The Acting Deputy President:

You should not be eating in the chamber, Senator Sherry.

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

I apologise for chewing a jube as I entered the chamber. I admire your ruthless efficiency today, Acting Deputy President, in your earlier removal of 173 reports from the Notice Paper in some 30 seconds.

Ross Lightfoot (WA, Liberal Party) Share this | Link to this | Hansard source

I think we are on Auditor-General’s report No. 7, Senator Sherry.

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

Yes, I know, but I am just reflecting on your general approach to Auditor-General’s reports. It is very efficient. We are dealing with Audit report No. 7. Firstly, I want to acknowledge the generally fine work that the Australian National Audit Office does. It is a very important statutory independent organisation. I would have to say it is one of the few remaining statutory independent organisations that is important for the oversight of parliamentary departments and agencies against the general trend of this government—a well-known trend—of ruthlessly using its numbers in the Senate and its power through the executive in restricting our abilities to have informed and independent oversight of government operations of the day. So I am particularly pleased. I know the work of the Australian National Audit Office, the hard work, the diligence of the office in its performance of oversight of government departments and I place that on the record.

Report No. 7 is an audit report into the implementation of what is known as e-visa. This is a new program for the delivery of what is known as the working holiday maker, WHM, visa system. As the report notes, the number of temporary entrants coming to Australia on the working holiday maker visa has grown significantly. If we look at the table, figure 1.1 on page 25, we can see a steady and strong growth in visa grants over the period 1983-84 through to 2004-05, with a dip through the period 1989-90 through to 1992-93. There is growth, for example, over the last four years from 2001-02 off a base then of some 80,000, at a fairly consistent growth rate of approximately 9,000 to 10,000 visas, to a total of approximately 116,000 in the year 2004-05. So this is significant growth in foreigners coming under this particular visa grant program to work in Australia.

I do note that the Audit Office was generally pleased with the implementation of e-visa to handle the processing of the applications from young people from some 19 countries and regions in which Australia has a reciprocal arrangement that allows young persons to work in this country. The Audit Office did, however, identify a couple of issues where the department is required to improve performance. For example, it points out that the department is currently developing a cost-benefit analysis procedure to incorporate in all its new projects and initiatives. The implementation of e-visa presumably would result in greater efficiency and therefore lower cost in the handling of what is a very significant number of visa applications. However, to date it is not possible yet to identify what the cost-benefit analysis has been of the e-visa program. It was claimed—I think reasonably by the department—that the new system of e-visa would result in efficiencies, and it would be useful to know what the actual efficiencies and the savings to taxpayers have actually been as a result of this new processing system.

I note too the dispute about whether the visa application charge is a charge or a tax. You would think by now that disputes about charges versus taxes would be resolved. The ANAO obtained legal opinion that the visa application charge is a tax. The Department of Finance and Administration has advised that for financial reporting purposes, however, the visa charge is regarded as a regulatory fee for service and is therefore not a tax. It is an important issue because a regulatory charge is generally regarded as representing cost recovery where a tax is regarded as representing more than cost recovery. It is not a semantic issue and, whilst I do not want to go over the old debate about whether a surcharge tax in superannuation was actually a charge or a tax, it is not a matter of some insignificance or inconsequence.

I am surprised, frankly, given the examination this issue has had over a long period of time, it is not yet finally resolved. The Australian Bureau of Statistics has advised that it is planning to develop a guidance note to clarify interpretation of government financial statistics as it relates to taxes and fees for service. The ANAO considers that following its current review of cost recovery, the department should obtain clarification of the accounting classification of the VAC. I would certainly hope so and I would hope that clarifying what is a tax and what is a charge and cost recovery is finally resolved across the entire public sector, because it is an issue that is important and does need to be resolved.

More generally on the charge of $185, whilst there are no details on this point contained in the analysis, I hope that it does represent cost recovery. I do not believe that as a matter of sound policy we should be cross-subsidising anyone who enters this country to work. It is enough of a contentious issue in other areas, not so much with this particular visa classification. It is enough of a contentious issue to have had this government allowing a flood of foreign workers to enter the country. I certainly hope that they are paying the full cost of visa application services at the very least, notwithstanding some other important policy issues that follow from the flood of foreign workers that this government has been allowing into the country in recent years.

Generally there are four recommendations made by the ANAO. Two are aimed at improving the management of visa application processing within the Department of Immigration and Citizenship. The third recommendation focuses on complementing action commenced by the department during the audit to improve its performance information—the issue I referred to earlier. The fourth is focused on clarifying the accounting classification of visa application charges.

The response from the department was to welcome the report of the ANAO. It is the normal opening sentence or claim of every department to welcome the report. What is important is implementation, and it is pleasing to see that the Department of Immigration and Citizenship is going to implement the recommendations. We look forward to a concluding report that they will be recommended and implemented. (Time expired)

Question agreed to.