Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I present the explanatory memoranda and I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

PUBLIC GOVERNANCE, PERFORMANCE AND ACCOUNTABILITY (CONSEQUENTIAL AND TRANSITIONAL PROVISIONS) BILL 2014

Today I bring forward a package of four bills to support the implementation of the Public Governance, Performance and Accountability Act 2013 (the PGPA Act).

The PGPA Act will replace, from 1 July 2014, the existing model for Commonwealth financial management established through the Financial Management and Accountability Act 1997 (FMA Act) and the Commonwealth Authorities and Companies Act 1997 (CAC Act). The PGPA Act will become the primary resource and governance legislation for Commonwealth entities and companies.

The PGPA Act marks an important evolution in public sector management, in the same way that the introduction of the FMA Act and the CAC Act did, more than 15 years ago.

The PGPA Act was passed in the last days of the last Parliament. While the Government, then the Opposition, supported the aims of the reform process enshrined in the PGPA Act, we understandably had concerns about how its underlying principles would work in practice.

The Government continues to support the aims of the PGPA Act and places great importance on ensuring it is properly implemented.

The PGPA Act consolidates under one law the governance, performance and accountability framework for the Commonwealth and relevant entities. Detailed arrangements on how these principles will be applied are to be set out in the PGPA Rule.

The package of Bills I am introducing today involves:

The PGPA C&T Bill would, if enacted, amend more than 250 Acts across the Commonwealth to support the implementation of the PGPA Act and its related rules and instruments.

As you can see from the sheer size of the legislative package the effect of these amendments goes across all of government and is essential to effective implementation of a new resource and governance framework.

The legislation affects every portfolio, covering amendments ranging from the Auditor-General Act to the Water Act and many in between.

The legislation covers the details on when certain provisions of the PGPA Act start and when certain provisions of the FMA and CAC Acts cease operating.

It is extensive and wide-ranging in its coverage and ensures that legislation currently based on the working of the FMA and CAC Acts can work under the PGPA arrangements.

This includes clarifying where Commonwealth entities should operate in a consistent fashion and where, as a result of decisions by Parliament, an entity has particular obligations that depart from the standard approach – as in the case of the Parliamentary Departments or the Reserve Bank or the Research and Development Corporations.

The Bill would also amend the Public Service Act 1999 to address a recent recommendation of the Parliamentary Joint Committee of Public Accounts and Audit (the JCPAA).

In considering the development of draft rules under the PGPA Act, the JCPAA recommended that the Department of Finance and the Australian Public Service Commission work collaboratively to develop amendments to the PGPA Act and the Public Service Act to reduce potential confusion regarding the duties for public officials and the Australian Public Service (APS) Code of Conduct for APS employees. This is being achieved through making amendments to the Code of Conduct to align the wording of the Code with the general duties of officials in the PGPA Act.

To ensure continuing alignment with the Public Service Act, the Bill also proposes making amendments to the Parliamentary Service Act 1999 and its Code of Conduct similar to those proposed for the PS Act.

I wish to thank the Speaker and the Senate President for their prompt consideration of - and support for - these proposed changes.

The amendments to these two Acts will complement amendments to the duties of officials under sections 25-29 of the PGPA Act that were moved on the floor of this House on 4 June 2014 to amend the Public Governance, Performance and Accountability Amendment Bill 2014, and would ensure an improved alignment of the duties of officials under the PGPA Act with the corresponding duties under the PS Act and the Parliamentary Service Act.

The other three Bills in this package modify the application of the annual Appropriation Acts for 2014-15 (once passed by the Parliament) and for the two previous financial years. These Bills are designed to change the terminology in existing Appropriations Acts from the current financial legislation to the equivalent PGPA Act terminology.

Separate Bills are needed, rather than just making the amendments through the PGPA C&T Bill, as an Appropriation Act can only be amended by a subsequent Appropriation Bill.

These Bills are split to cover Appropriation Acts across the three years dealing with:

They confirm the continuing ability of entities to access the appropriations approved by the Parliament.

The package of Bills I am introducing today would, if enacted:

These Bills arise from the development of the detail needed for the implementation of the PGPA Act.

