Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

Is the member for Lyne seeking leave?

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

I am seeking leave to speak without closing the debate.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

Is leave granted?

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

I did not say leave was granted. It would have been courteous if the member had—

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

Can the member for Mackellar refrain from commenting. Leave is being sought by the member for Lyne to speak without closing the debate.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

I must say to the chamber that I did try to contact Mr Oakeshott, the member, earlier this evening. I would have thought if he had wanted to speak for a second time it would have been courteous of him to return that call and to let me know. I find it extraordinary that, at this stage, I am being asked to give leave for the right to speak for a second time.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

Can I seek an indication from the member for Mackellar whether leave is granted or not to progress the issue.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Madam Deputy Speaker, I would like to know on what basis the leave is being sought before I grant leave.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

We will hold for a moment and seek clarification. I indicate to the House that there is no debate on the granting of leave, so I will just seek an indication from the member for Mackellar as to whether leave is granted or not.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Madam Deputy Speaker, I would ask you to ask the member who is seeking leave for what period of time he wishes to speak and the purpose for which he wishes to speak, and then I will make a decision about leave being granted.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

I indicate to the member for Mackellar that it is not usual to seek a debate or explanation—

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

None of this is usual.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

I appreciate that, but the member has sought leave and I am seeking an indication from you as to whether leave is granted for the member to speak for a second time without closing the debate. I indicated that I am not going to allow a debate on the issue. The normal process is that leave is sought. The polite arrangements behind that are a matter for members of the House. I am, as the chair, merely seeking advice as to whether leave is granted for the member to speak a second time without closing the debate.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

As I understand it, there are only two speaking spots of 10 minutes each and then two of five minutes each. If leave were granted then that 10-minute spot would be lost, and I am not prepared to give that up. Perhaps you could tell me otherwise, if that is not the case.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

The understanding of the chair is that the time allotted for the debate is 40 minutes. There are two speakers of 10 minutes each and all other members of five minutes each, which would allow for two 10-minute and four five-minute speakers in the allotted time, if we get underway before we run out of time. Does the member for Mackellar have a decision for the House?

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Perhaps I will speak now and take my 10 minutes. No doubt the member from the government benches wants to take 10 minutes, but if he wants to give up his 10 for five then we can look at the question of leave for that spot.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

So leave is not granted. The member for Mackellar has the call.

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

Thank you, Madam Deputy Speaker. It is an important issue that the member for Lyne has raised. It arises from an Auditor-General's report by the Joint Standing Committee on Public Accounts and Audit, of which the member for Lyne is the chairman. He has made some pretty signif­icant recommendations, which are contained in this private member's bill. I must say I do have some sympathy with many of the issues that he has raised, which is exactly why I called the member earlier in the day to speak with him about being sympathetic to the issues that he has raised. For instance, I think there is a very good case to be made out about a clearer ability for the Auditor-General to audit GBEs, government business enterprises, and, equally, the ability to trace Commonwealth government funds which are given to state, territory and local govern­ment. There is a need to be able to pursue an audit trail. I am very sympathetic to that.

I am also very sympathetic to the case being made out for government controlled companies to be audited. Well I remember when I was first in this place that, as a member of the Joint Committee on Public Accounts, I would have very much liked to have audited the Parliament House Const­ruction Authority, which built the building in which we stand and sit today. But, because the government of the day would not agree to it, the Auditor-General had no power himself to do an audit of the authority. The argument was that it was a government controlled company and the definition of that was that, if the government appointed a majority of directors to that company, it would be a controlled company and the Auditor-General could not of his own volition audit that company. I am pleased to see that this is finally being overturned. It was something that I advocated all those years ago when I was in the Senate and it is something that I advocate now.

Another good measure in the proposed bill is for an audit of indicators, which the Auditor-General himself has recommended. Performance indicators should be part of the audit process. The bill says that an annual sample of audits should be conducted of performance indicators, but nowhere in the bill does it say what a 'sample' means and nor does it say precisely what is meant by 'performance indicators', as they vary considerably across the realm of govern­ment. The Auditor-General, in his submiss­ion to the public accounts committee did lay out some indicators of what he thought they should be, and I quote from the report: 'It is thought that the performance indicator should be a mix of quantitative and qualitative measures incorporating a range of best practice characteristics and be cost effective to collect, analyse and report against.' The Auditor-General was quite specific about what he thought was the best way to go about it, but I note that that is not really reflected in the bill. No doubt that could be remedied in future times. The member for Goldstein in his second reading speech said that the opposition would oppose the bill because it proposed that the Auditor-General should have the right to audit private sector companies which contract with the Commonwealth. I believe that is far too intrusive into the private sector. The purpose of a public sector audit and the purpose of a private sector audit are entirely separate purposes. I have long fought in this place to always retain the Auditor-General being the Auditor-General for GBEs and publicly controlled companies because I believe that the purpose of the Auditor-General in both financial audits and performance audits is to ensure that the money which is compulsorily taken from the taxpayer by way of taxation measures is properly spent.

