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

On behalf of the Joint Committee of Public Accounts and Audit, I present report No. 466, the annual report of 2016-17. I move:

That the Senate take note of the report.

I am pleased, as Chair of the Joint Committee of Public Accounts and Audit, to present this annual report for 2016-17. Those familiar with the Joint Committee of Public Accounts and Audit will know and appreciate that it is one of the parliament's oldest and most autonomous joint committees.

In 2016-17, the committee again sustained high-quality scrutiny of Commonwealth expenditure and public administration matters. Through 10 active inquiries, the committee examined matters contained in 18 Auditor-General reports, a 50 per cent increase in the number of reports reviewed compared to the previous year. Themed inquiries into key aspects of public administration were a feature of the committee's inquiry activities. These themes included Commonwealth procurement, Commonwealth infrastructure spending, Commonwealth grants administration and the Commonwealth performance framework. Submissions to the committee also increased significantly, with 111 received, compared to just 56 received in the previous year. The committee also continued its strong contribution to enhancing accountability and improving efficiency in public administration, making 17 recommendations to government. Responses by Commonwealth entities are expected within a six-month time period. In 2016-17, 39 government responses were received, and I am pleased to advise the Senate that 92 per cent of these government responses were submitted on time.

This reporting period also included the commissioning of an independent review of the Parliamentary Budget Office, which detailed 16 recommendations for the evolution of the work of the Parliamentary Budget Office as well as the appointment of a new Parliamentary Budget Officer, Ms Jenny Wilkinson, following the retirement of the Parliamentary Budget Office's first and only PBO, Mr Phil Bowen. I would like to reflect for a brief moment on the report of the independent review panel into the Parliamentary Budget Office, conducted by Dr Ian Watt AC and Mr Barry Anderson. I extend the appreciation of all the committee members for the great stewardship and the great and genuine consultation that both Dr Ian Watt and Mr Barry Anderson participated in as they conducted the independent review into the PBO. It is worth noting that, in the five years that the Parliamentary Budget Office has been in existence, this is the first genuinely independent review of the PBO. I think it's worth reflecting on the significant and positive contribution the Parliamentary Budget Office has made to our democratic practice in this country. In the covering letter that Dr Ian Watt and Mr Barry Anderson sent to me as chair in closing the independent review's report, Mr Ian Watt said:

The PBO has been a successful institutional development in Australian governance. It has made a good start as an organisation, and has filled a significant gap in Australia's public policy landscape.

The PBO is regarded by stakeholders as an independent and non-partisan organisation that produces rigorous analysis relevant to public policy debate. This review has reached a similar conclusion. Notwithstanding this, we have made a number of recommendations that will help to improve the PBO's operations.

In the short time that's available to me, I want to share with the Senate the thematics that those 16 recommendations reflected on over four core theme areas. Those recommendations that were provided to us by Dr Ian Watt and Mr Barry Anderson cover four broad themes. The first is about ensuring that there is a level playing field for costings. The second is about ensuring that the accuracy of costings of policy, including election commitments, is the best possible and as accurate as possible. The third is about ensuring that there is transparency and public understanding of budget and fiscal policy settings. Finally, they provided two recommendations in regard to governance and resourcing issues relevant to the work of the Parliamentary Budget Office into the future.

As Chair of the Joint Committee of Public Accounts and Audit, I thought it timely to conduct the independent review not just because it was the five-year mark, approximately, of the Parliamentary Budget Office but, because, as we were forewarned that Mr Bowen was embarking upon his retirement, it would be necessary for the presiding officers of the Senate and the House of representatives, in close consultation with the Joint Committee of Public Accounts and Audit, to appoint the second Parliamentary Budget Officer. Before that person began their career—and I think we can expect the new Parliamentary Budget Officer to have as stellar and as a significant a contribution as Mr Bowen did—it was important that we got some independent eyes and independent analysis to review the work of the Parliamentary Budget Office and also to reset, if you like, some of the work and activity that the new Parliamentary Budget Officer might like to embark upon.

Of all the 16 recommendations, there is one recommendation that I think is particularly pertinent—and not only the workings of the parliamentary joint committee of public accounts and the Parliamentary Budget Office. I think it will bring a tremendous amount of insight into some of the debates that we are having in our country at the moment. When we have debates about future tax increases and government spending, when we think about the size and composition of government, when we think about its reach into state and territory governments, when we think about its reach into peoples' lives, what has been missing is the genuine regard that the community and key stakeholders and others have for the work of the Intergenerational report.

We know that the Intergenerational report is a piece of work done by government and owned by government, and the responsibility for taking that piece of work, that Intergenerational report, into the public domain is one for government. But what Dr Ian Watt and Mr Barry Anderson have suggested in their recommendations is that that might actually be an issue that is worthy of much closer consideration. When we are trying to find a trusted, independent, genuinely non-partisan set of analyses or records that try to give us a sense of what it is that we're actually working towards and what the challenges are that we are about to face or can expect to face as a nation, particularly around demographic change, how do we ensure that that piece of work gets the best possible authority in the public space of ideas? I'd argue that when a piece of work as significant as the Intergenerational report is owned by government sometimes we don't get the best of that report because people might view it through a partisan lens. Unfortunately, those people who are trusted with communicating the report may not be the best policy communicators. They may not even be the best political communicators.

What Dr Ian Watt and Mr Barry Anderson said in their recommendations to the committee under the heading of 'Transparency and public understanding of budget and fiscal policy settings' was that it was important to 'improve the relevance' of the PBO's self-initiated work. Importantly, they said it was important to 'consider a possible evolution of its self-initiated work program' by ensuring that the PBO:

… has the capacity to further develop its longer-term analytic ability to allow consideration to be given to transferring responsibility for the next Intergenerational Report (scheduled for 2020)—

only two-and-a-bit years away—

to the PBO.

