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 Report 486: Regulatory activities: Inquiry into Auditor-General's reports 33, 47 and 48 (2019-20) and 5 and 8 (2020-21)—report, August 2021, incorporating not a dissenting report, but some additional comments.

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

by leave—I know this is the highlight of the House's afternoon: a Public Accounts and Audit Committee report! I'll just say at the outset—I'll reassure you—that I'm not going to cover all five Auditor-General's reports that this relates to in my remarks. But I do commend the report to the House. It continues the bipartisan tradition where, overwhelmingly, government and opposition members agree on the reports. I thank the chair in particular for her collegiate work on the committee.

This report looks at a number of Auditor-General's inquiry reports into regulation. It turns the blowtorch, if you like, on the regulatory activities of departments. I would like to remark on three aspects of our report—firstly, with regard to the EPBC Act and environmental protection. That was a damning audit report. I read most of the audit reports that the Auditor-General issues—it's a fun life!—and he does terrific work on behalf of the parliament. But this is a damning audit report that calls out the government's maladministration in environmental laws. The committee's report is an unusually strong, unanimous and bipartisan condemnation of the department's performance. It is unacceptable to the committee—words that are not often used in these kinds of reports—that the audit found deficiencies in proper arrangements for conflict-of-interest risks, appropriate performance management practices and good quality assurance.

There are numerous failures. Indeed, the department—and, therefore, the government—had no idea if hundreds of permits were even being followed. They had no ability to explain to the Audit Office, and therefore to the parliament, whether approvals given for development and works in protection in some of Australia's most significant environmental places were even followed. It's also very concerning that the committee found there's a lack of records for so much of the department's work. This creates numerous risks, with the inability to deal with probity and conflict-of-interest matters and the inability to substantiate decisions.

This has gone on for years and there have been years of similarly critical reports. But I would note particularly that 95 per cent of decisions made under this government were outside statutory time frames. It's no coincidence, as came out in the public hearings, that when Tony Abbott was elected and cut 40 per cent of staff from the environment department approval times went up. The Public Service is not a magic pudding and there's a direct correlation here, as we saw when the government finally, under pressure, tipped in a bit of extra bandaid money a year ago—funnily enough, approval times started going down. So it's an important report, and I commend the committee on the thoroughness of its work.

The second thing I'd just remark on briefly is: there's an audit on TEQSA, the tertiary education quality assurance regulator. Overall, it was a reasonable audit, with mixed findings. But I'd just record the committee's particular concerns regarding TEQSA's treatment of private higher education providers. There was a clear disparity in the stakeholder surveys between the views of the public higher education providers and private higher education providers. This wasn't a major focus of the inquiry, unfortunately, because of the reluctance of private providers to be able to give evidence to the committee, because, frankly, as they told me privately, they were scared of TEQSA's random vengeance and their anti-private-provider culture.

So the committee has made unanimous recommendations, and the committee made clear that we expect, on behalf of the parliament, positive relationships by TEQSA with all types of providers, whether universities, other public higher education providers, TAFEs in some instances, or private providers, who have a legitimate place in the spectrum. We've asked to be kept up to date on the results of the next annual stakeholder survey and obviously reserve the right to turn further attention to the matter. We've made recommendations regarding changes so that TEQSA has the ability to give a bit more time to providers to comply with conditions, to avoid seemingly unnecessary appeals to the AAT, where TEQSA just about always seems to lose, and also recommendations in relation to cybersecurity.

The third and final matter I just want to note relates to the Lobbying Code of Conduct. This regulates the activity of lobbying across the Australian government. In my time as deputy chair of the committee, it's only the second time in five years that I recall that we've made additional comments, but we felt, on this matter, we needed to. The Lobbying Code of Conduct, which regulates lobbyist activity, comprises a register and the code. Overall, the Auditor-General—this is the second audit he's done—found that a more proactive approach was needed. It used to be in the Prime Minister's department; that got a little bit red-hot, so they passed it over to the Attorney-General's Department—not very well, as the audit found.

