Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Hansard source

I rise to speak on the Senate Standing Committee on Finance and Public Administration report, Transparency and accountability of Commonwealth public funding and expenditure. Although I am only a participating member of this committee, I note that this report deals with a number of issues in relation to the financial and reporting framework of government that Labor has spoken about previously. I want to place on record a number of issues that I think are confirmed by or arise out of the report. It is clear, from the terms of this report, that there are some real problems with and holes in the existing system, which is intended to provide transparency and accountability. Senator Murray has gone through a number of these. I have also spoken previously in this place on Australian National Audit Office reports which have identified deficiencies in the current reporting framework.

I want to talk particularly about three recommendations in the report. The first is recommendation 3, which relates to transfers of amounts between different forms of appropriations. The committee has recommended that such transfers be highlighted in reporting documents. It is a concern that a great many transfers are not disclosed until substantially after the event, and, in the interests of transparency in Commonwealth financial reports and in the reporting framework, it seems quite appropriate that there be mechanisms by which such transfers can be highlighted at the appropriate time. The committee has noted that the reporting of such transfers may not occur until well after the event. This does create difficulties for members of the public and also for senators, particularly in the context of Senate estimates in determining when such transfers have in fact occurred. I look forward to the government dealing with this issue.

Recommendation 5 deals with unspent appropriations. The committee has recommended that the agencies report the amounts of their unspent appropriations and the reasons for the underspends to Finance at the end of each financial year. It seems quite odd with this issue that there is not an easily accessible record of underspends by government. As a senator who has done estimates committees in a number of areas, I say that in some portfolios the extent to which there has been an underspend is quite extraordinary. An obvious example over the last four years has been in the Environment portfolio. I recall that a number of programs administered by the Australian Greenhouse Office over time were regularly—as I think the term was—‘rephased’, which means they could not spend as much money as the government had theoretically allocated, the programs were not up and running sufficiently and the money kept being pushed forward to an outer year. That happened throughout a number of estimates processes that I was involved in. It is difficult to know the extent to which the government is in fact spending what it says it will spend across portfolios without a more transparent mechanism for identifying that across government.

We also know that it is often difficult to determine overspends—that is, departments running operating deficits. I recall in relation to the CSIRO that it took Labor senators an estimates process of asking questions before the actual extent of the deficit which the CSIRO were running in that financial year was disclosed. It was significantly more than had been agreed with them by Finance. The actual amount of the overspend, or the deficit, was not disclosed until the estimates process. My recollection of the most recent estimates, a couple of weeks ago, is that we had the department of immigration disclosing, in the context of an estimates hearing, a $50 million or $60 million overspend, significantly more than what had been agreed with Finance. So we have unders and overs, and the government really needs to get its house in order and be clearer and more transparent about what has occurred in relation to appropriated expenditure.

I agree with the recommendation of the committee that there should be some mechanism whereby underspent appropriations are reported to the parliament with the reasons for the underspends. It might be politically embarrassing for the government, but one would have thought, given that the appropriation bills go through both this and the other chamber, that if government departments are not spending the amount that they have requested from the parliament they ought, in the interests of accountability, in fact disclose that and the reasons why. There may be reasons which are reasonable and there may not be reasons which are reasonable—and that would be a matter for political debate—but surely accountability requires that they in fact report those.

We have spoken a number of times in this place over the last couple of days—and I note my colleagues Senator Conroy, yesterday, and Senator Sherry did talk about this—about the general decline in the financial accountability standards of the Howard government, particularly over the last two or three years. There have been some reasonably high-profile examples of that. Perhaps the most notorious in recent times was the $10 billion water package, which we have spoken about on a number of occasions. Putting the media aspects aside, there is a more serious issue here. I would suggest to the chamber, and it is entirely consistent with the Auditor-General’s reports in relation to the outputs framework and the other reporting mechanisms which have been described, that, arguably, budget papers are now less transparent and less understandable for users than they have been previously.