In the private sector an auditor has a dual role to make sure that money is properly spent but also to give advice to that enterprise or individual about how they conduct their business and can do better. It is an entirely separate function and to allow the Auditor-General, which has a very specific purpose to carry out, to be intrusive into the private sector is quite unacceptable. It would lead to enormous burdens being placed upon the private sector entity, be it an individual or a firm, and would discourage people from competing for government work.

Where waste is concerned—and I pres­ume that a lot of these auditing provisions are meant to be put in place to prevent waste occurring—a better way is the one the opposition is putting forward. That is to try and see that we can prevent waste in the first place. We should put in place effective measures that could eliminate waste before it is incurred rather than just reported upon after it has occurred, as would come to light via the Auditor-General's report.

I cannot state strongly enough that the idea that the Auditor-General should be given permission to audit the private sector contractor is enough to put this bill totally at risk. I foreshadow that, when we get to consideration in detail, we will move certain amendments which would remove private sector contractors from the ambit of the bill. It would mean that all the good parts that are there would continue to be in place but the part that would allow incursion into the private sector would be taken out of the bill. We believe that is a far better outcome for people wishing to contract with the Commonwealth and it would avert additional increase of costs and red tape and bureaucracy which is never a good thing for the prosperity of the private sector.

The coalition's policy to create an office of due diligence, which would avoid waste in the first place, is a far better way to go. It would put in place mechanisms which would allow far better contracting arrangements to be entered into. I note from the inquiry that the public accounts committee held that there were particular concerns about the DMO in Defence. I think that the office of due diligence would have a great role to play in that contracting situation. But I certainly do not think that anybody's interests would be enhanced by allowing the Auditor-General to intrude into the area of the private sector.

For those reasons, I say to the mover of this private member's bill, the member for Lyne, that I think there is much in the bill that is to be commended. Some of the things that you have included are things that I personally have been fighting for over a long time and that I would be very pleased to see in place. I do have great confidence in the work of the Auditor-General and the task that he carries out in the public sector, but I reiterate I do not believe there is any place for the Auditor-General to be intruding into the private sector.

In foreshadowing those amendments in consideration in detail, I say to the member for Lyne that should he choose to accept our amendments or should they be carried—that is, to delete the private sector from the bill—we would be prepared to support the remai­nder of the bill. That was the purpose of the call that I placed to him today to have discussions with him. As we probably will not reach consideration in detail tonight, there is probably going to be an opportunity to have some further discussions. I look forward to those because I think perhaps if he reflects upon it and reads his own report in the light of those comments, he may feel that would be a good way to go. It would be a shame not to support the bill because it has that impediment. (Time expired)

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

The Auditor-General Amendment Bill 2011 before the House this evening implements a number of recommendations in the report of the Joint Committee of Public Accounts and Audit inquiry into the Auditor-General Act 1997. I will go through the recommendations of the report that would be implemented in further detail.

I want to make a couple of broad points about the role of the Auditor-General. The Auditor-General has played a valuable role in Australian politics, most memorably in recent times in uncovering the regional rorts scandal put in place under the Howard government. As those with long memories would be aware, this was one of the most insidious forms of pork-barrelling that occurred under the Howard government—the notion that, rather than allocating essential infrastructure based on the need of the local community and on strict cost-benefit criteria, you would instead make those decisions based on electorates. I did a little academic work on this while I was at the Australian National University, looking at the allocation of a number of funding programs under the Howard government—the Roads to Recovery Program, the Regional Partnerships Program and the Sustainable Regions Program. Under each of those programs you could see clear evidence of partisan bias and clear evidence that a substantial increase in funding was going to electorates then held by the coalition. That is an allocation that is not an appropriate use of public money and that does not ensure that the Australian taxpayer gets the best value for money. I am pleased at the role that the Auditor-General played in uncovering that.

