Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary for Science and Water) Share this | Hansard source

I rise to take note of the Auditor-General’s Audit report No. 8 of 2006-07, which is the performance audit of Airservices Australia’s upper airspace management contracts with the Solomon Islands government. In considering this document, I want to go to the public administration issues that are highlighted in this Auditor-General’s report. The issue was, as I said, referred in June to the Auditor-General by the former federal transport minister, Mr Truss, to investigate Airservices’ contracts with the Honiara government. While the investigation found no evidence of any criminal act by the government owned, air traffic control provider, Airservices Australia, the Auditor-General did make some very telling points. He certainly questioned the transactions worth more than $2 million that were made by the agency, suggesting that the payments could raise ‘a perception of corruption’.

This is quite an extraordinary report. When I sat down and read it I thought, ‘How could this possibly be, when we have had very strict public sector management guidelines, conditions and financial procedures in place in the federal sphere for more than 10 years and almost 15 years?’ These standard public sector management processes have been totally disregarded by Airservices Australia as it has tried to operate as a commercial entity, as a private sector organisation, when in fact it is a Commonwealth statutory authority. I would imagine, given the comments by Senator Macdonald about what he saw and the reforms he tried to put in place on Norfolk Island, that he would be aghast at the kinds of things that have been revealed by this report as well.

Going to some of those extraordinary revelations, the context is that Airservices Australia administers the payment of navigation fees to the Solomons government. It collects those fees on behalf of the Solomons government. What is quite extraordinary is that the processes and administration of Airservices Australia departed so significantly and so radically from the approach specified in the written contracts. The ink was hardly dry on the contracts before these unauthorised and unapproved variations and practices began to occur. More than $2.1 million, or 20 per cent of all the payments from the air navigation fee revenue, was paid outside the terms of the contract. Airservices made 305 payments to third parties between February 1999 and September 2003. Those payments included the expenses of an aviation adviser contracted to the Solomons government, education expenses for Solomon Islanders studying at academic institutions in a number of overseas countries, and travel expenses. The transactions included 17 cash advances and payments totalling more than $28,000, which were made by Airservices Australia’s corporate credit cards, mostly for travel allowances and travel expenses. It was totally in breach of the public sector management act, public sector management guidelines and all of the financial accountability measures that have been put in place by this government. The Auditor-General found:

Airservices Australia relied upon authorisation from Solomon Islands Government Ministers and officials as sufficient basis to depart from the terms of the written contract ... This was not only a departure from sound contract management practices but was not prudent given the number and variety of payment transactions.

We know that the Auditor-General writes in cautious terms in his reports and is always very circumspect in accusing people of bribery, corruption or corrupt practices. For the Auditor-General to make a statement that the payments could raise a perception of corruption is, I would say, an understatement.

The transactions were processed as deductions from air navigation fee revenue, which has also generated a number of irregularities in the use by Solomon Islands government ministers and officials of these funds. So we have some pretty tawdry arrangements put in place by a government owned organisation, a Commonwealth statutory authority, that should and does know better and has really operated like a cowboy in the Solomons, a very vulnerable country which we are all concerned about becoming the next failed state in the Pacific. We are concerned about what these kinds of arrangements do to undermine the credibility of RAMSI forces over there in the operation that is being undertaken.

The Auditor-General’s report actually raises as many questions as it answers. Here are some of the things that came to my mind as I read that report last night. First of all, where else have Airservices Australia been operating services in this way and what do we know about the facilitation fees that were paid to this Solomon Islands individual as the middleman for this process? How can we condone this kind of activity in developing countries where we are supposed to be providing aid to develop good governance and strong democratic processes while all the time the people who are supposed to be modelling good processes and governance are undermining those processes and allowing corrupt practices and behaviours to continue? This certainly cannot be the way we want the world to perceive we do business.

Airservices Australia operates internationally. It is operating in China at the moment, and I will be very interested when we get to estimates to ask some questions about its operations in China. The minister has advised that he has asked Airservices Australia to respond within four weeks. I certainly hope that when that response is received we have some transparency and openness about the information that is provided and that the minister places it on the public record.

I would certainly like to know why Airservices Australia had no comment to make on the report. I would have thought that there would be plenty of things to be said in defending your own reputation if it was possible to do so. I think that we have a real question to ask. I understand that since this investigation has taken place several of the people in senior management positions in Airservices Australia have been replaced. It is very telling to ask: where are these people now, are they still operating in another government agency and are they still operating with these kinds of cowboy tactics?

We have a government that is belting new and emerging democracies around the head about good practices and accusing people of corruption. This is the kind of behaviour that actually fosters corruption and the kind of behaviour that we certainly do not want to be hearing any more of. We have the AWB scandal, which the government has been trying to pretend is not an example. These are kickbacks in the same way as we have heard about with the AWB. It is symptomatic of a government that does not value transparency and integrity and it is symptomatic of a government that stinks. I seek leave to continue my remarks later.

Leave granted; debate adjourned.