Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The coalition will not be opposing the Financial Framework Legislation Amendment Bill (No. 1) 2011. This bill amends eight acts across five portfolios. Its purpose is to update and clarify the Commonwealth's financial framework and to amend and improve the governance and financial arrangements of existing govern­ment bodies. This bill represents the eighth financial framework legislation amendment bill since 2004. It is part of an ongoing commitment, by whoever has been in government, to address financial framework issues as they arise and as related to financial management provisions, governance struc­tures and legislative anomalies. The explan­atory memorandum to this bill states that these amendments will have no financial impact, which we accept. It goes on to say that the changes 'may lead to productivity gains', which the coalition would of course welcome.

Specifically, this bill seeks to improve the readability of the Commonwealth Authori­ties and Companies Act 1997, the so-called CAC Act, by transferring the detail relating to the corporate plans of government business enterprises into the Commonwealth Authorities and Companies Regulations 1997. It also seeks to improve the readability of the Financial Management and Account­ability Act 1997 by clarifying its interaction with the Legislative Instruments Act 2003. Various amendments are also made to six other acts and are said to reflect best practice. These include making consequen­tial amendments to the Legislative Instru­ments Act as a result of the FMA Act changes outlined earlier and updating the Wheat Export Marketing Act 2008. There are also amendments to the Wine Australia Corporation Act 1980 to update the circumstances for the provision of its annual operational plan to the responsible minister, as well as clarifying the allowable term in office—a three-year maximum—of members of a related committee, the Geographical Indications Committee, thereby removing an anomaly whereby some appointees could serve indefinitely. The amendments also update a reference in the Renewable Energy (Electricity) Act 2000 to the ‘Australian Bureau of Agricultural and Resource Economics and Sciences’, or ABARES, previously ABARE, and repeal a redundant reference to the Science and Industry Research Act.

As I mentioned, the coalition will not be opposing this bill. We do think, though, that it is a missed opportunity in the context of NBN Co., which could do with some serious improvements to its corporate governance and financial arrangements. While there are some specific proposals which will go towards improving the efficient operation and governance of entities such as Wheat Exports Australia, albeit in small way, NBN Co. is the one government business enter­prise where proper government oversight is sadly lacking. The NBN Co. annual report states that the company regularly reports to its shareholder ministers; what that means, we do not really know. The Minister for Finance and Deregulation as joint share­holder minister should of course have a very close watching brief over its activities; however, the coalition are not confident that this is presently the case.

This entity, NBN Co., will churn through taxpayers' dollars at an alarming rate. We recently saw the deal between the govern­ment, NBN Co. and Telstra formalised, which will cost taxpayers billions of dollars—a deal that will kill off fixed-line competition and create a new government monopoly. We also know that NBN Co. has already signed contracts worth $7 billion. Who knows if these contracts will produce value for money? What real incentive is there for this company to achieve value for money? Under this government, NBN Co. is under no pressure whatsoever to run a tight ship, and this legislation would have been a good opportunity to address that.

The government itself has set a dreadful example for any government business enter­prise when it comes to achieving value for money for taxpayers. It is quite extraordinary that not one but two finance ministers could endorse taxpayer-funded spending on this scale without a cost-benefit analysis. Yet we know that, in the budget, $18.2 billion of taxpayers' money or money borrowed in the name of the taxpayer will be pumped into this high-risk venture. The fact that this has been permitted to happen under the existing financial framework does indeed sound alarm bells for the coalition, as it should for people right across Australia. As I said at the outset, we will not be opposing this bill, but it does highlight that the financial framework is currently still inadequate in that it can allow a government business enterprise like NBN Co. to operate in the inadequate way that it is operating.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary for Disabilities and Carers) Share this | Link to this | Hansard source

In summing up, I thank Senator Cormann for his support for this legislation. The Financial Framework Legislation Amendment Bill (No. 1) 2011 is an omnibus bill that will amend eight acts across five portfolios to help further clarify aspects of the Commonwealth's financial framework. The bill amends the Common­wealth Authorities and Companies Act 1997 and the Financial Management and Accountability Act 1997 to improve the core financial legislation. Outside the Finance and Deregulation portfolio, changes are also made to the Legislative Instruments Act 2003, the Wheat Export Marketing Act 2008, the Wine Australia Corporation Act 1980, the Renewable Energy (Electricity) Act 2000, the Primary Industries (Excise) Levies Act 1999 and the Science and Industry Research Act 1949.

Summing up, this bill continues the government's commitment to ensure that the financial framework and legislation is up to date, accurate and clear. I thank honourable senators for their contribution to the debate and commend the bill to the chamber.

Question agreed to.

Bill read a second time.