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Wednesday, 27 November 1996
Page: 6188


Senator MURRAY(7.25 p.m.) —This evening I will be turning the Senate's attention once again to failings on accountability in government. This morning in the Senate, the Howard government demonstrated the lengths this government will go to prevent debate about scrutiny of government. The government combined with Independent Senator Mal Colston to prevent debate of Mr Kennett's plans to weaken the Auditor-General's role as an independent government agency after a Senate motion was initiated by the Australian Democrats.

In Western Australia the situation is much the same. The Court government continues to try to escape the repeated recommendations of independent inquiries which have been demanding action by government to improve and strengthen accountability in a number of areas. In fact, between them the federal and Western Australian coalition governments are mounting an assault on accountability. Through the twin effects of budget cuts and decreasing vigilance, we are retreating in the fight against impropriety, corruption and white-collar crime.

The offices of auditors-general and the ASC are a case in point. I will return to the auditors-general in a moment. First, I want to make some comments about the effect of federal government cuts to the Australian Securities Commission. I cannot do better than to quote the words of the Western Australian Director of Public Prosecutions, John McKechnie QC. He said:

Recent worrying trends are that the ASC is being wound back and moved out of its sort of sharp-end regulation. . . . The ASC started with a flourish about 6 years ago and I am worried that unless there is an appropriate will and direction and, more importantly, adequate resourcing, the same thing will happen again.

Of course, he is referring to the unchecked financial frauds of the 1980s and WA Inc. He also said:

You can't apply economic rationalism to a social service which is essentially economically irrational. . . . We investigate crime, we prosecute crime for social reasons, but you can't measure those in strict money (terms).

In the end then, the Feds are making it easier to get away with white collar crime—for individuals and companies to profit improperly without proper and aggressive policing.

To return to the auditor-general's role, the auditor-general's agency role as an independent government watchdog is one of the people's most important accountability mechanisms. It is the auditor-general who prevents the heady mix of money and power leading to corruption. The independence of the auditor-general is a crucial component of the accountability structure in our system of government. The WA Inc royal commission said:

[the Office of the Auditor General] provides a critical link in the accountability chain between the public sector, and the Parliament and the community. It alone subjects the practical conduct and operations of the public sector as a whole to regular, independent investigation and review.

It went on to say that more needed to be done if the public was to obtain the benefit and protection that the auditor-general was capable of providing.

The royal commission made a number of recommendations to strengthen the Office of the Auditor-General, including the separation of audit and financial administration legislation. The principles of independence and accountability which concerned the WA Inc royal commission were revisited in the inquiry by the Commission on Government into the legislation governing the functions of the Auditor-General. In Western Australia, the Office of the Auditor-General has stated its role as:

[to provide the Parliament with] timely relevant quality information necessary to enhance public sector accountability and performance.

For effective scrutiny of the public sector, parliament requires unimpeded access to information on public expenditure and the operation of government programs and services, including the role of public officials.

In Western Australia, there are a number of agencies established by statute which act on behalf of the public under parliamentary authority. These offices include that of the Auditor-General. The legislation establishing the Office of the Auditor-General forms part of the state's accountability system. It is intended that agencies such as the Auditor-General act independently of the executive in the performance of their duties. As such, they are required to declare or affirm that they will perform their roles in an impartial manner.

It is important that the community is assured that accountability agencies such as the Auditor-General operate effectively to provide an adequate and balanced system of public sector accountability. For the public to be so assured, it is necessary for these accountability agencies to have the broadest possible jurisdiction across the public sector; sufficient powers and resources to access information and to effectively perform their designated roles; and complementary roles which provide a comprehensive framework for accountability that is understood by both the public sector and the community.

The Commission on Government recommended that the independence of the Office of the Auditor-General be enhanced by making the Auditor-General a statutory authority. This would remove the Auditor-General's dependence on the government of the day for adequate resources.

Government agencies are the source of the bulk of the information regarding the business of government which is provided to ministers and to parliament. The nature of the political process is such that the objectivity of information provided from within the system may be open to question. Through the reports of the Auditor-General, parliament receives assessment of the information generated from within government. The WA royal commission into WA Inc. said that:

. . . it is essential that the Auditor-General, in performing his or her functions, has a right of access to all relevant information.

The power of the Office of the Auditor-General to access information and its independence are crucial elements in the accountability chain. As the Commission on Government stated in report No. 1, brought down 15 months ago and which has still not been implemented by the Court government:

The Parliament can only justify itself that the Auditor-General's assessment of the Executive's performance is objective if the Auditor-General is independent.

The Commission on Government consequently recommended that the proposed Auditor-General's Act should provide that, notwithstanding any statutory secrecy provision, the Auditor-General has the power to call for information and documents necessary for discharging the functions of the Auditor-General. In addition, the Commission on Government recommended that the Auditor-General have the right of access to cabinet decisions and related submissions subject to public interest immunity.

The recommendations of both the WA Inc. royal commission and the Commission on Government, both of them independent objective bodies, show that the Auditor-General must not be responsible to the executive—that is, the cabinet—or to the Treasurer. Both of these inquiries made recommendations which instead make the Auditor-General responsible to the parliament in terms of appointment, budget and reporting, enhancing the Auditor-General's role as the people's agent. I commend that commission on government recommendations to every parliament in Australia, particularly to the Victorian and Western Australian governments.