While the changes are technical in nature they provide greater certainty in relation to the operation of the Act as well as supporting the design of more operationally effective supporting rules.

The Bills, if enacted, will support the PGPA Act and simplify the regulatory requirements and contribute to long-term efficiencies, in terms of achieving improved governance, transparency and accountability arrangements for Commonwealth entities (including both non-corporate Commonwealth entities and corporate Commonwealth entities) within the Australian Government.

They are part of a broader public management reform agenda that is intended to support the government’s deregulation agenda and the active management of risk in delivering services to the Australian community.

Officials who are better able to engage with risk are less likely to develop regulatory frameworks which are unnecessarily prescriptive and out of step with commercial practice.

These Bills represent, accordingly, another crucial step to help ensure the smooth transition to a more effective financial framework for the Commonwealth.

I commend the Bills.

PUBLIC GOVERNANCE, PERFORMANCE AND ACCOUNTABILITY (CONSEQUENTIAL MODIFICATIONS OF APPROPRIATION ACTS (No. 1), (No. 3) AND No. 5)) BILL 2014

As I outlined previously, today I bring forward a package of four bills to support the implementation of the Public Governance, Performance and Accountability Act 2013 (the PGPA Act).

I now introduce the second of those Bills, the Public Governance, Performance and Accountability (Consequential Modifications of Appropriation Acts (No. 1), (No. 3) and No. 5)) Bill 2014.

This Bill will modify the application of the annual Appropriation Acts for 2014-15 (once passed by the Parliament) and for the two previous financial years, in relation to amounts for the ordinary annual services of government contained in Appropriations Acts No. 1, 3 and/or 5 for each of those years.

This Bill will confirm the continuing ability of entities to access the appropriations approved by the Parliament.

I commend the Bill.

PUBLIC GOVERNANCE, PERFORMANCE AND ACCOUNTABILITY (CONSEQUENTIAL MODIFICATIONS OF APPROPRIATION ACTS (No. 2), (No. 4) AND No. 6)) BILL 2014

The third Bill in the package is the Public Governance, Performance and Accountability (Consequential Modifications of Appropriation Acts (No. 2), (No. 4) and No. 6)) Bill 2014.

This Bill will modify the application of the annual Appropriation Acts for 2014-15 (once passed by the Parliament) and for the two previous financial years, in relation to amounts other than the ordinary annual services of government contained in Appropriations Acts No. 2, 4 and/or 6 for each of those years.

This Bill will confirm the continuing ability of entities to access the appropriations approved by the Parliament.

I commend the Bill.

PUBLIC GOVERNANCE, PERFORMANCE AND ACCOUNTABILITY (CONSEQUENTIAL MODIFICATIONS OF APPROPRIATION ACTS (PARLIAMENTARY DEPARTMENTS)) BILL 2014

The final Bill in the package is the Public Governance, Performance and Accountability (Consequential Modifications of Appropriation Acts (Parliamentary Departments)) Bill 2014.

This Bill will modify the application of the annual Appropriation Acts for 2014-15 (once passed by the Parliament) and for the two previous financial years, in relation to amounts for the Parliamentary Departments for each of those years.

This Bill will confirm the continuing ability of entities to access the appropriations approved by the Parliament.

I commend the Bill.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I rise to speak on behalf of the opposition on the Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Bill 2014 and related bills. I want to make some brief comments and I also wish to flag—which I flagged with Senator Cormann—that the opposition will be moving a single amendment in relation to this legislation.

This legislation, which commences operation on 1 July 2014 this year, will replace the FMA Act—the Financial Management and Accountability Act 1997—and the CAC Act, the Commonwealth Authorities and Companies Act 1997, as the primary financial framework legislation of the Commonwealth. The PGPA Act, which is one element of what was known as the CFAR, the Commonwealth Financial Accountability Review reforms, which Labor undertook when we were in government and whilst I was minister for finance, will consolidate in one piece of legislation all of the governance, performance and accountability requirements for Commonwealth government entities. This legislation aims to improve transparency and consistency across Commonwealth operations. It is designed as an evolution to the existing financial framework, containing new elements which are designed to improve the quality of public financial management in the Commonwealth.

