Mr LES SCOTT (9.49 p.m.) —Mr Speaker, it is good to see you in the chair while this important legislation is being debated. When the Minister for Finance (Mr Beazley) was making his second reading speech on these bills yesterday, he made the comment that they represent something of a landmark in the history of Commonwealth financial administration. It was very true and very correct of the minister to say that, because they replace the Audit Act 1901. Probably no more important legislation can ever be debated in this place than that relating to financial accountability. The public rightly expects and deserves public accountability to be the highest priority of members of the parliament and of the Commonwealth of Australia.

  It is certainly a pleasure for me to have the opportunity to comment on this package of legislation which will replace the Audit Act 1901. This legislation will form a cornerstone of the Commonwealth's system of financial accountability and will set in place the financial arrangements to see the Commonwealth into the next century. As you, Mr Speaker, would be aware, the Joint Committee of Public Accounts, which I am pleased to have the opportunity to chair, has been closely involved in the consultative process, culminating in the government amendments that have been proposed to the bills.

  Yesterday, during the debate on this legislation, the member for Forrest (Mr Prosser) and the member for Mitchell (Mr Cadman) in particular made some rather interesting comments revolving around a lot of the recommendations from our committee. The committee's report No. 331 was the result of this legislation having been referred to us. I think that, in itself, is another landmark. Legislation is now being referred to committees of parliament. This was the first legislation that was referred to the Joint Committee of Public Accounts, and it is also the most important legislation, as I said, we will ever debate.

  In that report we came up with some 39 recommendations. Understandably, and probably in some ways we are a little disappointed, the government has not accepted all our recommendations, but it certainly has accepted a lot of them—I think something like 70 per cent to 75 per cent of them. Thirty-five recommendations refer particularly to these bills and another four refer to the Audit Committee of Parliament, which is a separate matter in itself but I will comment on it later. I am particularly pleased that a lot of those recommendations have been picked up, while, at the same time, I am a little disappointed that some of the other ones have not been accepted.

  I think we need to bear in mind the process that we go through in referring bills to committees. I would encourage it as much as we can. At the end of the day, we have better legislation now than that which we started with. When the minister first referred this to the committee, his comments were pretty important. He said:

  As I have indicated, virtually by implication in the things that I have been saying, the government is not so proud of its authorship in this regard that it is going to take umbrage at getting additional advice from any sources and we look forward to the consultative processes yet in hand.

Similarly, I would suggest that our committee is not the custodian of all wisdom either. We have had the opportunity to look through this legislation. I do not think it would be expected that all our recommendations would be accepted.

  The government has obviously gone through them and considered them in depth and has come back with the amendments that it has put up. The government has put forward 42 amendments to the three pieces of legislation. The government has instigated some of the amendments itself. They have come out of some of the findings of, and people's contributions to, our committee rather than coming from the recommendations. I think that is a pretty important aspect that has come across.

  I would like to turn to some of the amendments that the opposition has put forward. I believe all our recommendations are important, but I would like to reflect on the ones that have not been accepted by the government—that is, the appointment of the Auditor-General and the Audit Committee of Parliament. In relation to the appointment of the Audit Committee of Parliament, we wanted greater involvement by the parliament through the Public Accounts Committee. Instead of having consultation between the minister, the Leader of the Opposition or his nominee and the chair of the Public Accounts Committee, we felt that it would be better to seek the full role of the Public Accounts Committee.

  I do not think that was meant as a sleight against me. I supported it quite strongly. I thought that having the collective wisdom of the whole committee was better than just having my own individual views as a chairperson. I felt that would have been helpful. Whilst we suggested that the minister should seek the approval of the Leader of the Opposition and the Public Accounts Committee, perhaps the minister should consult with the Leader of the Opposition first and then seek the approval of the Public Accounts Committee.

