Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

In accordance with the provisions of the Auditor-General Act 1997, I present the following report of the Auditor-General: Report No. 31 of 2005-06—Performance Audit—Roads to Recovery: Department of Transport and Regional Services.

Kerry O'Brien (Tasmania, Australian Labor Party, Shadow Minister for Transport) Share this | Link to this | Hansard source

by leave—I move:

That the Senate take note of the report.

I have had a brief opportunity to peruse the report and it is one that presents some matters of concern. I can see from the report that the totality of the Roads to Recovery program is $1.45 billion, so it is not an inconsiderable amount of public funding that has been the subject of what I think the Auditor demonstrates was quite a lackadaisical approach to administration. The audit reveals that, under instruction from the government, the department placed very meagre resources to the task of administering this proposal, the distribution of funds and the acquittal of the responsibilities of local government following the receipt of those funds.

I think at one stage there were four people in the department responsible for acquitting the responsibility of local government in relation to these funds. Indeed, the Auditor’s report seems to indicate that, despite local governments being required not to reduce their ordinary expenditure on roads and certainly not to offset the work they would have carried out with their own funds with Roads to Recovery moneys, that is in fact what happened in a number of cases and that the acquittal process of the department was quite lackadaisical in following that up. Indeed, they were probably constrained in their actions because, according to the Auditor, no additional funding was provided to the department to administer the initial Roads to Recovery program. The government clearly had no intention of seeing its stated aims for the program being observed in the expenditure of the funds. That clearly is an implication of the Auditor’s report—as I said, I have had a brief opportunity to look at that report.

What the report does not do is deal with the distribution of those funds; it simply notes what the government said was the means of distribution. I think that that is a matter that the Auditor ought to have had more regard for. I am looking forward to the ANAO’s examination of the so-called strategic projects element of the Roads to Recovery program, which I do not believe is covered in this particular audit report. As senators will no doubt recall, this is the bucket of money announced before the last election of which the coalition allocated almost all before polling day exclusively in targeted coalition electorates. No application form, no process—just the cold, hard reality of corrupted policy to achieve a political end.

I do want to draw the Senate’s attention to a research paper by the ANU’s Dr Andrew Leigh that was released last weekend, which is aptly titled ‘Bringing home the bacon’. Dr Leigh’s paper examines four government funding programs over the period 2001 to 2004. Dr Leigh says:

... I observe a strong partisan component to the expenditure decisions, with more generous funding and more program grants allocated to electorates held by the party in power.

One of the programs he examines is the Roads to Recovery program. He says:

Estimating the effect of this expenditure on voting, I find targeted funding—particularly roads funding—had a positive and statistically significant impact on the swing received by the governing Coalition in the 2004 election.

Lest the government trots out the defence that coalition and non-coalition seats do not share the same characteristics, the argument put by Mr Lloyd’s spokesman on the weekend, I want to remind you of this: Dr Leigh controlled for the demographic characteristics of coalition electorates or, in his words:

This result is robust to controlling for demographic characteristics of the electorate that might have affected the allocation of funding.

So he has taken into account factors that Mr Lloyd’s spokesman seemed to suggest would account for differences in funding. If, unfortunately, Mr Lloyd is confused by the meaning of ‘controlling for demographic characteristics’, let me refer his adviser to page 16 of ‘Bringing home the bacon’. Putting the government’s defence to one side, Dr Leigh has found that the Howard government has treated road funding as an extension of the coalition’s campaign budget. His findings are as follows:

Compared with non-government seats, and controlling for relevant demographic characteristics, seats held by the National Party received on average $6.8 million more under the Roads to Recovery program and ... Liberal Party seats received $2.7 million more under the Roads to Recovery program ...

For the period 2001 to 2004, every additional $1 million in Roads to Recovery funding helped the coalition increase its share of the share of the vote by up to 0.37 per cent. When the Prime Minister announced the Roads to Recovery program in November 2000, he said:

Any suggestion ... that the funding unfairly favours Coalition electorates is totally false.

Dr Leigh’s analysis give the lie to that statement. The government must explain now why coalition seats received more average Roads to Recovery funding than non-government seats.

With the qualifications I expressed earlier, lest our position be misrepresented, I have to advise the Senate that Labor does support the Roads to Recovery program but we do not support the skewing of road funding to achieve base political ends. I present this challenge to government: demonstrate why it is not guilty of the charge levelled by Dr Leigh. It has the opportunity because, at the moment, on the face of it, the government is guilty as charged. In relation to the Auditor’s report, given further opportunity I intend to make further comment. Unless there is another person seeking to speak, I will seek leave to continue my remarks.

Leave granted; debate adjourned.