Linda Reynolds (WA, Liberal Party) Share this | Hansard source

I move:

That the Senate take note of the report.

As Deputy Chair of the Joint Committee of Public Accounts and Audit, I rise to speak on the draft budget statement for the ANAO and the PBO, which was tabled earlier on my behalf. The committee is required under the Public Accounts and Audit Committee Act and the Parliamentary Services Act to consider the draft budget estimates of the ANAO and the PBO respectively, and to make recommendations to both houses of parliament regarding these estimates.

This statement, required of the committee in advance of the budget being handed down, is an important transparency measure that informs the parliament and the public on the adequacy of the ANAO's and the PBO's resourcing. The committee considers both offices vital in supporting the work of this parliament and in strengthening integrity and transparency in public administration. The committee has very carefully scrutinised the ANAO's and the PBO's draft budget estimates and has resolved to endorse them, subject to further review of the costings and final estimates which may be agreed with the Department of Finance.

The ANAO has previously received additional funding in both the 2021-22 and 2023-24 budgets to address the immediate cost pressures. However, for the current budget cycle, there are no requests for further future funding. Yet, according to its budget submission to the committee, the ANAO anticipates the need for additional funding in the future to fulfil its legislative obligations and other outputs under the present framework, primarily due to the cumulative impact of the efficiency dividend. Over successive parliamentary terms, the committee has grappled with the ANAO's long-term financial sustainability as well as the associated risk to its operational independence and its ability to fulfil its statutory roles adequately. While the ANAO can rely on accumulated reserves for the upcoming financial year, ongoing discussions have revealed that the unsustainability of its current financial model needs to be addressed. Despite their investments in technology and internal capabilities to enhance efficiency and reduce costs, the ANAO faces challenges in accommodating the cumulative impact of the efficiency dividend, particularly in its performance audit program.

The committee believes that the efficiency dividend should not be applied to the ANAO. While it is a reasonable tool for executive government to allocate resources elsewhere, evidence indicates that the ANAO cannot handle its cumulative impact without compromising its performance and audit program into the future. Its output should not fall below the number of audits that we've agreed on a bipartisan basis to be optimal, which is 48 performance audits per annum. For decades, this cycle has ensured that the ANAO faces budget deficits every few years, leading to cuts in the performance audit program. Eventually the government of the day provides supplementary funding, sometimes amid political tension. The ANAO itself estimates that the cumulative impact of the efficiency dividend from 2014-15 to 2027-28 will be $10.9 million. This issue is not new. As far back as 2008, the JCPAA highlighted the ANAO's critical role in saving billions of dollars of taxpayer money and improving agency performance. The committee strongly recommends that the ANAO be excluded from any future efficiency dividends to maintain the performance audit program at its agreed upon level.

The Parliament Budget Office estimates its expenses for 2024-25 to be $10.37 million. The committee observes from the PBO's portfolio budget statement, particularly in the 'Strategic direction' section, that the expected resourcing for 2024-25 will pose challenges for the PBO in maintaining service levels for parliamentarians' requests and fulfilling its publication and election related duties. I think all in this chamber and in the other place would agree that the Parliamentary Budget Office now provides an essential tool to all parliamentarians. The committee has also long recognised that the primary ongoing budgetary challenges for the PBO stem from sustained increases in demand for its work across the parliament, particularly requested by those in this and the other place. The increased demand for their work, alongside the depletion of their special appropriations fund, from an initial $6 million to $1.8 million, indicates that the PBO will be required to have more parliamentary supplementation.

While the PBO should continue meeting most of its financial needs from its departmental appropriation, the special fund serves as a crucial buffer for managing risks to its operational independence and covering unforeseen costs, especially given the heightened demand for its services in recent years. Although the committee has previously supported replenishing this fund in past budgets, it acknowledges recent advice from the Department of Finance indicating that, as it was originally intended to aid the PBO during its establishment phase only, obtaining additional funding would require a new policy proposal from the government.

In conclusion, the Joint Committee of Public Accounts and Audit reaffirms its steadfast support for the PBO and its crucial role in furnishing valuable information and analysis to all parliamentarians, enriching public debate. I thank the acting Auditor-General, Ms Rona Mellor PSM, and the Parliamentary Budget Officer, Mr Stein Helgeby, for their work in support of the parliament and the JCPAA. I thank committee members for their thoughtful and detailed consideration of these budget requests. I seek leave to continue my remarks later.

Leave granted; debate adjourned.