I should make the point to the chamber that notwithstanding that we have facilitated passage of this legislation there has been a very considerable amount of consultation, consideration and scrutiny of this legislation. The original act, the PGPA Act, was subject to a two-year consultation and consideration process prior to being passed by the parliament last year. The PGPA Act sets out the principles of a coherent financial framework for all Commonwealth entities and aims to create a framework where Commonwealth entities have the flexibility and incentives to adopt appropriate systems and processes to achieve their objectives both efficiently and effectively.

We recognise on this side of the chamber that the amendments contained in these bills facilitate the transition from the existing financial framework, which is governed by the FMA Act and the CAC Act, to the new framework which will be governed by the PGPA Act from 1 July, 2014. In fact I note that there was a deliberate process, from the passage of legislation in the parliament last year to the commencement of the PGPA Act on 1 July this year, to ensure sufficient time for the development of supporting rules and to give effect to the operation of the PGPA Act and an assessment of any consequential amendments required to the legislation. The primary bill before the chamber, the Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Bill 2014, is a result of this process. That bill replaces references to the FMA and CAC Acts with the equivalent provisions in the PGPA Act; simplifies enabling legislation where the provisions of the PGPA Act cover a matter which was previously dealt with in that enabling legislation; and amends enabling legislation to clarify which matters, and to what extent, are covered by the act, and which matters, and to what extent, are covered by the enabling legislation. Examples of this are disclosure of interest arrangement. There are amendments to over 250 Commonwealth acts to ensure the proper implementation of the PGPA Act. This is a substantial legislative exercise.

The main bill also has provisions to provide clarity in relation to provisions in the act which would commence after 1 July 2014, and provisions within the existing financial framework which would continue to operate beyond 1 July 2014. An example of that is that entities with existing requirements to produce a corporate plan will continue to do so for the 2014-15 financial year under the requirements of their enabling legislation before those provisions cease to have effect. Similarly, provisions in relation to the presentation of audited financial statements and annual reports will continue to apply after 1 July 2014 in relation to matters for the 2013-14 financial year until those reporting obligations have been met.

There are of course other bills associated with this bill and they relate, in part, to amendments to the appropriations bills to ensure that Commonwealth entities have access to the funding approved by the parliament. As the chamber would be aware, funding in the appropriation bills is appropriated to Commonwealth entities on the basis of their status as FMA Act or CAC Act bodies, and the appropriation acts require amendments so such funding can be provided under the new framework. We hope that the amendments in the bills being debated before the chamber ensure a smooth transition to a new financial framework which was commenced whilst we were in government and developed in part. Before I move to the cleaners' issue, I would like to recognise the work of the very many officials in the Department of Finance, some of whom are here today, in both the consultation and development of this legislation and financial framework that has been undertaken.

However, Labor does have concerns about the impact of some specific items in this bill, in particular items 28, 29 and 30 of the Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Bill 2014. We understand that the combined effect of these items, the repeal of section 64 and 65 subsection 2 of the existing FMA Act, means that the legislative basis for the Commonwealth Cleaning Services Guidelines is removed. I have one or two questions in committee, and I will ask the minister about that. These cleaning services guidelines were introduced whilst I was Minister for Finance, and removing the legislative basis for these guidelines would represent an attack on some of the Commonwealth's lowest-paid workers—the people who clean our offices and clean this building. We say that it is a clear indication of the values of the Abbott government that it seeks to attack low-paid workers in this way. The Senate may recall the hype around 'repeal day'. All those amendments that the government boasted about had examples including an act that stipulated that the owner of a mule or a bullock 'required for naval military purposes' shall furnish for such purposes and the owner may have to register it from time to time, or removing the hyphen from the word 'email', or changing the phrase 'facsimile transmission' to 'fax'. But in the middle of these relatively harmless changes there was one substantial change, and that was the move to abolish the Commonwealth Cleaning Services Guidelines under the guise of red tape. Axing these guidelines which regulate the minimum pay and conditions for cleaners employed under Australian government cleaning services contracts is unjustified—completely unjustified.

