Linda Burney (Barton, Australian Labor Party) Share this | Link to this | Hansard source

I wish to make a statement on behalf of the Joint Committee of Public Accounts and Audit concerning the draft budget estimates for the Australian National Audit Office and the Parliamentary Budget Office for 2025-26.

On behalf of the committee, I present this statement on the draft budget estimates of the Australian National Audit Office, the ANAO, and the Parliamentary Budget Office, the PBO. The committee is required, under the Public Accounts and Audit Committee Act 1951 and the Parliamentary Service Act 1999 to consider the draft budget estimates of the ANAO and the PBO, respectively, and to make recommendations regarding these estimates to both houses of parliament. The statement on behalf of the committee, in advance of the budget being handed down, is an important transparency measure that informs the parliament and the public on the adequacy of the resourcing of the ANAO and the PBO. The committee considers both offices vital in supporting the work of this parliament and strengthening integrity and transparency in public administration.

The committee has carefully scrutinised the ANAO's and the PBO's draft budget estimates for 2025-26 and has resolved to endorse them subject to further review of the costings and final estimates, which may be agreed with the Department of Finance. The committee is advising that additional funding of $96.1 million is being sought by the ANAO over the forward estimates, requiring an ongoing funding increase of $24.9 million per year. The Auditor-General has also indicated to the committee in a recent update that the ANAO expects to run an operating loss of approximately $6.1 million in 2024-25, similar to the loss of $6 million ANAO incurred in 2023-24.

The ANAO's request for increased funding is fully supported by the committee, which regards it as critical in ensuring the future accountability, transparency, efficiency and effectiveness of the expenditure of the Australian taxpayer's money. The committee has been concerned, over many successive parliamentary terms, by the unsustainability of the ANAO's long-term financial position and the risk that this poses to the operational independence and its ability to effectively perform its vital statutory roles. The current funding model for the ANAO is simply not sustainable due to the continuing and growing cost pressures it is facing from increasingly more expensive financial statement audits, essential technological upgrades and increased compliance for regulatory demand.

The efficiency dividend has made a significant impact, also, on ANAO and has been a principal driver of its prior supplementary funding request. ANAO has advised the committee that, if the efficiency dividend had not been applied, its appropriation would have been $104 million in 2024-25, an increase of $28.6 million.

The committee's considered view is that making these funds available for other executive functions is having an entirely opposite effect on the efficiency dividend's intended purpose, because it is endangering the even greater savings for the taxpayer through effective auditing. The committee has supported the removal of the efficiency dividend from ANAO for many years and continues to urge the government to do so.

Another impact of the funding constraints faced by the ANAO is a reduction in the number of performance audits that it can perform. The committee recommended in 2022, in its review of the Auditor-General Act 1997, that 48 discretionary performance audits should be performed by the ANAO each financial year to ensure proper oversight of public expenditure. The Auditor-General has recently advised the committee, however, that to appropriately target the ANAO's available resources in the areas of highest priority, he now expects the ANAO to deliver 44 performance audits in 2024-25, to decline to between 38 and 42 performance audits in 2025-26 and the forward years. The inability of the ANAO to deliver a full work program due to funding constraints is of serious concern to the committee, as it undermines the future of robust audit functions for the Commonwealth that can foster and drive efficiency and effectiveness throughout the public sector. The ANAO has proposed that the committee request it to develop models for a more sustainable funding approach for the 2026-27 budget. The committee is supportive of this approach and anticipates that it will go forward in the next parliament.

Just briefly, on the Parliamentary Budget Office: the committee has continued to be actively engaged in the budget process in relation to the PBO, and endorses the 2025-26 budget proposals. The PBO is requesting additional ongoing funding of $1.4 million a year, amounting to $5.8 million over four years, so that eight additional staff can be employed to undertake modelling and analysis. This will enable the PBO to sustainably meet the increased demand for its services by parliamentarians and parliamentary committees. The PBO is also requesting an indexation of its additional election-year funding, so that it increases from $500,000 at present to $712,000 for 2027-28. This will enable the PBO to increase its recruitment of additional staff in an election year from four to six.

Finally, the PBO is requesting an equity injection of $6 million to support its independence by reinstating a now-almost-depleted financial buffer of the same amount given to the PBO under its establishment in 2012. This has been supported by the committee in the past and will be a crucial resource to enable the PBO to manage risks to its operational independence, mitigate unexpected or unanticipated budget pressures and meet future needs of data models and technology uplifts. It is clear to the committee that, without these additional funds, the PBO may not be able to adequately perform many of the services that have become so valued and essential to parliamentarians. This includes timely responses to the ever-increasing number of requests for costing analysis, the needed expansion of the PBO's budget-visualisation and self-help interactive tools, and meeting an increased governance compliance burden. The JCPAA confirms its continuing support for the PBO and its role in providing valuable information and analysis to all parliamentarians to better inform public debate.

I thank the Auditor-General and the Parliamentary Budget Office for their work in support of the parliament and the JCPAA. I also thank the deputy chair and my fellow committee members for their thoughtful and detailed consideration of these budget requests.

I ask leave of the House to present a copy of my statement and the executive minutes or reports to the Joint Committee of Public Accounts and Audit.

Leave granted.

I present a copy of my statement and the executive minutes or reports 500, 503, 504, 505 and 506 of the Joint Committee of Public Accounts and Audit.

Milton Dick (Speaker) Share this | Link to this | Hansard source

I thank the member for Barton.

Sitting suspended from 18:24 to 19:31