  We have come up with that position mainly because annual reporting guidelines are approved, as you may be aware, Mr Speaker, by the Public Accounts Committee; there is a formal approval process whereby the Prime Minister refers those guidelines to the Public Accounts Committee for its formal approval. We take that particular duty of the Public Accounts Committee very seriously in the processes that we go through to ensure that those guidelines meet the requirements of the parliament. There has never been a big problem with that process. We saw a similarity between the role of the Public Accounts Committee and that proposed for the Audit Committee. That was important to our committee.

  Notwithstanding that, the government has not rejected our recommendation completely out of hand; it has gone a bit further. The formation of a separate Audit Committee of Parliament is included in the motion before the Senate. The motion provides that the chairpersons of the Audit Committee will be you, Mr Speaker, and the President of the Senate. That is one of our recommendations that the government has picked up, and it is important. If we are to have a separate Audit Committee, the chair of that committee should also be consulted on the appointment of the Auditor-General. I know that gives you a big burden to carry, Mr Speaker, but I am sure you can handle it and that it will not be a problem for you. However, I feel it is important to give that status to the Audit Committee.

  The Audit Committee of Parliament is a very important committee. It should be treated accordingly and given a very high status in this place—and I am sure it will be under your guidance and that of the President. One of the essential issues to which we referred in our report No. 296 back in 1989 was that there should be an audit committee of parliament. The current Public Accounts Committee did not recommend a separate audit committee of the parliament but believed that a name change to the Joint Committee of Public Accounts to include the word `audit' would have been a more appropriate course. Given the number of committees in the parliament now and the duties of members participating in those committees, it was important from our point of view that there not be too many duplications of committees.

  The Public Accounts Committee, Mr Speaker, as you well know, takes its duties very seriously. I believe that the committee has always been held in extremely high regard, and I think that is indicated by the amendments before us wherein the government has accepted a great number of our recommendations. Such is the seriousness, importance and status of our committee.

  We believe that the JCPA could have adequately fulfilled that role. However, the government believes that those powers should be separated. I believe that comes very much out of the British model, but the situation is somewhat different in Britain. We did have the opportunity to speak to the Comptroller and Auditor-General of the UK. We did not visit him; he visited us, and we took that opportunity to discuss these aspects with him. Given the size of the British parliament compared to the size of our parliament, there is probably a greater need for a separate committee there. Also, in the British House of Commons there are 650 members compared of the 147 members in this place. Another fundamental difference is that the equivalent of the JCPA in the British parliament is chaired by a member of the opposition. That is quite different from what occurs here. However, aspects of the historicial situation in the House of Commons have been picked up in this legislation.

  Nevertheless, I respect the government's views. Through the processes, we have argued what should be done. My colleague the honourable member for Charlton (Mr Robert Brown) highlighted those views when he spoke yesterday. A lot of reports come before the parliament that we as members of parliament participate in the compilation of, and it is the case that you cannot always get your own way. We accept the democratic and party processes we have in this place.

  I was a little disappointed yesterday when the member for Mitchell, who spoke after the member for Charlton, attacked the member for Charlton and suggested that he should cross the floor and vote to support amendments put forward by the opposition that pick up some of the recommendations the government has not accepted. That is an absolute nonsense. When the member for Forrest was speaking yesterday, he did not allude to that even though he was a bit critical of the process with this legislation.

  The member for Forrest—along with you, Mr Deputy Speaker, and me—was a member of the committee which was involved with report No. 296. If people have their name on a report and things do not go their way, will they have to cross the floor to reflect their views? That would mean we would have to deal with amendments individually. If we took that course of action we would have to go through 42 amendments, which would be rather unworkable and not be a smart way to go. I was a bit disappointed when the member for Mitchell chose to attack the member for Charlton because he spoke very passionately on this legislation. The member for Charlton has played a very strong role, and even when our report was tabled here he spoke very extensively to it. I just wanted to make that point because it was rather unfortunate.