I have to say that I am a little concerned about the lack of courtesy shown in the debate this evening to the member for Lyne. I will go short on my speech to ensure to the greatest extent possible that he is able to speak in this debate. But I think it would have been appropriate had he been able to commence this debate. On the suggestion by the member for Mackellar that somehow this could all be resolved if only the member for Lyne would read his own report, I just do not know what to say about statements like that.

The functions performed by the Auditor-General continue to be a matter of great significance. It is critical that the Auditor-General has the appropriate powers to respond to new audit challenges that arise. The amendments are going to implement the recommendations of the report, as I noted above. One of the important changes that flows from the implementation of the committee's recommendations will be the Auditor-General having the power to 'follow the money'. That is, the Auditor-General will be able to undertake audits of Common­wealth partners—private sector and state and territory entities—that receive Australian government funds to implement a government program. That ensures that the Auditor-General's powers keep up with the way in which modern government operates. At the moment, the Auditor-General is unable to assess the extent to which individuals or entities that receive Australian government funds achieve the purpose for which those funds were provided. An amendment implements the change to that.

The bill as amended contains appropriate restrictions on the extent of those powers, and the government anticipates that those powers would be used only sparingly. For example, the Auditor-General would be able to assess the operations of the state or territory entity only after a request by the Joint Committee of Public Accounts and Audit or the responsible minister and only to the extent that they relate to achieving the purpose for which the funds were provided. It ensures that the Auditor-General has the tools to respond to today's auditing chall­enges.

There are a number of minor amend­ments—for example, providing clear authority for the Auditor-General to undertake assurance reviews and audits of performance indicators, which are currently carried out as audits by agreement under section 20 of the act. The bill, if passed, will clarify the Auditor-General's powers to require the production of documents that are the subject of legal professional privilege. I will conclude my statements there so as to allow further opportunity for others to participate in the debate this evening.

Sophie Mirabella (Indi, Liberal Party, Shadow Minister for Innovation, Industry and Science) Share this | Link to this | Hansard source

I rise to speak on the Auditor-General Amendment Bill 2011 and to support the amendments that were discussed earlier by the member for Mackellar. But I also want to take this opportunity to once again call on the member for Lyne in his capacity as the Chair of the Joint Committee of Public Accounts and Audit, the author of this bill and a regional member with considerable influence over this faltering government to show his support for an ANAO investigation into the Aust­ralian Rail Track Corporation's involvement in the rail track replacement work between Melbourne and Albury.

This bill effectively seeks to provide greater power to the Auditor-General to conduct audits into government agencies, government business enterprises and govern­ment controlled companies. If the member for Lyne really believes in scrutiny of government, if he believes that the Auditor-General should have the discretion to conduct investigations of GBEs like the ARTC, he will support my call for a full and frank audit of the Melbourne to Albury rail project, a project that will be yet another addition to Labor's long list of failures. If he believes that country Australians deserve access to a safe and reliable public transport system then he will support my call.

The member for Lyne has a large degree of influence over this government, as we have seen and as I am sure he would like to admit, particularly to his constituents. I would suggest that this is the perfect opportunity to put that influence to good use for the sake of services to a significant rural and regional community. The minister responsible for this project, the member for Grayndler, promised full transparency when he came to office, yet we know that the ARTC has already conducted an investi­gation into the state of the rail track between Melbourne and Albury and that the results of this investigation have not seen the light of day and have in fact been hidden—another failed project and another broken promise.

There are elements of this bill which I do support and believe should be commended. Giving the ANAO more power and auton­omy to conduct investigations into govern­ment business enterprises such as the ARTC is of course something that I fully support. But I would urge the member for Lyne, regardless of the outcome on this bill, to use his influence on this committee to push for an audit into the ARTC. I would also urge members opposite who believe in government transparency to agree to this audit.

There are other aspects of this bill which the coalition does not support. This bill would extend somewhat intrusive powers to the ANAO which would subject independent contractors to audits if they received government contracts. This would effectively apply another layer of bureaucracy and increased costs and regulatory burden to private industry. It would be a significant disincentive for small businesses to tender for government contracts and I believe would be an unintended negative conse­quence of this bill. I say 'unintended' because I do not think the intention is to further harm small businesses who are already suffering under significant regulation and increased costs, with some barely making a profit at all. The amendments moved by the coalition would remove these intrusive powers that would hurt small contractors, while extend­ing those extra powers to investigate government agencies, government-controlled companies and government business enterprises. I look forward to support for these amendments and I especially look forward to the member for Lyne's support for my call for an audit into the ARTC's involvement in the Melbourne to Albury rail freight.

