Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Hansard source

On behalf of the Labor opposition, as the shadow minister who has been given responsibility for this matter, I wish to make a few remarks in support of the Public Works Committee Amendment Bill 2006, which is before the Senate today. Before commenting on the specific purposes of the bill, it is worth drawing to the attention of the Senate that the Commonwealth Public Works Committee Act 1913 and the first meeting of the Parliamentary Standing Committee on Public Works in 1915 make the committee one of the oldest investigative committees of the parliament. We should note that fact, particularly at a time when a government—and an out-of-touch government—that now has a majority in the Senate and the House of Representatives is intent, in an arrogant and disrespectful way, on winding back and restricting, particularly in the Senate context, the investigative powers that are so important in a democracy.

We did not see any mention of reducing the investigative powers of Senate committees prior to the last election. We have seen a lot of activity reducing the power of Senate committees since the last election, but not one word about it was mentioned prior to the last election, when the government obtained a majority in this chamber. In that context, it is important to note that this is an important committee. It is overseeing, over the term of a government, hundreds of millions of dollars in public expenditures with respect to capital works.

The bill itself amends the definition of a public work to include works funded through public-private partnerships, commonly known as PPPs. PPPs are a contentious public policy area. There is no doubt about that, whatever one’s views on PPPs. They involve the government of the day—not just Commonwealth, of course—entering into a partnership relationship with the private sector, which actually provides the capital and generally owns and, in some cases, operates the public work that is undertaken. PPPs are controversial in some areas. Therefore, it is important that, in the examination of these projects, effectively, the public worth of a public work that is subcontracted in this way through a PPP should be included within the oversight of the standing committee and within the values set for examination by the committee.

That brings me to the second change: the proposal to increase the threshold value of the projects under consideration from $6 million to $15 million. I did not go back to 1915 but, in looking back over the last 30-odd years, found that the threshold in 1969 was $750,000, which was raised to $2 million in 1973 and $6 million in 1985. A little over 20 years later, the $6 million is being increased to $15 million. That is reasonable in the context of inflation over that period. There has to be a limit. We can argue about the size of the limit, but the committee simply could not function if it were required to examine every public work undertaken—it is major projects. In that context, the $15 million seems to Labor to be a reasonable figure, given the price increases of public works over the time we have considered. Finally, it provides for the threshold figure, to which I have just referred, to be varied by regulation. That is a sensible approach. To have amendments to bills to vary quantum figures and monetary amounts is generally not the best use of the parliament’s time. To vary those figures via regulation is a more efficient way of dealing with matters.

I want to also draw the attention of the Senate to a related matter. The issue of the Commonwealth’s property asset sales has been a matter that has been investigated by the Auditor-General in respect of sale and lease-back arrangements. I note that the Liberal government sold 59 properties for some $980 million in the three years to 2001. A hurdle rate—the nominal rate of return that was required to be reached or the property would be sold—was set at between 14 and 15 per cent; otherwise divestment, the sale of the asset, occurred.

The Auditor-General is a statutory, independent office which gives very effective scrutiny of the government of the day. In the time of this Liberal government with its untrammelled and total power in the Senate, cutting back the oversight of Senate committees, it is very useful and important to have a statutory, independent Auditor-General. The Auditor-General’s report noted:

The use of a hurdle rate of return that is too high would result in a sub-optimal investment outcome and financial loss to the Commonwealth when combined with long-term leaseback arrangements.

That is the comment it made with respect to examination of at least some of the property sales by the Commonwealth in that three-year period. It is an important conclusion because it indicates that, at least in some areas, the sale by the Commonwealth of property actually resulted in a loss to the Commonwealth because of the rental that the Commonwealth had to pay and there being no net gain in debt disposal by the Commonwealth against that higher net rental rate of expenditure long term by the Commonwealth.

I will finish on a bipartisan note. I acknowledge the contributions of Senator Forshaw and Senator Parry, who are both hardworking members of this committee. It is a committee that does a good job. It is one of the less publicly acknowledged committees, with minimal publicity, but it is an important aspect of parliamentary duty and responsibility that is little recognised. I thank the members of the committee. The bill we have before us and its component parts are sensible arrangements that have come from the committee itself after considerable examination by the committee in a bipartisan way. The Labor opposition supports the bill before the Senate.