The view of Labor members is that it's now time to legislate. We need legislation to provide a stronger statutory basis for this code. We've seen numerous problems with transparency, honesty and integrity in this government that have been frequently and prominently aired in the media over recent years, and a great deal more needs to be done to restore and improve the faith and trust of the Australian public in the integrity of their national government. Now, this is no magic fix—no silver bullet—but Labor members do think that this would be a small but tangible step to helping to restore public trust, and that a legislative basis for the lobbyist code would improve compliance and indeed could provide penalties for serious or deliberate breaches of the code. Currently, there are no penalties; it's just an 'Oh well, you know, she'll be right' approach. The department says they're going to do some more stuff, but there's really no certainty.

Lobbying, of course, I'll just say, is a legitimate activity, but it has to be undertaken transparently to enhance integrity and prevent corruption. The government's refusal, so far, to legislate a basis for the lobbyist code is accompanied by their failure to introduce a national anticorruption commission, allowing their rorts—as we just heard for an hour in the debate on the MPI preceding this tabling—their waste and their corruption to go unchecked. Now, this government has shown repeatedly that it cannot be trusted to govern with respect for long-established conventions and standards; hence, in our view, a legislative approach is required. The stacking of the AAT, the breaching of all conventions and norms—they're a debate for another time. But Labor members consider that an all-out effort is now required to improve integrity in national public administration and arrest this decline in public trust in democracy and institutions. So legislating a lobbyist code would complement our commitment to a national anticorruption commission.

We know, from the Auditor-General's work and indeed the inquiry and the responses from the department, that the former, the previous, Attorney-General was actually asked for advice on this very matter, legislating the lobbyist code, by the Prime Minister, some years ago. It disappeared into the mysterious black box that is the Morrison government's work on integrity. We've still no anticorruption commission, and, it seems, still no agreement to legislate for the lobbyist code.

So thank you, Deputy Speaker. I do commend the report to the House and again thank the chair and the committee for our constructive work on this report—if I do say so myself!

Lucy Wicks (Robertson, Liberal Party) Share this | Link to this | Hansard source

[by video link] by leave—I thank the deputy chair for tabling the report this afternoon. I also thank him and all members for their work on this report and the work on the Joint Committee of Public Accounts and Audit.

One of the primary roles of this committee is to examine all the reports of the Auditor-General tabled in parliament, and the committee then periodically selects several of these reports for a further detailed review. This inquiry focused on five Auditor-General reports that examined various aspects of regulatory activity. They include the regulation of environmental approvals under the Environment Protection and Biodiversity Conservation Act by the Department of Agriculture, Water and the Environment; the management of the Register of Lobbyists by the Attorney-General's Department; the Australian Electoral Commission's regulation of financial disclosure requirements; the regulation of the Australian energy market by the Australian Energy Regulator; and the Tertiary Education Quality and Standards Agency's regulation of higher education. One of the key functions of regulatory agencies is to establish the rules and guidelines in a defined sector, industry or area. Agencies receive their regulatory powers and responsibilities through acts of the parliament, and therefore the parliament needs to be assured that they are exercising those powers and undertaking those responsibilities appropriately.

This report highlights the fact that, although the field managed by each regulator is unique, there are practices and procedures that every regulator should follow in order to be effective. First, regulators should have good systems for gathering and managing information. Relevant, timely and accessible information assists in decision-making and should be used to inform strategic planning and risk-assessment processes. Secondly, compliance and enforcement activity undertaken by regulators should be risk based and proportionate to the risk being managed. Regulators should not impose a burden on entities that is either too heavy or too light. This balance can be difficult to achieve, especially in more complex markets. Finally, the inquiry highlighted that regulators, like all government entities, need to ensure that their own performance and internal governance processes meet the standards set out in the Public Governance, Performance and Accountability Act.

