Mark Bishop (WA, Australian Labor Party) Share this | Hansard source

I want to briefly respond to the remarks made by Senator Ryan and Senator Cormann. The entirety of the debate in the committee has been rather polemic in nature: emotion and not much substance or principle. The opposition are erecting the straw man of hurtful Commonwealth invasion and unwarranted attack on the proper, lawful operations of small businesses. We reject that polemical assertion outright. The purpose of the audits, if they are ever conducted on small business or medium business, is limited to an assessment of how the operations of the small business entity contributed to achieving the purpose for which it received Australian government funds. If the Commonwealth allocates $300 million to road and bridge construction, tender is made and it is allocated to a prime contractor. The prime contractor in turn retains a whole range of subcontractors—operators, tilers, electricians, welders and the lot—to carry out the job and down the chain dozens and dozens of small business operations carry out the actual work of the contract. We say it is entirely appropriate that if it is warranted, if there is a need, the Commonwealth is able to audit a particular exercise to ensure that the purpose of the money allocated is spent only and solely on the purpose for which it was allocated. If moneys are allocated for the construction of a road, the moneys must be properly spent on labour costs, on steel girders, on bitumen and on cement and the like, but not otherwise. We say that that is a most reasonable argument and a most reasonable objective.

We have noted the concerns behind the polemic argument run by Senator Ryan and Senator Cormann, so we took the trouble to inquire of the Auditor-General as to the purpose of the bill before the chair. What will it do? Once the bill is passed and the powers granted, the Auditor- General is responsible for the exercise of the powers. The Auditor-General—and I put this on the record again in this debate—advised:

The Auditor-General expects to use the power to audit private-sector entities only when the performance of a contractor would be significant in the context of the delivery of a government program. It is very unlikely that this could ever be the case in relation to a small business.

So the polemic debate that we have had for the last 40 minutes, defending the interests of the small business and which I say is a straw man, the Auditor-General in a curt, written response advised, 'It would be unlikely this would be the case in relation to a small business'.

In response to the other comments raised as to the allocation of Commonwealth funds to line departments of the Commonwealth or state entities and departments, we agree and are rigorous in ensuring that funds are properly appropriated, programs are properly designed, internal accounting and reporting responsibilities are created at the outset, and line responsibility is supervised. All of those things occur as a matter of course in the administration of Commonwealth programs. If shortcomings or deficiencies or errors are identified, we are more than happy to ensure that a proper audit and a proper regulatory process make certain that it does not occur again. We simply say that, if we have proper funding allocation, proper program design, internal accountability requirements and appropriate supervision of line staff, it is also appropriate in state government entities that receive Commonwealth funds.

Commonwealth funds, of course, is a synonym for taxpayers' funds, so we want them spent properly both at a Commonwealth level and a state level. There is an increasing use of outsourcing and an increasing shift of work to the private sector, all across the Commonwealth. You only have to go through northern New South Wales, Queensland and Western Australia to see the hundreds and hundreds—thousands—of contractors carrying out government work at ports, on roads and bridges, at schools and at community centres to understand the need to ensure that the billions of dollars that the Commonwealth appropriates from Commonwealth funds is spent on the purpose for which it is intended and no other.

We are not embarrassed by that. We say it should be the case. The reason there have not been amendments of this nature to date to the Auditor-General Act, and why it has become an issue of late, is simply that the nature and allocation of Commonwealth funding is changing. Increasingly, the Commonwealth sets a goal, a purpose, and the delivery of the purpose is allocated to a private sector entity. It could be a large construction company, a large shipbuilding company or a large defence contractor. Now that funding arrangements have changed, all we are seeking to do is to ensure the standards that were present in the act when only Commonwealth entities were responsible for the spending of Commonwealth funds are still appropriate in taxpayers' interests and that funds are properly audited and accounted for.

We note, absent the polemic from the other side of the chamber, the comments again of the Auditor-General that it would be very unlikely that this would ever be the case in relation to a small business. With those remarks, the government indicates that it will oppose the amendments moved by Senator Ryan.