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

I move the amendment on sheet 7502 circulated in my name:

Schedule 2, page 28 (after line 15), after item 58, insert:

58A Guidelines

The amendments to section 65 of the FMA Act made by this Schedule do not affect the continuity of the Commonwealth Cleaning Services Guidelines 2012, as in force immediately before the commencement time.

In moving that amendment, I would ask the minister to just confirm that the effect of the amendment is that, absent other action by the Commonwealth, the Commonwealth Cleaning Services Guidelines 2012 continue in force.

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

I indeed confirm that. And, as I indicated in my summing-up speech, the government will not be opposing this amendment in the interests of facilitating passage of this very important piece of legislation.

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

And the minister said in his second reading speech that the JCPAA's recommendations had been responded to. Perhaps he could just provide a little more detail on that and also indicate the view of the Auditor-General.

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

Essentially nine of the recommendations have been implemented in full and a 10th recommendation in part.

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

Perhaps we will give the minister some opportunity to take a little more advice. When this matter went before the House of Representatives in the previous parliament some concerns were raised by the then shadow minister for finance, Mr Robb, about the passage of the legislation, which ultimately were largely resolved. One of the concerns related to the views of the Auditor-General and the extent to which the Auditor-General's views had been taken up in terms of the timing and in terms of recommendations about the various rules that will be put in place. I think it would be useful, given that that evidence was given publicly, if the minister could perhaps address some of the Auditor-General's views.

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

As I have indicated, the JCPAA made 10 recommendations, and they are to be found in report 441, released in May 2014. They are:

Recommendation 1

The Committee recommends that the Department of Finance review all Public Governance, Performance and Accountability Act 2013 guidance material to improve consistency in:

- the context provided

- document structure

- distinguishing between mandatory requirements and good practice terminology

The government agrees and has adopted this recommendation.

Recommendation 2

The Committee recommends that the following additional guiding principle be included as one of the guiding principles for the Public Management Reform Agenda:

- The financial framework, including the rules and supporting policy and guidance, should support the legitimate requirements of the Government and the Parliament in discharging their respective responsibilities.

The government agrees, and in fact the additional guiding principle has been adopted and will be reflected in future reforms—for example, a submission from the Department of Finance to the Senate Finance and Public Administration Legislation Committee inquiry, on 6 June 2014, into the amendments for Public Governance, Performance and Accountability Act 2013, adopted this additional guiding principle, on page three.

Recommendation 3

The Committee recommends that the Department of Finance work to ensure that any necessary amendments are made to the Auditor-General’s Act 1997 such that the Australian National Audit Office has the power to audit the full planning, performance and accountability framework under the Public Governance, Performance and Accountability Act 2013.

The government agrees, and the PGPA amendment bill included a note to section 40 to put beyond doubt the continuing power of the Auditor-General to conduct a performance audit of a Commonwealth entity at any time.

Recommendation 4

The Committee does not recommend a change to the Public Governance, Performance and Accountability Act 2013 (PGPA Act) at this time, to address the potential confusion from dual coverage with the Public Service Act 1999 (PS Act).

Instead, the Committee recommends that the Department of Finance and the Australian Public Service Commission work together to draft the necessary amendments to the PGPA Act and/or the PS Act to remove overlaps and reduce potential confusion from dual coverage, and that amendment proposals be put to the Parliament.

The government agrees, and indeed Finance has worked collaboratively with the APSC and the Department of Parliamentary Services and has agreed to amendments to the PGPA Act, to the Public Service Act and to the Parliamentary Service Act 1999, to achieve greater alignment in the duties of officials and to reduce the potential for confusion.

Recommendation 5

The Committee recommends that the Department of Finance (Finance) amend the draft guidance to s17 and s28 of the draft Public Governance, Performance and Accountability Rule 2014 to emphasise that nothing in the draft rule precludes the chair, chief executive officer and chief financial officer of a Commonwealth body from attending audit committee meetings as an observer. Finance should also widely communicate this point.

The government agrees. Finance has amended the guidance for audit committees accordingly.

Recommendation 6

The Committee recommends that draft rule s18 (Approving commitments of relevant money) of the Public Governance, Performance and Accountability Rule 2014 be amended to explicitly place an obligation on all individual officials to consider proper use and management of public resources before approving commitments of relevant money.

The government agrees.

Recommendation 7

The Committee recommends that the issue of commitments of relevant money, and the appropriateness of spending limits and associated documentation requirements set by accountable authorities, be included by the Department of Finance in the first independent review of the Public Governance, Performance and Accountability Act 2013.

The government agrees, and the PGPA Act requires the Minister for Finance, in consultation with the JCPAA, to undertake an independent review of the operation of the act and the rules—that is, section 112. The substance of this JCPAA recommendation will be considered as part of that review.

Recommendation 8

The Committee recommends that the draft guidance material supporting s18 (Approving commitments of relevant money) of the Public Governance, Performance and Accountability Rule 2014 be amended to include discussion of the reasonable use of, and the risks involved in, officials approving aggregate expenditure proposals.

The government agrees, and Finance has indeed amended the resource management guidance.

Recommendation 9

The Committee recommends that the Department of Finance continue its consultation process with stakeholders on the Public Governance, Performance and Accountability Act 2013 rules development for the post July 2014 rules and the broader Public Management Reform Agenda, based on the comprehensive consultation approach taken to date.

The government agrees, and Finance intends to continue its consultation process with stakeholders post July 2014.

Recommendation 10

The Committee recommends that the Department of Finance prepare and communicate a plan clearly outlining the anticipated dates for development and consultation of all future rules and guidance materials under the Public Governance, Performance and Accountability Act 2013, and the broader Public Management Reform Agenda.

The government agrees. Finance intends to communicate the plan for other areas of the public management reform agenda, and also consult on rules and guidance.

In the interests of completeness, in relation to recommendation 6, the government agrees with the intent of that recommendation but we are still working our way through on how best to give effect to it in practice and in detail.

The TEMPORARY CHAIRMAN: The question is that the amendment moved by Senator Wong be agreed to.

Question agreed to.

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

Minister, I did not understand the last contribution you made, which I think was a recommendation you were still considering.

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

As I indicated right at the beginning, we essentially agree with all 10 recommendations. We agree in full with nine recommendations. With recommendation 6 we agree in principle. PGPA rule 18, which recommendation 6 relates to, has been redrafted to address the JCPAA recommendation. However, we are still working through some of the details on the obligations on all officials in relation to the commitment of public monies and in relation to the mechanisms that are used in order to achieve the intent of that recommendation. We have not reached a final point in terms of how that guidance will be finalised.

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

There are a couple more issues. I would appreciate the minister's response to the following, and if he could do this in simple terms that would be good. One of the points that has been made to the members of the opposition, including me, concerns the removal of the CAC Act/FMA Act or CAC agency/FMA agency distinction, which, for those students of the history of the financial framework of the Commonwealth was one of the key strengths asserted in the 1997 framework. In bringing them together, how have some of the risks that might be associated with that been managed in this legislation.

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

The distinction is between noncorporate and corporate entities and, essentially, it is now dealt with in the same way.

Bills, as amended, agreed to.

Bills reported with amendments; report adopted.