A number of recommendations are set out in the report, targeting these key areas. Recommendation 1 suggests that the Department of Agriculture, Water and the Environment update the committee on projects launched in response to the ANAO's findings, including regarding ICT systems; record-keeping practices, as the deputy chair referred to; compliance risks; performance measurement frameworks; quality assurance frameworks; and the efficiency of its environmental regulation. This reflects the committee's view that the department had previously initiated projects in response to report recommendations that either remained incomplete or were ineffective. As such, the committee believes that the department will benefit from this additional oversight. Further, recommendation 2 suggests that the Auditor-General consider conducting a follow-up audit of the department in 2023 to assess the department's progress in implementing the audit report recommendations. The committee also intends to list this program in its future audit priorities to the parliament to advocate for a further audit and continued oversight of the department until substantial change is demonstrated.

Recommendation 3 suggests that the Attorney-General's Department provide a written update on the implementation of recommendations from past audit reports. This includes improvements to the post-transfer IT system, the Lobbying Code of Conduct's communication and stakeholder engagement strategy, risk management processes and an evaluation framework. The committee requests that the department provide this update within six months of the report. Again, this provides an additional level of oversight to ensure that recommendations are implemented and improvements are made to the current code of conduct. I also note the deputy chair's comments in relation to some additional comments made and would just note that some of the discussions included the fact that there wasn't sufficient evidence taken during the inquiry to include any further recommendations or views in relation to that in this report.

Recommendation 4 suggests that the Australian Public Service Commission update its guidance to government entities on machinery of government changes regarding responsibility for the implementation of parliamentary committee or ANAO recommendations. This aims to provide greater clarity and accountability throughout machinery of government changes.

Recommendation 5 suggests that TEQSA update the committee on the progress of its efforts to ensure timely reregistration and reaccreditation of low-risk providers. This recommendation is in response to a finding that TEQSA had not met its targets in this area. The agency has since advised that it's working on a number of projects to address this finding, and, given regulatory approvals form an important part of TEQSA's responsibilities, the committee is interested in the progress and outcome of these initiatives.

Recommendation 6 suggests that TEQSA identify cybersecurity as a specific risk indicator. The committee is of the strong view that Commonwealth entities should take steps to develop cyber-resilience. Assigning risk ratings to cyberthreats will assist TEQSA to more closely understand the challenges posed and work to improve the security of the entity's data and information.

Recommendation 7 suggests that the Australian government provide TEQSA with the ability to extend a deadline by mutual consent to allow providers time to submit further evidence in the interests of reducing the necessity of appeals to the AAT. This is in response to TEQSA's advice that it's required to meet legislative time frames and is therefore unable to provide additional time in these cases. This amendment, if it were to be adopted, will assist in reducing the high percentage of matters that are either resolved after an appeal is lodged or successfully appealed to the AAT, improving efficiency and reducing unnecessary regulatory burden.

In relation to the report outlining the administration of financial disclosure requirements under the Commonwealth Electoral Act, the committee acknowledges the difference in understanding between the ANAO and the Australian Electoral Commission and acknowledges the AEC's explanation of its longstanding approach to achieve transparency through disclosure. The committee also acknowledges the AEC's explanation of its educative approach and its evidence that this is appropriate in many instances, including for major political parties, candidates and donors, given the serious reputational risks of noncompliance. The AEC's response to the ANAO's report acknowledges that there is room for continuous improvement in their approach to compliance, and the committee considers that this should occur in the context of the Regulator Performance Framework.

The committee agrees with the ANAO's recommendations with respect to information management, data matching and analytics, risk management and performance measurement and considers that the administration of the scheme would be improved by their implementation. I note that the committee's comments are in the report but also note that no recommendations were made with respect to either the AEC or the ANAO with regard to the audit report's findings.

In conclusion, I would like to thank the ANAO and five audited entities for their participation in the inquiry. I would like to thank the committee secretariat for their continued and very professional assistance. I would like to thank all members of the committee for their participation in this inquiry. I commend the report to the House.

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

by leave—I present executive minutes on reports Nos 472, 482, 483 and 485 of the Joint Committee of Public Accounts and Audit. I'm sure you will all be pleased to know that I am not seeking leave to make a statement on them.