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

I rise tonight to speak to report 419: Inquiry into the Auditor-General Act 1997. This report was completed by the Joint Committee of Public Accounts and Audit in this 43rd parliament, chaired by Rob Oakeshott, the member for Lyne, but is in fact the conclusion of work undertaken by the committee of the same name in the 42nd parliament, which was chaired by Sharon Grierson, the member for Newcastle. I am a little alarmed that it seems this evening that because of developments prior to my entering the chamber the member for Mackellar has denied the chair of the committee, the member for Lyne, a chance to put on the record some of his important and, I would say, very informative observations about this report. However, it is important that we do acknowledge that the committee continues to do excellent work and the committee members are working very hard to ensure that the joint parliamentary committee undertakes its work with diligence.

I acknowledge the committee members of each parliament and applaud the excellent work of the committee secretariat—Mr Russell Chafer, Dr Kris Veenstra, Ms Pauline Cullen, Dr Narelle McGlusky and Dr Ian McDonald—for their work on the committee and in particular, for this excellent report. This in fact could be called the 'follow the money bill' because that is what it is really all about. There are so many terms that are bandied about in this chamber and I know that people out there who are listening are trying to figure out what on earth is actually going on.

The reality is that, as the member for Fraser has spoken of earlier, there has been rorting, particularly under the Howard government. The Auditor-General was unable with the powers that he had at that time to follow the money and to see what was going on. The functions performed by the Auditor-General are of great signifi­cance. They matter to this parliament and they matter to the Australian people. It is important that the Auditor-General has the appropriate powers to respond to the audit challenges of this day. As I said, this is about his capacity to follow the money—the money being that which Australian taxpayers invest with this government and expect us to be able to spend in the most effective and efficient way.

I hear from the member for Mackellar on the other side that she wants to protect the private sector from intrusion. If the private sector is the beneficiary of public money, we want to know if we are getting value for our dollar and, essentially, that is what this report is about. This is what we want to enable.

The intent of the Auditor-General Amend­ment Bill 2011 is clearly to implement the various recommendations of the report. These are quite significant. One of the concerns I have is that the Auditor-General Act currently provides that government business enterprises can only be audited by the Auditor-General at the request of the committee—the JCPAA, or the minister responsible for the government business enterprise, or the Minister for Finance and Deregulation. The report recommends that the act needs to be amended to give the Auditor-General the authority that he needs to initiate audits of government business enterprises. Successive governments have taken the view that he should not have that authority but it is clear from what we have seen from the committee that it is time that the Auditor-General was given those capacities.

I am going to cut my speech rather short to allow a little time for the member for Lyne to sum up at the end this debate. I commend him once again for his leadership of that committee, which is undertaking some heavy lifting, and I look forward to hearing his words on this bill. I commend the bill, as amended, to the House.

Scott Buchholz (Wright, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Auditor-General Amendment Bill 2011 to amend the Auditor-General Act 1997. The coalition's main concern is that independent contractors will be subject to auditors from the Auditor-General if they receive government contr­acts. This would create an extra layer of bureaucracy and increase costs and convince many smaller contractors not to bid for contracts due to extra regulatory require­ments.

The coalition therefore proposes that the private member's bill be amended to remove the provision that contractors could be audited. The coalition's policy is to create an office of due diligence to avoid the waste in the first place rather than report on it after the event. While the coalition may support the intent of this legislation, it recommends that we oppose the bill for the following reasons: firstly, the increase in regulatory burden. The bill would require any supplier to a government agency to be prepared to undergo a full investigation by the Auditor-General at any time. This would place added costs and compliance burdens on business and, being a small business owner myself before coming to this place, I am very in tune with the amount of compliance that is already in place for small businesses of up to 100 staff.

Secondly, the bill would bring yet more government intervention. Under Labor we have seen the greatest growth of government in living memory. If supported, this bill would further increase that burden on any business doing its work with government. I also draw attention to the increase in bureaucracy since this Labor government came to power. Since 2007 we have seen an increase of more than 22,000 staff in the Public Service here in Canberra alone.

The bill also creates an impediment for doing business with government. With this level of scrutiny and intrusion, many businesses—especially small- and medium-sized businesses—may choose not to do business with a government agency. There­fore, under these circumstances only the biggest companies with the resources available to them would be prepared to comply with an Auditor-General's invest­igation or might be willing to tender for contracts.

Thirdly, it would lead to greater costs for government services. For a bill that purports to be protecting taxpayers and ensuring value for money, there is no doubt that the level of compliance required creates the very real possibility that tender prices will have to increase to cover the potential audit require­ments.