It will be a very brave government that, in the next two to three years, transfers the Intergenerational report work to the PBO. But I genuinely think that if we are to start to move to a more mature debate in our country about how we meet the challenges of demographic change, how we meet the challenges of taxation and government spending and the reach of government, then it's important that we review and better place the work of the Intergenerationalreport, or the Treasury's Intergenerational report work, at the heart of that consideration. I'm one who thinks that, at the very minimum, we must have a conversation with ourselves about how we best do that and whether it should continue to be the domain of government.

Other key activities performed throughout the year by the Joint Committee of Public Accounts and Audit included inquiries into defence sustainment expenditure, the Defence Major projects report and consideration of the audit priorities of the parliament.

I'd like to extend my thanks to all members of the committee for their commitment throughout 2016-17. I look forward to maintaining the high standard of committee work over the coming year and, through our inquiry and oversight activities, ensuring the proper and efficient use of public moneys. I extend my special thanks to committee secretary Susan Cardell and members of the secretariat Kate Sullivan, Joel Bateman, Shane Armstrong, Emilia Schiavo, Tamara Palmer and Megan Jones, and former committee secretariat David Brunoro. I commend the report to the Senate.

I seek leave to continue my remarks.

Leave granted.

Bridget McKenzie (Victoria, National Party) Share this | Link to this | Hansard source

I, too, rise to speak on the Joint Committee of Public Accounts and Audit report 466, the annual report of 2016-17. I want to commend the committee for being one of the most collaborative committees I work on in the Senate.

Senator O'Sullivan interjecting—

Yes. Good call, Senator O'Sullivan—except for the Senate Rural and Regional Affairs and Transport Committee. As opposition senators and government senators, we are tasked with ensuring that public finances administered by the Commonwealth government are accounted for. We have a very close relationship with the ANAO. We also have a very close relationship with the Parliamentary Budget Office. I know the chair of the committee has gone to the heart of that relationship, actually farewelling Mr Bowen, who's done some great work, and welcoming our new Parliamentary Budget Officer. The involvement of the committee in that selection process augurs well for coming years, with the committee and the PBO working together to strengthen the financial reporting mechanisms to parliament and, indeed, to the broader public, which is our role.

I briefly wanted to touch on some of the work that the committee has been able to achieve over the past year. Sometimes, we get buried in our ANAO Defence procurement reports. A couple of our members are very, very passionate about this particular area of public expenditure. Even at our last hearing, the changes that have been made over time in reporting and accountability measures by the Defence Force in the spend of public money has been considerable, but there is a way to go in that particular area. I think of Ms Brodtmann's role and focus on that particular area of public policy.

I want to touch on one of the reports that I appreciated being able to be involved in prosecuting—ANAO report No. 31. It's located on page 7 of our annual report. It goes to the administration of the Higher Education Loan Program debt and repayments. This report examined how we could account for the ballooning debt that HELP has been subject to. It is a mature program based on a solid foundation of collecting student loan debt through the income system. Nevertheless, it identified scope for the Australian Taxation Office and the Department of Education and Training to make meaningful improvements to important aspects of the program's administration.

Audit No. 6 found that nine Commonwealth entities involved in the audit had made a solid start in implementing the requirements for the first corporate plan under the PGPA Act. This particular issue has consumed the committee both in the previous parliament and in this parliament in how our government departments are going to be moving to a more public, iterative process of implementing their corporate plans and how that will actually be reported back to parliamentarians and, through the parliament, back to the public.

One issue I raised was that the construction of the corporate plans and the reporting of changes was actually not going to be made in a timely enough manner for Senate estimates. So opposition senators who are keen to prosecute departmental spend and make sure that they are accountable to the outcomes identified within their corporate plans need to have that reported publicly in a timely manner so that that can be of use in Senate estimates. We were able to make those sorts of changes because the committee works in a bipartisan manner to improve the financial reporting of the departments of the Commonwealth.

In terms of ANAO reports, one of the other reports I was quite interested in was on the VET FEE-HELP scheme. We saw an increase in that loan book from $25.6 million in 2009 to $2.9 billion in 2015. That's quite an incredible jump, and it was as a result of inappropriate mechanisms and the program itself being set up in a way that almost encouraged those accessing the program to game the system. We heard horror stories, as the Labor plan rolled out, of vulnerable young people, vulnerable people in a range of communities, being offered iPads as inducements to sign up for education programs that they would never even attempt, let alone complete. It just goes to show that the Labor Party talk big, but, when it comes to actually implementing sound policy that achieves outcomes and is fiscally responsible, fail at every single measure.

It's disappointing, because this program was aimed at assisting those very vulnerable people in our community who do need to engage in the vocational education and training sector to upskill and better improve their chances of getting a job and fulfilling their potential, if you like. Many of these people may not have finished year 12, and as they age, as they mature, they find that there is something that they want to engage in. They find the appropriate training course to give them those skills and they then seek a scheme that they can enter. That was the intent. Unfortunately, because of the way it was set up, because of the failure to set up appropriate checks and balances, this failed on every measure, which is incredibly disappointing not only from a financial perspective but also for those that were taken for a ride by those unscrupulous VET providers.

It's all thanks to the coalition government—which took measures to assist that scheme and, in the end, started from scratch and designed a scheme—that we will achieve the outcomes we need to have a skilled workforce in areas of shortage and that those students can be supported through milestones as they go on that educational journey.

I do enjoy the work of the Joint Committee of Public Accounts and Audit. I commend the annual report. And, for those of us that do get a bit busy, the ANAO reports can provide some really useful information to senators in the public policy areas that you're interested in and ensure what we all want, which is the responsible spending of public money. I seek leave to continue my remarks later.

Leave granted; debate adjourned.