Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Hansard source

The opposition have expressed a number of views with respect to the Auditor-General Amendment Bill 2011. The antecedent of this bill is the extravagant waste and misuse of taxpayers' money that occurred in this government's first term. I sat in the Finance and Public Administration Legislation Committee's estimates hearings when we heard the Auditor-General essentially say he was limited by the act and could not consider the profound waste that had occurred in some of the states and territories under the so-called Building the Education Revolution, where we know that billions of dollars of taxpayers' money was wasted in building halls that were unfit and overpriced, and are not used.

Senator McLucas interjecting—

The Auditor-General made it clear that he could not look into this, Senator McLucas. The Auditor-General said that his power was limited in determining how quickly the government could shovel the money out of the door—my words, not his. The act limited his powers. This created enormous public concern about the waste of billions and billions of dollars of government money, to say nothing of the waste with the home insulation debacle, which tragically ended in deaths. As I have said previously in this chamber, I can only imagine the outrage from the Labor Party if deaths in a workplace had occurred under a program under the previous coalition government—we would still be hearing about it today. But we heard nothing about it and, quite frankly, this government's waste of taxpayers' funds stands as an appalling example from the last 30 or 40 years of mismanagement and poorly designed programs. If you asked Australians, 'If you had a once-in-a-generation chance to invest $10 billion or $12 billion in our education system,' I can tell you the answer would not have been, 'The government's Building the Education Revolution.' They would not have wanted wrong-sized school halls, with some being badly built and many overpriced.

We know the Auditor-General has expressed concerns about the limits of his powers in chasing the money trail, particularly with the way this government has structured COAG agreements and the way the money gets sent through the states and territories. Our view is that that is primarily a product of the government's poorly designed programs, lack of oversight, poor implementation and lack of interest and concern—and indeed its lack of curiosity about efficient use of taxpayers' dollars.

This bill, as originally introduced, apart from one provision, had the coalition's support. Some coalition amendments will soon be circulated. The government have substantially changed the original private member's bill moved by the member for Lyne—the changes were substantial; they were not just technical. Our amendments take a different form, but they are aimed at achieving the same results, in essence, as put forward in the House. But we have taken into account the government's amended bill and we have accepted the structure of it, apart from these two provisions.

Our view is that the bill as amended by the government has significant costs. The ability of the Auditor-General to chase the money trail goes too far. The ability of the Auditor-General to peer into the private accounts of businesses and contractors is a profound concern. To put it simply, how does a subcontractor who might be indirectly in receipt of Commonwealth funds cope with a Commonwealth audit by the Auditor-General? This is a real concern. We have significant problems already with the aggregation of government contracts that make it difficult for small and medium business to participate in government contracts. I cannot imagine anything that would scare a small business more than the threat of an army of Canberra auditors coming into their business. We do not see a need for that provision to be instituted in this bill. Those businesses have little capacity to deal with a significant Commonwealth audit of that nature.

In our view, it would also subject them to a potential double audit. In the other place, the member for Mackellar, the shadow minister, noted that there are different purposes with public sector audits and with private sector audits. A public sector audit is limited in scope to whether the money has been spent efficiently, whether the program is designed efficiently and appropriately, and what the program's objectives are. In the private sector, as well as ensuring the accounts are correct, it is also important to note that auditors have a role in providing advice to a business. The threat of a Commonwealth audit of someone in indirect receipt of Commonwealth funds that might have gone through multiple sets of hands does not in any way relieve the business of the challenge that it would face in its normal audit, as it appropriately should. We see no reason to necessarily subject potentially a very small business that might have only a handful of employees, full-time or part-time, to an audit of that nature. That need has not been established. The real need is to exercise some oversight over these new COAG agreements and some oversight over state and territory governments, and potentially even local governments—those public sector bodies that are in receipt of Commonwealth funds, as increasingly happens under our federal arrangements.

Compliance costs are already a problem for small and medium businesses in this country. We have heard a great deal about the 220 regulations created for every single regulation that has been removed by this government. Its performance in complying with its own regulatory regime, with a number of regulatory impact statements, is poor. We have a 50- or 60-page regulatory impact statement on soccer goal posts, yet the government has exempted its own superannuation and mining taxes, and even the carbon tax, from regulatory impact assessment. We on this side find that bizarre.

It is also bizarre that the government simply does not understand the imposts that every little additional regulation places on the small and medium business sector. In particular, the threat of this may well make it significantly more difficult for small businesses to access government contracts. I do not think anyone would openly desire that and I know that on this side of the chamber we specifically oppose any measure along that line. The real problem here is that we have a government that has a careless attitude towards taxpayer funds. I do not see how subjecting a small business right at the end of the value chain is going to address the problem when we know a lot of the waste has been passed from Commonwealth department to department and then through to state governments. That is where there has been a lack of oversight. There is no demonstrated need for potentially every small and medium sized business being subjected to a Commonwealth audit.

We have also opposed the exception outlined by Senator Bishop relating to government business enterprises. I am not convinced by the arguments—I do not care how old they are—that government business enterprises should in some way be exempt from the ability of the Auditor-General to initiate an audit on his or her own volition. Leaving that power solely with the Joint Committee on Public Accounts and Audit effectively leaves that power in the hands of the government.

I do not buy the competitive neutrality argument that has been put by Senator Bishop, that we should not subject government business enterprises to something that private sector enterprises are not. That is because in the other part of this bill we see that private sector businesses, potentially small subcontractors, are subjected to the oversight of the Commonwealth Auditor-General. Why on earth should the Auditor-General be able to go and investigate the private accounts of a subcontractor on a school hall but not be able to investigate the accounts of a government business enterprise? It is a profound double standard. I do not care if the arguments have been used before, Senator Bishop. Circumstances change. We have privatised a lot of businesses. Quite frankly, government businesses use taxpayer capital whereas private sector businesses do not. If anything, my view is that government business enterprises should be prepared for a higher level of scrutiny precisely because they have had to call on the taxpayer to provide the capital for their development.

We will be moving amendments to reflect those two concerns. Our prime concern remains that the Commonwealth Auditor-General, as a large and effective organisation, needs to focus its resources on who the Commonwealth hands its money to. In this case, that money is primarily handed to the states and territories. When we look at the examples that have driven this reform, they are the waste that has occurred under this government and under the current Prime Minister before she was Prime Minister—particularly in the education and school halls phase, but also in the home insulation phase, although that was not her portfolio.

We do not want to create an extra layer of bureaucracy—a potential extra layer of compliance costs—and I put it to the government and cross benches that no argument has been put to justify potentially subjecting any small business that could be putting solar panels on a roof through a government program or subcontracting on a school hall to the might of the Auditor-General when we have had billions of dollars wasted in the first step from this chamber—it goes necessarily from Commonwealth to state and territory before it gets to the final point. That risk is not justified by any case that has been put. Similarly, there is absolutely no case for government business enterprises effectively being given a lower level of audit. They use taxpayer funds as capital and have done so over many years. We will move amendments to that effect and I understand that, if they have not already been circulated, they will be very soon.