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

I rise to speak on Financial Framework Legislation Amendment Bill (No. 2) 2012. This bill seeks to make technical amendments to 21 acts across six portfolios. It forms part of an ongoing program of improving the financial framework as issues arise. The coalition supports the program in principle. This is the 10th financial framework amendment bill since 2004. It seeks to correct anomalies, to add clarity and to ensure consistency across government acts. It aims to ensure legislation is up to date and properly reflects actual and efficient financial practices. The program also seeks to ensure financial arrangements are consistent with constitutional requirements.

It is tedious work, but it is important work. Making the financial framework more efficient is, of course, a good thing. There are 140 items of amendment in this bill alone to achieve both clarity and efficiency across a raft of legislation. It would be a good thing if this level of rigour was also extended to the government's deregulation agenda. The government promised a one-in one-out approach to new regulation. Of course, instead, we have seen 18,089 new pieces of regulation introduced and just 86 items repealed—just a little margin of error of about 18,000 pieces of legislation that have not been removed!

This particular bill is broad in its reach. The amendments are technical but vigilance is required. We have to be mindful of unintended consequences or inequitable outcomes. We do not want to see changes that make people worse off. The coalition has closely examined amendments associated with various acts under the agriculture portfolio, as well as those related to the validation of certain benefits under the Defence Force Retirement and Death Benefits Act 1973 which were made as a result of Commonwealth administrative breaches.

There are also amendments proposed across various superannuation related acts. These would put in place provisions for the Commonwealth to recover inadvertent overpayments, in line with provisions under the Financial Management and Accountability Act 1997. Other amendments in the superannuation area would allow payments made between a recipient's death and the time when the Commonwealth is notified to be recoverable from the deceased's estate. Of course, the government has some form when it comes to sending out cheques to the deceased. Previous Treasury figures showed that, of $12 billion worth of $900 cheques that went out as stimulus payments, $40 million worth were sent out to 16,000 dead people and 27,000 expatriates. So these provisions of this bill are well placed.

There are also provisions under the Taxation Administration Act 1953 which would allow the Commissioner of Taxation or their delegate to make discretionary recoverable advance payments. This relates to benefits that may be in dispute but for which entitlement is likely to be established or re-established. This would only be applied if the Commonwealth was satisfied that the eventual costs associated with halting payments would be greater than if the advances were made. This is designed to require considerations of 'efficient, effective and economical factors' in making payments consistent with the FMA Act.

In the agriculture portfolio there are amendments which clarify the arrangements around Commonwealth support payments to industry bodies. These payments are subject to a limit of 0.5 per cent of an industry's annual gross value of production. They are based on data prepared by the Australian Bureau of Agricultural and Resource Economics and Sciences. In practice, the most up-to-date ABARES data may not be available until after payments are required. As a result, payments made could inadvertently exceed the 0.5 per cent limit. The amendments would allow for determinations to be made by 31 October. If the amount paid ultimately exceeds 0.5 per cent, the recipient body will pay to the Commonwealth an amount equal to the excess. If an amount has not been determined by 31 October, the payment will be based on the industry's gross value of production from the previous year. It has been highlighted that payments made during the year which exceed 0.5 per cent risk breaching section 83 of the Constitution. The shadow minister for agriculture has been consulting with relevant groups, and no concerns have emerged.

In the agriculture portfolio there are also amendments which put in place more efficient ways of recovering administrative costs associated with making payments to agencies. Under the National Residue Survey Administration Act 1992 there are amendments which align payment approval requirements with actual practice. The NRS is entrusted with monitoring for harmful residues in Australian agricultural products and is funded through industry levies.

In relation to amendments in the DFRDB and other areas of superannuation it is important that the government commits to fully communicating any changes to scheme members—for example, the changes associated with provisions to recover overpayments for deceased estates. The amendments under schedule 2 of the bill in relation to the Defence Force Retirement and Death Benefits Act, importantly, have provisions in place to offset debts owed by members as a consequence of previous administrative breaches.

The changes in this bill are reasonable. There has been a genuine effort to improve the efficiency of the financial framework. It is a shame that the rather forensic and technical nature of the amendments in this bill does not reflect the broader approach to financing of this government. For example, this bill gets into the weeds of the financial framework and does some effective work. It is an ongoing program to dot the i's and cross the t's. Yet, on the other hand, you have a government that refuses to subject the $50 billion NBN project—the biggest infrastructure project in the nation's history—to cost-benefit analysis. So here we are, spending important, appropriate, time in this House, and we have spent not one minute on looking at the outcome of a cost-benefit analysis of a $50 billion project. It beggars belief. And the government is prepared to risk $10 billion of borrowed taxpayer dollars on speculative clean energy projects.

