Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I note the contribution of the previous speaker, the member for Flinders, about the Home Insulation Program and I would hope that he also recognises the opportunity for future programs, regardless of who the government is, in this Auditor-General Amendment Bill 2011. The bill allows for a broadening of the scope and jurisdiction of the Auditor-General to follow the money trail through to all areas of taxpayer expenditure—including areas of business such as contractors—which would have allowed the Auditor-General to go through in detail the Home Insulation Program and related programs to establish fact from fiction in the debate. I would hope that is a signal of support for this important amendment to the Auditor-General Act that allows the Auditor-General to do his or her job on behalf of all Commonwealth taxpayers.

Any business in this country knows that they would be letting themselves down as a business if they did not allow audits to be done of all areas of their business. The Commonwealth cannot say that today. We have restrictions and boundaries placed on the scope and jurisdiction of the Auditor-General and their ability to follow the money trail—from taxpayer money collected through to taxpayer money distributed to various programs on the ground. This bill tries to address that. It is based on the work of the Joint Standing Committee of Public Accounts and Audit, in its report 419, which made a very strong and unanimous recommendation to expand the jurisdiction of the Auditor-General to allow the money trail to be followed.

There are three areas that I think are of particular interest to this parliament in a political context. The first is government business enterprises. Currently, the Auditor-General is limited in their scope to conduct audits within and around GBEs, government business enterprises. This is at a time when we are about to do the biggest rollout of information and communication technology that I am aware of in this country through the establishment of a GBE in NBN Co. Parliament would not be doing its duty if it did not allow the Auditor-General to regularly and freely audit all aspects of the NBN rollout and in particular NBN Co. Likewise, as I mentioned before, there are currently limits placed on the Auditor-General’s ability to audit government contractors. The Home Insulation Program, which the member for Flinders just discussed, is a very good example of where the Auditor-General’s inability to do basic audits led to, arguably, lesser outcomes in program delivery.

I would also mention, though, regardless of the current parliament, the ongoing work and the ongoing problems of defence contracting. DMO, for example, has an annual budget of roughly $9 billion a year. It is a problematic area of government program delivery, and allowing the Auditor-General to explore in an unfettered way all aspects of contracting in that area would lead to much greater value for money and much greater efficiency outcomes for taxpayers’ dollars, something I hope all members of this parliament would strongly support.

The other area, which I think will surprise many people, is in regard to agreements reached with state agencies and other levels of government. Building the Education Revolution has been a topic in this parliament for some time. Allowing the Auditor-General to distinguish fact from fiction and go into state agencies, such as the New South Wales Department of Education and Training, to establish just what has gone on, where and why would be an important change in law for taxpayers.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Is the motion seconded?

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

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

The main purpose of the Auditor-General Amendment Bill 2011 is to extend the powers of the Auditor-General to audit not only government entities and agencies but also, critically, contracting third parties. While the coalition may support the intent of this legislation, unfortunately, given the circumstances, we cannot support this bill for a number of reasons. Firstly, it is an increase in the regulatory burden. This bill would require any supplier to any government agency to be prepared to undergo a full investigation by the Auditor-General at any time. This would place an added cost and compliance burden on business. I put it to you, Mr Deputy Speaker Scott, that under Labor over the last three and a bit years we have seen the greatest growth of government in our lives—and that includes the Whitlam era. If supported, this bill would just further increase that burden for any business doing work with the government.

The reporting requirements today for many hundreds of thousands of small and mid-tier businesses are becoming a major impost, a major cost and a major factor in the poor profitability of so many of those companies. There has to be a point where we start to turn this flood backwards. There have been literally thousands of new regulations in the last three and a bit years. This government’s whole rationale is to make decisions on behalf of others in the community. In this case, it is making decisions on behalf of not only other government instrumentalities but also the many hundreds of thousands of small businesses the intent of this legislation would extend to. In doing so, it will create a very significant impediment to many of these companies doing business with the government. I am sure this is not the intent of the bill mover in any way and I do respect the clear intent of this legislation.

