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Monday, 4 July 2011
Page: 7411

Mrs BRONWYN BISHOP (Mackellar) (20:55): Thank you, Madam Deputy Speaker. It is an important issue that the member for Lyne has raised. It arises from an Auditor-General's report by the Joint Standing Committee on Public Accounts and Audit, of which the member for Lyne is the chairman. He has made some pretty signif­icant recommendations, which are contained in this private member's bill. I must say I do have some sympathy with many of the issues that he has raised, which is exactly why I called the member earlier in the day to speak with him about being sympathetic to the issues that he has raised. For instance, I think there is a very good case to be made out about a clearer ability for the Auditor-General to audit GBEs, government business enterprises, and, equally, the ability to trace Commonwealth government funds which are given to state, territory and local govern­ment. There is a need to be able to pursue an audit trail. I am very sympathetic to that.

I am also very sympathetic to the case being made out for government controlled companies to be audited. Well I remember when I was first in this place that, as a member of the Joint Committee on Public Accounts, I would have very much liked to have audited the Parliament House Const­ruction Authority, which built the building in which we stand and sit today. But, because the government of the day would not agree to it, the Auditor-General had no power himself to do an audit of the authority. The argument was that it was a government controlled company and the definition of that was that, if the government appointed a majority of directors to that company, it would be a controlled company and the Auditor-General could not of his own volition audit that company. I am pleased to see that this is finally being overturned. It was something that I advocated all those years ago when I was in the Senate and it is something that I advocate now.

Another good measure in the proposed bill is for an audit of indicators, which the Auditor-General himself has recommended. Performance indicators should be part of the audit process. The bill says that an annual sample of audits should be conducted of performance indicators, but nowhere in the bill does it say what a 'sample' means and nor does it say precisely what is meant by 'performance indicators', as they vary considerably across the realm of govern­ment. The Auditor-General, in his submiss­ion to the public accounts committee did lay out some indicators of what he thought they should be, and I quote from the report: 'It is thought that the performance indicator should be a mix of quantitative and qualitative measures incorporating a range of best practice characteristics and be cost effective to collect, analyse and report against.' The Auditor-General was quite specific about what he thought was the best way to go about it, but I note that that is not really reflected in the bill. No doubt that could be remedied in future times. The member for Goldstein in his second reading speech said that the opposition would oppose the bill because it proposed that the Auditor-General should have the right to audit private sector companies which contract with the Commonwealth. I believe that is far too intrusive into the private sector. The purpose of a public sector audit and the purpose of a private sector audit are entirely separate purposes. I have long fought in this place to always retain the Auditor-General being the Auditor-General for GBEs and publicly controlled companies because I believe that the purpose of the Auditor-General in both financial audits and performance audits is to ensure that the money which is compulsorily taken from the taxpayer by way of taxation measures is properly spent.

In the private sector an auditor has a dual role to make sure that money is properly spent but also to give advice to that enterprise or individual about how they conduct their business and can do better. It is an entirely separate function and to allow the Auditor-General, which has a very specific purpose to carry out, to be intrusive into the private sector is quite unacceptable. It would lead to enormous burdens being placed upon the private sector entity, be it an individual or a firm, and would discourage people from competing for government work.

Where waste is concerned—and I pres­ume that a lot of these auditing provisions are meant to be put in place to prevent waste occurring—a better way is the one the opposition is putting forward. That is to try and see that we can prevent waste in the first place. We should put in place effective measures that could eliminate waste before it is incurred rather than just reported upon after it has occurred, as would come to light via the Auditor-General's report.

I cannot state strongly enough that the idea that the Auditor-General should be given permission to audit the private sector contractor is enough to put this bill totally at risk. I foreshadow that, when we get to consideration in detail, we will move certain amendments which would remove private sector contractors from the ambit of the bill. It would mean that all the good parts that are there would continue to be in place but the part that would allow incursion into the private sector would be taken out of the bill. We believe that is a far better outcome for people wishing to contract with the Commonwealth and it would avert additional increase of costs and red tape and bureaucracy which is never a good thing for the prosperity of the private sector.

The coalition's policy to create an office of due diligence, which would avoid waste in the first place, is a far better way to go. It would put in place mechanisms which would allow far better contracting arrangements to be entered into. I note from the inquiry that the public accounts committee held that there were particular concerns about the DMO in Defence. I think that the office of due diligence would have a great role to play in that contracting situation. But I certainly do not think that anybody's interests would be enhanced by allowing the Auditor-General to intrude into the area of the private sector.

For those reasons, I say to the mover of this private member's bill, the member for Lyne, that I think there is much in the bill that is to be commended. Some of the things that you have included are things that I personally have been fighting for over a long time and that I would be very pleased to see in place. I do have great confidence in the work of the Auditor-General and the task that he carries out in the public sector, but I reiterate I do not believe there is any place for the Auditor-General to be intruding into the private sector.

In foreshadowing those amendments in consideration in detail, I say to the member for Lyne that should he choose to accept our amendments or should they be carried—that is, to delete the private sector from the bill—we would be prepared to support the remai­nder of the bill. That was the purpose of the call that I placed to him today to have discussions with him. As we probably will not reach consideration in detail tonight, there is probably going to be an opportunity to have some further discussions. I look forward to those because I think perhaps if he reflects upon it and reads his own report in the light of those comments, he may feel that would be a good way to go. It would be a shame not to support the bill because it has that impediment. (Time expired)