Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

On behalf of the Joint Committee of Public Accounts and Audit I present the committee's report entitled Report 473: Defence major projects report (2016-17): inquiry based on Auditor-General's report 26 (2017-18).

Report made a parliamentary paper in accordance with standing order 39(e).

by leave—Every year the Department of Defence and the Australian National Audit Office work together to produce a consolidated review of selected major Defence acquisition projects, with the resulting report called the major projects report, or MPR. I pay tribute to the member for Canberra, who just left the chamber, for her work over her time in parliament in getting this reporting process together and her years of strong interest in bringing greater accountability to the enormous sums of taxpayer money that are spent on defence expenditure and sustainment. This year's MPR reviewed risks, challenges and complexities facing major projects in general as well as the status of 27 selected major projects in terms of cost, schedule and forecast capability. The total approved budget for the projects in this year's MPR was approximately $62 billion, covering nearly 59 per cent of the budget within the Approved Major Capital Investment Program of $105.9 billion.

The MPR is reviewed annually by the Joint Committee of Public Accounts and Audit, and of course we hold a public hearing into something so significant. The committee's focus on Defence's business management goes to the core of the committee's work on effective public administration. Possible improvements in this area are focused on risk management approaches and the sometimes optimistic assessment of delivery of capability estimates. The committee recommended reform in updating project maturity scores several years ago. However, Defence remains behind the committee's expectations, and changes remain slow and uncertain. Defence indicates that progress will be seen in the 2018-19 major projects report. The committee will continue to monitor developments in this area. A significant continuing issue to the committee and its MPR review was the Auditor-General's second consecutive qualified audit finding on the ARH Tiger helicopters project. The committee supports the Auditor-General's statement that audit standards require a judgement to be made on the substantive nature of an issue. So concerns remain about the status and costs of this project, requiring it to remain on the MPR in the near future.

The committee's report makes three recommendations aimed at continuing to drive improvements and transparent reporting of Defence's major project expenditure, recommending that Defence report on (1) progress in updating the project maturity scores three months after the tabling of the committee's report, (2) a methodology which shows how acquisition projects can transition from spreadsheet risk registers to tools with better version control measures and (3) outcomes of the sea trials of the LHD landing craft within three months of the tabling of the committee's report. I commend the report to the House.