This government tried to bury this attack on minimum conditions for cleaners—some of Australia's lowest-paid workers—amongst some other 8,000 regulatory changes. This attack on the wages and conditions of some of the lowest-paid workers—certainly in this place—in this country, cleaners, came without any warning. In fact, it was done very quietly. There was an announcement on the Department of Employment's website saying that it would be done. Now, with the introduction of these bills, we see how these guidelines will be abolished from the government's perspective.

People might recall prior to the election, the Prime Minister said he would not touch workers' pay and conditions. He promised he would not cut wages or penalty rates. Well, cleaners in this place and cleaners under these guidelines stand to lose up to $344 per week because of this government's decision—a cut from the Clean Start rate of just over $22 per hour to the award rate of $17.49 per hour. This hit to cleaners, who we know are already some of Australia's lowest-paid workers, under the guise of removing red tape, shows just how ideologically driven this Abbott government is. We already know that this government's first budget has acted to hurt many low- to middle-income Australians, and now through these bills the government is seeking to cut the pay of some of Australia's lowest-paid workers. I recall the Prime Minister standing in the other place on Monday, 16 June, and saying that there were no cuts to cleaners' pay. He said:

I want to make it absolutely crystal clear that no cleaner's pay is reduced… This government has not reduced the pay of any cleaner full stop, end of story. This government has not reduced the pay of any cleaner.

Eric Abetz (Tasmania, Liberal Party, Minister for Employment) Share this | Link to this | Hansard source

That's right.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

The Leader of the Government in the Senate is at the table, and he says that is right. Those opposite may not understand that going from a pay rate of $22.02 an hour to a rate of $17.49 an hour under the award is a reduction. But let me tell you, the cleaners and their families understand that.

Labor will continue to oppose any abolition of the guidelines that apply to cleaners working for Australian government agencies and contractors. We will not support that move, including in the bills that are before the Senate today. And, as I flagged, we will move an amendment when these bills are considered in committee—an amendment that seeks to protect the guidelines from being abolished as a consequence of the adoption of the new legislative framework from 1 July 2014.

We understand—and I want to confirm this in a minute with the minister—that inserting this section into schedule 2, part 2 of the PGPA (Consequential and Transitional Provisions) Bill will mean that through the operation of item 60 of the bill the guidelines will not cease to continue to be in force. That is, this amendment ensures that the guidelines will not be abolished as a result of the passage of this legislation. If supported, the amendment would allow for the continuation of the guidelines due to the operation of item 60.

I look forward to the government's support for the maintenance of these guidelines into the future. Labor will support these bills at the second reading and will support their passage subject to agreement to the amendment that I will move in the Committee of the Whole.

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Wong for her contribution to the debate on behalf of the opposition and also for facilitating efficient consideration of these bills through the Senate. As Senator Wong mentioned, the Public Governance, Performance and Accountability Act was passed in June 2013 and is due to come into effect on 1 July 2014. Many of the amendments in these consequential bills merely insert cross-references to the PGPA Act and over 250 other acts to displace references to two predecessor financial management acts. The consequential revisions ensure that governance acts for Commonwealth government bodies are not rendered ineffective in part or whole by the changeover to the PGPA regime.

Likewise, the three appropriation modification acts ensure that government entities are able to access all current appropriation acts that the parliament has previously approved. The consequential and transitional provisions in these bills are the result of extensive consultation involving about 200 Australian government bodies and other interested stakeholders from December 2013 through to February 2014. They also address all of the bipartisan recommendations that were made by the JCPAA after an extensive inquiry into this legislation.

The Leader of the Opposition in the Senate has flagged an amendment in relation to the Commonwealth Cleaning Services Guidelines 2012. I understand that your position is that you are keen to ensure that there remains a legal basis for these guidelines after these bills are passed through the Senate, and I can confirm that, while of course the government, as has previously been indicated, is not supportive of the guidelines themselves, to ensure timely commencement of this legislation as an act the government will not oppose this amendment. I commend the bills to the Senate.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

The question is that the bills now be read a second time.

Question agreed to.

Bills read a second time.