With the level of scrutiny and intrusion that would come about with a study by the Auditor-General of businesses’ practices, many small- and medium-sized businesses will choose not to do business with a government agency as a consequence. Therefore, only the biggest companies with the resources available to prepare and comply with an Auditor-General investigation may be willing to tender for contracts under these circumstances. This legislation will, I suspect unwittingly but very quickly and in a very major way, provide a significant impediment and discouragement for so many businesses to continue to seek government business.

This legislation could lead to greater cost of government services. Many of these businesses would face the prospect of an Auditor-General inquiry sometime in the future—and it would be a real prospect when you look at the myriad programs that have wasted thousands of millions of dollars in the last three and a bit years under this government. The programs these businesses were in good faith seeking to do work for could well end up being the subject of an Auditor-General inquiry, given the record of this government and its total incompetence in terms of wasting public moneys and mismanaging so many programs. As a consequence, many of these contractors and others will build into the tender price increased costs to cover the potential audit requirements.

So, on so many fronts, this is simply an addition to the reporting requirements. Also it will chase the waste of taxpayers’ money after the event, after the horse has bolted. The proposition by the coalition for an office of due diligence is the way to go. We oppose this bill. (Time expired)

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to speak on the Auditor-General Amendment Bill 2011 both as the Deputy Chair of the Joint Committee of Public Accounts and Audit and on behalf of the government. I congratulate the member for Lyne for bringing this bill before the House. The original Audit Act of 1901 was the fourth act to be passed by the first federal parliament. This is a clear indication of how significant the role of proper auditing and accountability was to the parliament at that time and continues to be today.

It was the Joint Committee of Public Accounts and Audit’s predecessor, the Joint Committee of Public Accounts, that initiated a number of inquiries that saw the evolution of the laws surrounding the proper auditing and accountability of government. Under the Joint Committee of Public Accounts we saw inquiries in 1989, 1994, 1996 and 2001. The act was replaced as a consequence of the introduction by the Hon. Kim Beazley MP of the Auditor-General Bill 1994. It was endorsed after an inquiry by the committee. That bill was replaced in 1997 by the Auditor-General Act 1997.

The functions performed by the Auditor-General continue to be a matter of great significance to this parliament today. It is important that the Auditor-General has the appropriate powers to respond to the audit challenges of today. I was very surprised by the commentary I just heard from the opposition that chasing money after the event was a waste of time. That ignores the important role of the Joint Committee of Public Accounts and Audit and the Australian National Audit Office and the important role that the Auditor-General has in ensuring that we have proper accountability and auditing processes in place in relation to all of the government’s responsibilities.

It was a unanimous decision, as the member for Lyne has stated, in relation to Report 419 handed down by the current committee in the 43rd Parliament. Much of the work on that inquiry was actually done by the 42nd Parliament’s Joint Committee of Public Accounts and Audit. I acknowledge the hard work by the then chair, Sharon Grierson, her committee members and the secretariat in that inquiry.

Report 419 of the Joint Committee of Public Accounts and Audit made a series of recommendations aimed at ensuring that accountability and the role of the Auditor-General are kept current in today’s challenges. The report recommended a range of measures. The most significant recommendations related to amendments to the act to allow the Auditor-General to assess the performance of bodies that receive Commonwealth money when there is a corresponding or reciprocal responsibility to deliver outcomes. In other words, the report recommended that the Auditor-General have the ability to follow the money when Commonwealth money is provided to other bodies, such as state agencies or contractors, for the delivery of Commonwealth outcomes.

