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Thursday, 12 February 2009
Page: 1216

Mr HAYES (5:50 PM) —I take the tongue-in-cheek remark from the previous speaker about the other bills presented today, but I am sure my learned colleague did not make that remark terribly seriously. He will have an opportunity to reassess that very shortly, I suspect.

Today I rise to speak on the Auditor-General Amendment Bill 2008 [2009], which will make minor amendments to the Auditor-General Act 1997 to implement and build on recommendations made in the report Inquiry into the Auditor-General Act by the Joint Committee of Public Accounts and Audit back in 2001.

While the amendments in this bill are minor, I think they are, nevertheless, an important step towards encouraging open communication and providing fairness, efficiency and integrity to the audit process. They will also provide legislative certainty for the Auditor-General’s practices in this regard. I understand that these amendments, as has been indicated, are noncontroversial, but there are a few matters in terms of this bill that I would like to highlight and which I think are worthwhile for the House to hear.

This is a response by this government to the report of the inquiry by the Joint Committee of Public Accounts and Audit, as I mentioned, back in 2001. The former government also made a response to that, largely agreeing to the recommendations, but this is the first time that those recommendations have actually been dealt with in the spirit of the Joint Committee of Public Accounts and Audit. The proposed amendments also include a number which are additional to the Joint Committee of Public Accounts and Audit report’s recommendations as, since that time, other areas of the act have been seen to need strengthening—those areas which have now been identified.

As we know, the Auditor-General, Mr Ian McPhee, is an officer independent of the parliament. Under the Auditor-General Act 1997 he is responsible for providing auditing services to the parliament and public sector entities. Mr McPhee, by the way, was appointed as Auditor-General back in March 2005. He is very much a career public servant it would seem. His previous position was as Deputy Secretary/General Manager, Financial Management Group, Department of Finance and Administration, where his responsibilities included managing and providing policy advice to the finance minister on: the budget and financial management framework; budget and financial reporting, and analysis for whole-of-government purposes; public sector superannuation; and the office of evaluation of audit. I put that in to indicate that we have, in Mr McPhee—the person responsible for administration under this act, as the Auditor-General—someone who has absolutely substantial credibility on all sides of this parliament. He is responsible not only for overseeing efficiency but also for ensuring that we strengthen the efficiency processes throughout the public sector and government-related sectors of the Commonwealth. Indeed, from 2003, Mr McPhee was Deputy Auditor-General at the Australian National Audit Office, where he was responsible to the Auditor-General for the delivery of the performance and assurance audit programs of that office.

Although it is the Auditor-General’s practice to give the chief executive of an audited entity a copy of the final report that is going to be tabled, this is not explicitly required under the act. This bill addresses that deficiency. It is done on the basis that this is not simply the Auditor-General being the final arbiter and referee, but that he is going to ensure that all the legal requirements of his position are observed and that, where possible, greater efficiency is extracted by the participation of those other entities which are being audited.

The bill will provide that the Auditor-General must give a copy of the report to the chief executive of an agency or, if the audited entity is a Commonwealth authority or company, to an officer of the authority or to a director or senior manager of the company, as soon as practicable after the report is completed. The bill also provides that the Auditor-General may provide a copy of a report, or extracts from a report, to any person—including the minister—or anybody who, in the Auditor-General’s opinion, has a special interest in the report.

One phenomenon of the recent decade or so has been the level of outsourcing within government services. As a consequence, the groups which may have an interest in the final draft reports are not simply confined to those responsible under the relevant public sector acts. With this increase in outsourcing and government services, there may be many groups—like contractors who are engaged to deliver government services, and consultancies—which may have been involved in performance audits. Yet there is currently no provision under the act for the Auditor-General to be required to give them copies of a report for comment. As I said earlier, this is not simply an exercise in being caught out by a referee but rather in looking to extract greater efficiencies throughout the public sector or those areas where audits are undertaken.

This bill will address this and will provide for the Auditor-General to give a copy of a proposed report, or an extract from a proposed report, to any person who, in the Auditor-General’s opinion, has a special interest in the report. The bill will also provide for the inclusion of written comments received on a proposed report to be included in the final report. Therefore, as these assessments are being made, as the preliminary findings are being canvassed, opinion and response from senior management of the various entities which are being audited can be delivered back to the Auditor-General for inclusion in the final report. Their responses will be evaluated but nevertheless included in the final draft report.

The bill will further extend the existing disclosure and confidentiality provisions, including to allow a person to disclose information if it is provided to the recipient to assist a person in conducting a performance audit and if the information was obtained or generated by a person in the course of performing the Auditor-General’s function. It will also prohibit the recipient from using or disclosing that information and, further, provide that an offence is not committed if the Auditor-General has consented to the use or disclosure of that information by the recipient. Further, the bill will clarify that the Auditor-General has no discretion not to omit information from a report where the Attorney-General has issued a certificate to the effect that the disclosure of certain information would be contrary to the public interest.

Finally, the bill will update the offence and penalty provisions in accordance with current criminal law policy. The changes to the Auditor-General Act proposed by this bill, while relatively minor, as I said earlier, are an important step towards encouraging open communication and providing fairness, effectiveness and integrity throughout the audit process, and they will provide the legislative certainty that is required for the Auditor-General’s practice. I commend the bill to the House.