Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

by leave—I will move amendments (1) and (2) on sheet 4842, which has been circulated in the name of Senator Murray and Senator Sherry. In putting these suggested amendments to the bill, I am indebted to the work of the Senate Standing Committee for the Scrutiny of Bills. In its 14th report of 2005, entitled Accountability and standing appropriations on 30 November 2005, that committee indicated a considerable concern about the way in which standing appropriations had developed in the sense of a lack of sufficient consciousness of what had been going on and a lack of sufficient parliamentary attention to the matter.

Without quoting that short but valuable report in any depth, I would indicate that, as they say here, the numbers of special appropriations and the amounts of expenditure involved have steadily grown over the life of the Commonwealth. They now amount to more than 80 per cent of all Commonwealth government expenditures, and the following figures show the growth over the years. The report gives the growth over the years from 1909-10, when it was 10 per cent, to 2002-03, when it was 80 per cent. The report indicates that in 2002-03, special appropriations authorised $223.2 billion of expenditure, and they have continued to grow. The report says:

In the 12 months since the beginning of the 41st Parliament, 16 bills with standing appropriations have been introduced.

Over the page, the report continues:

The appropriation of money from Commonwealth revenue is a legislative function. The committee considers that, by allowing the executive government to spend unspecified amounts of money for an indefinite time into the future, provisions which establish standing appropriations may, depending on the circumstances of the legislation, infringe upon the committee’s terms of reference relating to the delegation and exercise of ... power.

Both the shadow minister and I have already referred to the work of the ANAO on these matters. In their report No. 15 of 2005, Performance audit: Financial management of special appropriations, they say at paragraph 10:

Given the fundamental importance of appropriations to Parliamentary control over expenditure, changes need to be made to secure proper appropriation management in the Commonwealth.

It is true that Finance and the government are trying to improve things, and this is the second of the acts which are dedicated to that end. The major problem that we have—the opposition in its very important function as an opposition in holding the government to account and crossbench parties like my own which have a similar interest—is being able to keep a tag on matters. Essentially, that is what these two amendments are about. They are amendments which require there to be a consolidated register of special appropriations and a consolidated register of special accounts.

You would have heard that at the end of my speech on the second reading I was struggling to find the right word to express what I was about, and it was a ‘register’—that is the word I was looking for and could not find. This lays an administrative and record-keeping onus on the department but has a very useful effect from the point of view of accountability and the ability to marshal information.

I am aware that steps have been taken in this direction by DOFA, and they have been making progress in the area. What we are seeking to do here is to require it through legislation not just of this government and of this department of finance management but for all time or for as long as the legislation stands. I think the amendments are readily understandable on their face. I move:

(1)    Schedule 3, page 24 (after line 3), before item 3, insert:

2A After section 19

Insert:

19A Consolidated register of special appropriations

        (1)    The Minister must cause to be tabled in each House of Parliament not later than 31 August each year a list:

             (a)    identifying all special appropriations and citing the statutory provision which establishes each one; and

             (b)    specifying the date of establishment of each special appropriation and the expected duration of the special appropriation; and

             (c)    specifying the purpose for which each special appropriation is established; and

             (d)    specifying the amount expended under each special appropriation during the previous financial year.

        (2)    For the purposes of this section, special appropriation means a provision which appropriates money and which does not specify the amount of money so appropriated and includes a standing appropriation.

(2)   Schedule 3, page 24 (after line 3), before item 3, insert:

2B After section 20

Insert:

20A Consolidated Register of Special Accounts

The Minister must cause to be tabled in each House of Parliament not later than 31 August each year a list:

             (a)    identifying all Special Accounts established in accordance with section 20 or 21 of this Act; and

             (b)    specifying the date of establishment of each Special Account and the expected duration of the Account; and

             (c)    specifying the purpose for which each Special Account is established; and

             (d)    specifying the amount credited to each Special Account at the close of the previous financial year and the amount expended from the Account during that year.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

I will comment briefly because Senator Murray has canvassed the arguments well for the register of special appropriations. I am glad Senator Murray referred to the Scrutiny of Bills Committee. I do not, through you, Chair, recall who is the current chair of that committee. Senator Murray may know.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Presently, it is Senator Robert Ray. I should indicate that at the time this report came out, he was away and the deputy chair, who was a government member, was chairing the committee.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

My assumption—I think it is a correct assumption—is that it was a unanimous observation of the Scrutiny of Bills Committee. I was a member of the Scrutiny of Bills Committee for my first three years in this place and I know that, by and large, the public generally do not understand many of the processes and procedures we go through. The Scrutiny of Bills Committee is very effective at picking up, if you like, issues relating to inappropriate drafting of legislation and at the general scrutiny of legislation. It is a very effective committee. Frankly, I would have to say I do not think we took enough account of it when we were in government, from my observations, and I do not think the current government takes enough account of its observations.