Fourthly, it chases the waste of taxpayers' money after that event. Instead of putting better prevention systems in place to reduce the likelihood of waste, this bill seeks to enhance the powers of the Auditor-General to investigate after the horse has bolted. I now turn to the establishment of a due diligence office. Under the coalition, every new major government spending program will, before it commences, be properly assessed for its capacity for waste, abuse and mismanagement. We want to pre-empt problems not mop them up afterwards. Central to our strong approach on stopping the waste will be the establishment of an office of due diligence within the Depart­ment of the Prime Minister and Cabinet. The office of due diligence will comprise officials seconded from the Australian National Audit Office and the Common­wealth Ombudsman as well as people with private sector contract expertise. The role of the office of due diligence will be to examine programs before they are approved by cabinet to ensure that each project is efficiently designed, has a detailed implementation plan and will be implem­ented in a manner that provides maximum value for the taxpayer.

We have great confidence in the Auditor-General. However, we do have concerns with his role in assessing private contractors. An earlier speaker raised the issue of the area consultative committees and made the point that there was a bias towards coalition seats. I was involved in a community which was a recipient of federal government grants that came through the area consultative comm­ittee. I can assure this room that, from a regional perspective, it is one of the few places for regional Australia to get support. The member raising the point is a strong advocate of regional Australia, but I can assure you that it was one of the few areas where we could actually get some support. Value for money was also mentioned. I think that the government is potentially being hypocritical when it talks about value for money—we only have to look as far as the NBN, or possibly the BER, for situations which are rather embarrassing to this House.

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

I certainly appreciate the opportunity of speaking and wrapping up the debate this evening on the Auditor-General Amendment Bill 2011. This bill has been before the House for the last month or so. It was introduced, as has been correctly mentioned by others, on the back of the Joint Public Accounts and Audit Committee report 419—work done primarily by the previous Public Accounts and Audit Committee, chaired by Sharon Grierson. This bill takes the unanimous recommendations from that 42nd Parliament committee and is hopefully turning it into a real outcome.

It is somewhat surprising, therefore, as we go from a committee process where agree­ment has been reached by all parties and into the legislative process, that we see amendments to this legislation coming from both sides. Whilst I certainly accept many of the amendments coming through from government relating to drafting issues, there is one government amendment that does deserve a mention. That amendment is the one making changes to arrangements for GBEs and trying to put in place a process involving approval by the Joint Public Accounts and Audit Committee before allowing the Auditor-General to do an audit of those semi-statutory bodies. That is not my preference. It was not the preference of report 419 or of the unanimous committee recommendation. However, I guess you have to make some compromises to negotiate legislation through the parliament and that is one that I, reluctantly, will have to make to see passage of this legislation.

In regard to opposition amendments, to try to remove the Auditor-General's contact with private contractors is, in my view, a step too far. To some degree, I have to say, it is patronising to business to imply that business people will only do business with govern­ment if they are not open to audit. What is really being said by that carries, I think, an implication that is unfair to business people and businesses generally within Australia. The only requirement and the only regulation you would have if you were doing business with government is that you would be open to audit. If you are doing the right thing with taxpayers' money, you have absolutely no problems. Several speakers in this debate, including the previous one, have suggested that the complaints about the BER are examples of government waste. For the opposition to then be willing to oppose this bill is oxymoronic. The very point of this bill is to allow the Auditor-General to investigate waste within programs such as the BER, as was mentioned by the previous speaker. You cannot have it both ways. If you do want to follow the money trail and if you do want to demonstrate that there is waste in govern­ment and if you do want to hold government to account and if you do want transparency, here is your moment. This is the bill. To say that the BER is a waste, to say pink batts are a waste and to say home insulation is a waste—let us concur, let us do something about it, let us be positive and let us introduce legislation that allows an Auditor-General to investigate the truth or otherwise, to distinguish the fact from the fiction, to drill down, to hold some people to account and to get better public policy outcomes with taxpayers' money.

With regard to the point about private contractors, we are not necessarily talking only about small businesses. I think about DMO and the $9 billion of taxpayers' money that goes into DMO every year. There are close to billion-dollar companies, such as Raytheon, operating in Australia with no audit or oversight of where that taxpayers' money is going or of their obligations to the public purse. So to cry poor that this is about small business—it is not. This is about following the money trail to make sure we get full value for money. (Time expired)

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

The time allotted for the 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.