This bill is intended to implement the recommendations of the Joint Committee of Public Accounts and Audit report. The government broadly supports the adoption of these measures and intent of this bill. I foreshadow that the government intends to move amendments to the bill to clarify the new powers for the Auditor-General and to ensure that the new provisions will function in line with the intent of the Joint Committee of Public Accounts and Audit report. A number of these amendments cover technical matters that have been resolved in discussions with the Auditor-General since the introduction of the original bill. I take this opportunity once again to thank the members of the Joint Committee of Public Accounts and Audit, both past and present, and the secretariat of the committee for their work in producing Report 419.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

I welcome this opportunity to comment on the Auditor-General Amendment Bill 2011. I want to say at the outset that this government’s ability to waste and mismanage taxpayers’ money—and in just three short years—has become the stuff of legend. There has been example after example of waste. The BER and the home insulation debacle are just two classic examples, and they are becoming all too frequent. There are other potential examples looming of course, such as the government’s determination to proceed with its NBN despite the absence of accountability and a proper business case.

We can now add to the list the Prime Minister’s carbon tax, which she claims is vitally important although she cannot tell us—or will not tell us—what the rate of it will be. It is a tax which the Prime Minister and some of her colleagues say is designed to modify behaviour by increasing the prices of many things used routinely by Australian households, such as food, electricity and petrol, yet at the same time the Prime Minister claims families and businesses will be compensated for rising prices. So you try to modify behaviour and then compensate so you do not have to modify behaviour; I just do not understand the logic there.

The proposed carbon tax is nothing but window dressing designed to make the Prime Minister appear to be doing something and to curry favour with her Greens allies—the green coalition she has. It will do nothing other than create a giant money-go-round. At this rate, the only green jobs this government is likely to create will be in the bowels of the Treasury, administering this ill-conceived carbon tax. ‘Trust me’ is the message, but there is no basis on which to do that from the Prime Minister.

The people of Australia have seen what happens to those who place trust in this Prime Minister. They may be stabbed in the back, as in the case of the now Minister for Foreign Affairs, or they may find themselves burdened by a new tax, despite the assurances they had from the ‘real Julia’ that there would be no carbon tax under a government she led. They may find that the tax summit they were promised in writing would take place in the first half of the year has been delayed until at least October. They may find themselves wondering what happened to the much vaunted processing centre in East Timor for illegal boat arrivals—a solution the Prime Minister promised over eight months ago—

Yvette D'Ath (Petrie, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order on relevance. The member does not seem to be speaking to the bill before this House at all. I ask that the member be brought to the bill.

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

The member for Petrie makes a point of order. It is a little unusual in private members’ business to make that point, but I will make sure that the member for Cowan continues and speaks to the bill before the parliament.

Luke Simpkins (Cowan, Liberal Party) Share this | Link to this | Hansard source

I certainly am speaking to it and will continue to do so, because this is a bill about the accuracy and the accountability of government, which remains a major problem for this government.

Whilst the coalition applaud the spirit of the bill put forward by the member for Lyne, our concern is what it will actually do to stop the waste. As we know, the Prime Minister talked about letting the sun shine in but, in this case, it is only after the fact. Surely, our first duty as parliamentarians is to make sure that the waste is prevented in the first place. The member seeks to widen the powers of the Auditor-General, but this will not prevent the waste occurring at the outset. That is what the problem is. It may be a cliche but maybe this is trying to lock the door after the horse has bolted.

In this case, some classic risk-management principles are required. As has been said, this is a case of ‘we can assess what the waste has been after it has occurred’. The coalition will not support this bill until it has this sort of extra information and extra requirements such as an office of due diligence. This office would properly assess government programs to make sure that waste abuse and mismanagement were not part of a program. It is a classic and very real risk-management proposal that would end up stopping such waste. Without such a front-end assessment to address program failures before they happen, we cannot possibly support this bill.

Robert Oakeshott (Lyne, Independent) Share this | Link to this | Hansard source

by leave—I table the explanatory memorandum to the bill.

Ms Anna Burke (Chisholm, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The time allocated for this debate has expired. The debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.