These are the sorts of things which confuse the community. They are a reason for the crisis of confidence in the community: they see no consistency. They see a government that is prepared to back its bureaucracy in doing forensic and detailed work at this micro level, and yet where the big bucks are spent we see a very amateur approach being taken. If only the government took this approach to its broader financial activities, we would not be lumbered with $144 billion of net debt and we would be far more resilient to any further shockwaves that might come from Europe or elsewhere. We support the bill.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

That was a typical whinging, moaning and carping response from the member for Goldstein on economic management, typical of the negativity of those opposite. Even on important legislation like the Financial Framework Legislation Amendment Bill (No. 2) 2012, they cannot even bring themselves to come into this chamber with any humility or grace, or to realise that what we are doing here is part of a process that has since 2004 seen 10 legislative changes. In fact, what has been found by the Auditor-General in relation to this issue has been going on for decades. We are a government of laws, and one of the esoteric pieces of legislation can be found in the Constitution, which says, in section 83:

No money shall be drawn from the Treasury of the Commonwealth except under appropriation made by law.

In other words, government cannot actually spend money unless there is a legislative framework or basis for expenditure of that money.

Some years ago I had the benefit, as a member of the Joint Standing Committee of Public Accounts and Audit, of going to Wellington in New Zealand for an Australasian convention in relation to those sorts of committees across the states and territories of Australia and across the South Pacific. There were delegates from a number of different countries, including from as far away as Europe. One thing that is for sure is that we are very blessed in this country to have an office of independence, rigour, objectivity and impartiality called the Australian National Audit Office. Governments of both persuasions find themselves foul of that office. We note the 1,200-page ANAO report into regional rorts—the outlandish, inflated rip-offs and rorts of those opposite in regional funding, particularly in the later days of the Howard government up to November 2007.

We on this side of politics have found ourselves at odds with and upset by the Australian National Audit Office. In a sense, that is a good thing, because when the ANAO raises concerns about circumstances that might cause governments to risk breaching section 83 of the Constitution it is important that we actually listen. In relation to this matter, the ANAO looked at the context in which government agencies' financial statements for 2010-11 may have technically been in breach of section 83 of the Constitution. There were risks involved, but the administrative processes put in place which govern agencies do not actually have a sound legislatively-backed basis for them. Payments could be made based on estimates, assumptions and the like, whereas the legislative provision for that expenditure may not actually be there. The ANAO recommended we look at this and work with agencies, and throughout the framing of the legislation before the House today the Australian National Audit Office and the Auditor-General have been involved in consultation with various statutory agencies.

The management of the financial framework of the Commonwealth can be found in the Financial Management and Accountability Act 1997 and the Commonwealth Authorities and Companies Act 1997. Those acts, and others, provide what I will call the governing arrangements for specific agencies of the Commonwealth. It is important that we comply with the law there, and it is important that we comply with the Constitution. There are a whole range of pieces of legislation that are being amended by schedule 1 of this bill. They are varied and include the Dairy Produce Act 1986, the Taxation Administration Act 1953, the Primary Industries and Energy Research and Development Act 1989 and the Defence Force Retirement and Death Benefits Act 1973. And the list goes on. It is important that we make these amendments across a whole range of legislation.

If enacted, this particular bill will make sure that the framework necessary to address the errors that have been made, the overpayments that could have been undertaken, are backed by legislation and that those payments by Commonwealth agencies are regularised to make sure that they are supported by specific appropriations including specific accounts and are consistent with section 83 of the Constitution and other legislation. Lest anyone think, if they were listening to the member for Goldstein on this matter, that somehow the government was profligate in relation to these issues and there was great waste and mismanagement, I just want to refer briefly before I conclude to the Taxation Administration Act that I referred to. This bill impacts on the Taxation Administration Act through, amongst other things, recoverable payments, the idea of a recoverable advance under recoverable payments and—in other legislation—recoverable death payments. The Australian Taxation Office makes payments in excess of $14 million every year under our taxation laws. It is an enormous amount, and, on the evidence I have received, there could be some issues with 0.01 per cent of all cash payments. This means that fewer than 1,000 payments are at risk of not being supported by an appropriation, and this is a very, very small percentage. But, of course, that is what the Auditor-General is for—to make sure that those payments are consistent with the tax laws and that, if there is an error, they are supported by standing appropriations. It is important that the mechanisms put in place to make sure that money is recovered are supported. I am pleased that government agencies have been involved in the process and that they have been consulted and that the Auditor-General has taken steps, as I know he does also when he makes reports on other issues with government programs, to see that he is involved in the process in order to make sure that the best governance, practice and administration are put in place.

This is a good bill, even though it might be a bit vague and a bit complicated and not that many people might have gone through it. I thank the officials who have taken the time to do it, because that is in the best interests of the public. I support the legislation.

David Bradbury (Lindsay, Australian Labor Party, Assistant Treasurer ) Share this | Link to this | Hansard source

I thank all members who have contributed to the debate on the Financial Framework Legislation Amendment Bill (No. 2) 2012. In particular I acknowledge the contribution of the member for Blair, who, apart from being a very effective local member, is one of the hardest working legislators in this place.

This is the 10th financial framework legislation amendment bill since 2004. It forms part of an ongoing program to address financial framework issues as they are identified, and it assists in ensuring that specific provisions in existing legislation remain clear and up to date. This bill has been put together in collaboration with the relevant ministers and their departments.

This bill, if enacted, will clarify specific provisions in 21 acts, across six portfolios, to establish a better way to deal with overpayments which are administrative or technical in nature. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.