embarrassing implementation of the Indigenous housing program. We saw the $1 billion blow-out in the Computers in Schools program. We saw the $1 billion blow-out due to the Labor government’s loss of control of our nation’s borders. We saw the gross waste and mismanagement of our $4 billion-a-year foreign aid budget. We saw $1.5 million spent to send 113 delegates to the Copenhagen conference. We saw the failed GroceryWatch website set up and shut down at a cost of $10 million. We saw the bungled Fuelwatch scheme and, of course, the $43 billion NBN, which we now know is $50 billion—from $4.7 billion originally. And now we see a project cost—

Mr Ripoll and Mr Husic interjecting—

If you do not know what a project cost is, go back to accounting 101. See what the cost is to the community: $50 billion. Some in the industry are saying it is $55 billion.

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

The members for Oxley and Chifley will restrain themselves.

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

So it has gone from $4.7 billion to $43 billion, and the Prime Minister stood up here today and tried to dissemble, saying, ‘Well, you only look at capex, of course; you don’t look at what the NBN has to pay to Telstra.’ This is real money. It is not like the $600 that the now Treasurer said was not real money before he got into office. It is real money. Get over it and start concentrating on how you can pay it back.

With the NBN we have seen the scope to produce the greatest level of waste this country has ever seen. This has been further highlighted by this government’s refusal to conduct a cost-benefit analysis despite the fact that it promised, before coming into office, that every significant infrastructure project would have a cost-benefit analysis. Not one significant infrastructure project in the last three years has seen a cost-benefit analysis. Nothing has been released. There has been politics writ large with every major decision, from the school halls program to the road decisions to the NBN: politics, politics, politics and spin. There has been not one cost-benefit analysis. Yet, go back and see what the Minister for Infrastructure and Transport said unambiguously and endlessly before the 2007 election: that this government, if it got into government, would undertake one and release it in a transparent way.

Such a litany of waste and mismanagement has never been seen in the history of this country. It is the most egregious and devastating waste and mismanagement, and this government stands condemned. This waste and mismanagement is one of the principal reasons the government came so close to losing the election despite the fact that, around the world and in Australia, a first-term government is hardly ever tossed out—in fact, it has only happened once in Australia’s history.

Only recently the Australian National Audit Office also revealed that taxpayers are not getting value for money in up to three-quarters of government purchases. The ANAO concluded that government agencies failed to routinely compare prices when direct sourcing goods and services worth a mere $10.2 billion a year. Again, the now retired former Minister for Finance and Deregulation said endlessly that the government had sought to improve and upgrade the sorts of processes required by government agencies. Now we see that it has failed to routinely compare prices across $10.2 billion worth of goods and services. The report stated:

For 74 per cent of the Direct Source procurements in the ANAO sample, agencies were unable to demonstrate whether the procurement gave them value for money. In the majority of cases there was a lack of evidence of any comparative analysis of the relevant costs and benefits of different procurement options to support the procurement decision.

All this waste is occurring when interest rates are going up, with the average mortgage holder paying up to $6,000 more on interest payments than they were a year ago. Cost-of-living pressures are increasing, with household bills continuing to rise and a budget built on the back of more than $40 billion worth of new taxes since 2008. The government continues to borrow $100 million a day and does not have the courage to make the tough decisions to rein in its reckless spending. This has all contributed. It is a matter of good governance, transparency and strong financial management.

Mr Deputy Speaker, I understand there is a need to sum up quickly. I had other comments to make on this. What I do foreshadow is that we have sought to move an amendment. We sought in the other place to move a private member’s bill, which failed to gain support, to introduce the need for the notion of value for money to be included within this act to ensure that there is a proper focus on the requirements to properly look after the nation’s finances. That was unsuccessful. We foreshadowed an amendment to introduce value for money along the lines consistent with what the Department of Finance and Deregulation have recommended. We were unable to get agreement from the government but they have agreed to an amendment, I understand, where we would include ‘economical’, instead of ‘value for money’, as recommended by the Department of Finance and Deregulation. So I will move that amendment in due course when other speakers have concluded.

In conclusion, while the amendment I will formally move today is a small amendment to the FMA Act, it will be a further step in reminding this government of the obligation it has to every Australian taxpayer. The coalition does not oppose the Financial Framework Legislation Amendment Bill 2010. It builds on the work carried out by the Howard government between 2004 and 2007. I commend the bill to the House.

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

In this Yuletide period of peace that has broken out, I thank the member for Goldstein for limiting his results and also the member for Oxley for facilitating the business of the House by choosing not to speak.

Gary Gray (Brand, Australian Labor Party, Minister for the Public Service and Integrity) Share this | Link to this | Hansard source

in reply—I thank the member for Goldstein for his contribution to this debate. The Financial Framework Legislation Amendment Bill 2010 is an omnibus bill that would affect 31 acts, involving the amendment of 25 acts and the repeal of six. The bill contains three major themes. The opposition has circulated amendments to the Financial Management and Accountability Act to include ‘economical’ in section 44 of the FMA Act, which sets out the responsibilities of chief executives to promote the proper use of government resources. The government will support the opposition’s proposed amendment.

I will now turn to other aspects of the bill. The first theme is the repeal of 20 redundant special appropriations, including six acts in their entirety. This continues the government’s commitment as part of Operation Sunlight to enhance the transparency and accountability of the Commonwealth’s financial framework and budgetary process.

The second theme is improving the financial governance framework established by the Financial Management and Accountability Act 1997, the FMA Act, and the Commonwealth Authorities and Companies Act 1997, the CAC Act. In particular the bill would allow ministers to delegate their ability to obtain budget estimates and monthly financial statements under the CAC Act to departmental secretaries for Commonwealth authorities and Commonwealth companies. The bill will also give state and territory ministers the ability to request information about operations of interjurisdictional agencies under the FMA Act and interjurisdictional authorities under the CAC Act. The bill would also strengthen the reporting to parliament of the Commonwealth’s involvement in companies by transferring these requirements from the CAC Act to part 5 of the FMA Act, which currently deals with investments by the Commonwealth.

The third theme is clarifying governance arrangements of several specific bodies. In particular the bill would consolidate the Australian Institute of Criminology with the Criminology Research Council into a single agency while at the same time transferring them from the CAC Act to the FMA Act. The bill would also transfer the governance of the Australian Law Reform Commission from the CAC Act to the FMA Act. Further, this bill would bring the governance of the National Transport Commission under the CAC Act, consistent with the government’s policy on governance arrangements as the commission currently operates outside existing frameworks other than for its annual reporting. Finally, the bill would repeal legislation that had established the Office of Evaluation and Audit for Indigenous Programs as this function has been successfully absorbed into the Australian National Audit Office.

Overall, the amendments in the bill reduce red tape through legislative housekeeping, improve the governance arrangements of interjurisdictional bodies and improve the financial and governance arrangements of specific bodies.

Lastly, I would like to take this opportunity to recognise the efforts of those officials who assisted in the preparation of this bill from across the Commonwealth. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.