Dean Smith (WA, Liberal Party) Share this | Hansard source

On behalf of the Joint Committee of Public Accounts and Audit, I present report No. 466, the annual report of 2016-17. I move:

That the Senate take note of the report.

I am pleased, as Chair of the Joint Committee of Public Accounts and Audit, to present this annual report for 2016-17. Those familiar with the Joint Committee of Public Accounts and Audit will know and appreciate that it is one of the parliament's oldest and most autonomous joint committees.

In 2016-17, the committee again sustained high-quality scrutiny of Commonwealth expenditure and public administration matters. Through 10 active inquiries, the committee examined matters contained in 18 Auditor-General reports, a 50 per cent increase in the number of reports reviewed compared to the previous year. Themed inquiries into key aspects of public administration were a feature of the committee's inquiry activities. These themes included Commonwealth procurement, Commonwealth infrastructure spending, Commonwealth grants administration and the Commonwealth performance framework. Submissions to the committee also increased significantly, with 111 received, compared to just 56 received in the previous year. The committee also continued its strong contribution to enhancing accountability and improving efficiency in public administration, making 17 recommendations to government. Responses by Commonwealth entities are expected within a six-month time period. In 2016-17, 39 government responses were received, and I am pleased to advise the Senate that 92 per cent of these government responses were submitted on time.

This reporting period also included the commissioning of an independent review of the Parliamentary Budget Office, which detailed 16 recommendations for the evolution of the work of the Parliamentary Budget Office as well as the appointment of a new Parliamentary Budget Officer, Ms Jenny Wilkinson, following the retirement of the Parliamentary Budget Office's first and only PBO, Mr Phil Bowen. I would like to reflect for a brief moment on the report of the independent review panel into the Parliamentary Budget Office, conducted by Dr Ian Watt AC and Mr Barry Anderson. I extend the appreciation of all the committee members for the great stewardship and the great and genuine consultation that both Dr Ian Watt and Mr Barry Anderson participated in as they conducted the independent review into the PBO. It is worth noting that, in the five years that the Parliamentary Budget Office has been in existence, this is the first genuinely independent review of the PBO. I think it's worth reflecting on the significant and positive contribution the Parliamentary Budget Office has made to our democratic practice in this country. In the covering letter that Dr Ian Watt and Mr Barry Anderson sent to me as chair in closing the independent review's report, Mr Ian Watt said:

The PBO has been a successful institutional development in Australian governance. It has made a good start as an organisation, and has filled a significant gap in Australia's public policy landscape.

The PBO is regarded by stakeholders as an independent and non-partisan organisation that produces rigorous analysis relevant to public policy debate. This review has reached a similar conclusion. Notwithstanding this, we have made a number of recommendations that will help to improve the PBO's operations.

In the short time that's available to me, I want to share with the Senate the thematics that those 16 recommendations reflected on over four core theme areas. Those recommendations that were provided to us by Dr Ian Watt and Mr Barry Anderson cover four broad themes. The first is about ensuring that there is a level playing field for costings. The second is about ensuring that the accuracy of costings of policy, including election commitments, is the best possible and as accurate as possible. The third is about ensuring that there is transparency and public understanding of budget and fiscal policy settings. Finally, they provided two recommendations in regard to governance and resourcing issues relevant to the work of the Parliamentary Budget Office into the future.

As Chair of the Joint Committee of Public Accounts and Audit, I thought it timely to conduct the independent review not just because it was the five-year mark, approximately, of the Parliamentary Budget Office but, because, as we were forewarned that Mr Bowen was embarking upon his retirement, it would be necessary for the presiding officers of the Senate and the House of representatives, in close consultation with the Joint Committee of Public Accounts and Audit, to appoint the second Parliamentary Budget Officer. Before that person began their career—and I think we can expect the new Parliamentary Budget Officer to have as stellar and as a significant a contribution as Mr Bowen did—it was important that we got some independent eyes and independent analysis to review the work of the Parliamentary Budget Office and also to reset, if you like, some of the work and activity that the new Parliamentary Budget Officer might like to embark upon.

Of all the 16 recommendations, there is one recommendation that I think is particularly pertinent—and not only the workings of the parliamentary joint committee of public accounts and the Parliamentary Budget Office. I think it will bring a tremendous amount of insight into some of the debates that we are having in our country at the moment. When we have debates about future tax increases and government spending, when we think about the size and composition of government, when we think about its reach into state and territory governments, when we think about its reach into peoples' lives, what has been missing is the genuine regard that the community and key stakeholders and others have for the work of the Intergenerational report.

We know that the Intergenerational report is a piece of work done by government and owned by government, and the responsibility for taking that piece of work, that Intergenerational report, into the public domain is one for government. But what Dr Ian Watt and Mr Barry Anderson have suggested in their recommendations is that that might actually be an issue that is worthy of much closer consideration. When we are trying to find a trusted, independent, genuinely non-partisan set of analyses or records that try to give us a sense of what it is that we're actually working towards and what the challenges are that we are about to face or can expect to face as a nation, particularly around demographic change, how do we ensure that that piece of work gets the best possible authority in the public space of ideas? I'd argue that when a piece of work as significant as the Intergenerational report is owned by government sometimes we don't get the best of that report because people might view it through a partisan lens. Unfortunately, those people who are trusted with communicating the report may not be the best policy communicators. They may not even be the best political communicators.

What Dr Ian Watt and Mr Barry Anderson said in their recommendations to the committee under the heading of 'Transparency and public understanding of budget and fiscal policy settings' was that it was important to 'improve the relevance' of the PBO's self-initiated work. Importantly, they said it was important to 'consider a possible evolution of its self-initiated work program' by ensuring that the PBO:

… has the capacity to further develop its longer-term analytic ability to allow consideration to be given to transferring responsibility for the next Intergenerational Report (scheduled for 2020)—

only two-and-a-bit years away—

to the PBO.

It will be a very brave government that, in the next two to three years, transfers the Intergenerational report work to the PBO. But I genuinely think that if we are to start to move to a more mature debate in our country about how we meet the challenges of demographic change, how we meet the challenges of taxation and government spending and the reach of government, then it's important that we review and better place the work of the Intergenerationalreport, or the Treasury's Intergenerational report work, at the heart of that consideration. I'm one who thinks that, at the very minimum, we must have a conversation with ourselves about how we best do that and whether it should continue to be the domain of government.

Other key activities performed throughout the year by the Joint Committee of Public Accounts and Audit included inquiries into defence sustainment expenditure, the Defence Major projects report and consideration of the audit priorities of the parliament.

I'd like to extend my thanks to all members of the committee for their commitment throughout 2016-17. I look forward to maintaining the high standard of committee work over the coming year and, through our inquiry and oversight activities, ensuring the proper and efficient use of public moneys. I extend my special thanks to committee secretary Susan Cardell and members of the secretariat Kate Sullivan, Joel Bateman, Shane Armstrong, Emilia Schiavo, Tamara Palmer and Megan Jones, and former committee secretariat David Brunoro. I commend the report to the Senate.

I seek leave to continue my remarks.

Leave granted.