A unanimous recommendation that Senator Murray has referred to is correct: the rapid growth of special appropriations, which has gone on, I think, under a number of governments over a number of years, has got to the stage where it does require a consolidated recognition and registering of the growth of these appropriations in order that parliament—and particularly the Senate—can appropriately scrutinise in a consolidated form what is occurring in this area.

It is very difficult to scrutinise special appropriations in, I think, the detail that is required not just from an opposition point of view but in terms of the public interest and from the point of view of the minor parties. I know that in my time at estimates committees and other committees, for example, where I have worked with him Senator Murray does a great job with very limited resources—as Senator Murray and I were discussing earlier in the week—in holding the government accountable in this particular area. I think a register of special appropriations is necessary in order to improve that accountability. I do not think there is any reason, given the growth of special appropriations, why the government cannot agree to what, by any reasonable judgment, is a reasonable approach to ensuring an increased accountability in this area.

Senator Murray and I have co-sponsored amendments (1) and (2), which we have dealt with together. I will be moving amendment (3), which sets a time limit for special appropriations, and, again, Senator Murray is co-sponsoring that amendment. I will make a few short observations when we get to amendment (3).

Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Link to this | Hansard source

The government understands the spirit of amendments (1) and (2) brought forward by Senator Murray and co-sponsored by the Labor Party, although it is worth noting that information on special accounts and special appropriations is already enclosed in agencies’ annual reports. Further, in relation to amendment (2), an audited list of all special accounts is detailed in the consolidated financial statements each year. This list specifies the purpose for which the special accounts were established, the balance of the special accounts, the total amount credited to each special account in the previous financial year and the total amount expended from each special account during that year.

The government will consider whether any additional transparency beyond audited agency financial statements is warranted and the best mechanism for delivering it. This would involve consultation with a range of parties, but it is worth noting that the financial reporting requirements for Commonwealth agencies and authorities are contained in finance minister’s orders made under section 63 of the Financial Management and Accountability Act 1997 and section 48 of the Commonwealth Authorities and Companies Act 1997.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

I will respond briefly as I do not want to unduly hold the time of the Senate. What the minister says is correct: the special appropriations are published in the annual reports. Does anyone have a stack of annual reports in their office? I have one. I have kept them behind my door. Every annual report comes into my office—every one of them. Do you know where that stack reaches now? It is up to my chest. It is well over a metre high.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

And you are tall. You’re taller than me.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

I am a few centimetres taller than you, Senator Murray. I have this stack of annual reports in my office—hundreds of them are produced each year. That is fair enough. I do not have a complaint about that. Departments and agencies are required to publish annual reports, and they are on the record. The problem is you have to search through hundreds of different annual reports. I suggest, Senator Colbeck, that you go back and ask for a copy of every annual report to be delivered to your office, if you do not do it already, and just see how high the stack grows. One of the great difficulties with this is that, if you want information that is common to all agencies and departments, you actually have to go through every damn annual report to consolidate all the information across agencies and departments.

Labor and the Democrats are arguing on this occasion—which we think is a special case, given the nature of special appropriations, the importance of it and its growth—that there should be a consolidated register which we can readily go to. That is what we are requesting, and we think that is reasonable in the context of what has occurred and the difficulty in going through all these reports to identify a comprehensive list.

Question negatived.

I move amendment (3):

(3)    Schedule 3, page 24 (after line 3), before item 3, insert:

2C Before section 28

Insert:

27A Time limits for special appropriations

        (1)    If a provision of an Act:

             (a)    has effect immediately before the commencement of this Act; and

             (b)    appropriates money; and

             (c)    does not specify the amount of money so appropriated;

the appropriation of money by that provision, unless otherwise provided by the Parliament, ceases to have effect at the expiration of the fourth year after the day the Financial Framework Legislation Amendment Act (No. 1) 2006 receives the Royal Assent.

        (2)    Amounts otherwise payable under a special appropriation which ceases to have effect under subsection (1) are to be paid from money appropriated by the Parliament for that purpose.

        (3)    An appropriation under subsection (2) must not have effect for more than four financial years.

I am very disappointed that the government could not accept those two previous amendments. I think they were very reasonable in terms of improving, by a centimetre or two, the level of government accountability in this area. I will not have time to conclude my remarks on amendment (3). Amendment (3) is, again, co-sponsored by the Australian Democrats and the Labor Party. It goes to setting a time limit for the special appropriations that have been under discussion in this debate.

Progress reported.