  I turn now to some of the amendments proposed by the opposition. I will not go through the FMA Bill and the CAC Bill; it is to the Auditor-General Bill that most of the opposition's amendments are proposed. I want to make a few comments about the Audit Committee because the opposition's amendment does not seem to meet the importance of the Audit Committee of Parliament. As I said earlier, we as a committee, and as a parliament, should see the real importance of this Audit Committee of Parliament. The government sees it as very important and believes the Presiding Officers should chair it as they will give it that extra status. That is a matter I have already dealt with.

  I am somewhat confused with the amendment that the member for Forrest has put forward. He suggests in his amendment that the JCPA should be the audit committee of parliament. We do not necessarily have great difficulty with that because it is what we originally recommended in report No. 331. Under the heading of `Sectional committees', proposed new clause 56 states:

Section 9 of the Principal Act is amended by inserting the following subsection after subsection (1):

"(2)As soon as practicable after the commencement of the first session of each Parliament, the Committee must appoint a Sectional Committee, to be known as the Audit Committee, consisting of 9 of its members to perform the duties set out in paragraphs 8(1)(da)—8(1)(df).'.".

I do not think that fulfils the importance that our committee put on this. We suggested that the size of the JCPA be extended by one person—from 15 to 16—to accommodate the minor parties in the parliament. In that way, everyone would have the opportunity to participate. Traditionally, a committee such as the JCPA has members from the government and opposition only and not necessarily from the minor parties.

  That fact is an important one that I think the Democrats in the other place particularly would have alluded to. Under the proposal, we recommend that the formation of the JCPA Audit Committee, as it would become known—a sectional committee of the JCPA—would lessen the importance of the Audit Committee of Parliament. I cannot come to terms with this particular amendment the opposition is proposing because it would lessen the importance of the Audit Committee. The essential things we wanted were a name change of the Joint Committee of Public Accounts to an audit committee and separate meetings when it resides as an audit committee. If the committee met as a separate audit committee, it would give it the status it rightly deserves as an extremely important committee.

  The opposition wants to form some sort of sectional committee with nine members. I assume the figure of nine came from the proposed audit committee that Senator Ray's notice of motion in the other place seeks to establish. It is proposed that it will have nine members, so I assume that is where the magic figure of nine came from. The member for Forrest failed to explain that to the House, so he might like to do so at a later stage. The opposition has also picked up the duties of the audit committee proposed in Senator Ray's notice of motion in the Senate. That is important.

  I have always felt that the Audit Committee of Parliament should be a statutory committee rather than just a committee that is formed every parliament. That is one of the things that the government should have looked at. It may wish to consider that at a later stage. That is pretty important. I am at a bit of a loss as to why the opposition would have proposed that course of action. I do not think it picks up the requirements that our own committee wanted.

  Overall, I believe the government has responded very positively to report No. 296. It has been around since 1989. Whilst it has been around for a long time—the Audit Act has been around since 1901—report No. 296 has been an important report, and our latest report is equally as important in the development of this legislation.

  This is important legislation. The amendments that the government has put forward are important. The government has picked up so many of the recommendations of our committee. Notwithstanding the areas about which I have expressed concern, I think overall the parliament will be better for this legislation at the end of the day. Our committee is a strong supporter of the role of the audit office, and that will continue in the future.

  I want to turn quickly to the FMA Bill. The government has picked up a couple of points which have not stemmed from our committee recommendations. That shows the intent of the government in responding so positively to it. The importance of committees looking at legislation before it comes to this place has been demonstrated in this exercise. It is one of the more innovative things that this parliament has taken on board. I believe all legislation should be able to go through the same process. Recently, the Public Accounts Committee visited our counterparts in New Zealand. The same process happens there and it works very effectively. It is a smaller parliament by a long shot, but the process works very effectively. Our Main Committee has helped us too.

  I am particularly pleased to have the opportunity to participate in this debate and support the legislation. As I said, even though it does not pick up all our recommendations, it has in the main picked up many of them, and I think the legislation is better for it. I look forward to the continuing debate on this legislation in this place and the other place. I also look forward to hearing the comments of our colleagues on the other side of the House in the course of this debate.