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Monday, 21 May 2012
Page: 4691


Mr OAKESHOTT (Lyne) (10:20): On behalf of the Joint Committee of Public Accounts and Audit, I present the committee's report entitled Report 429: review of the 2010-11 Defence Materiel Organisation major projects report, incorporating a dissenting report. On 6 December 2006, the JCPAA unanimously agreed to recommend that the Australian National Audit Office receive additional funding to produce an annual report on progress in major defence projects. This report would detail cost, schedule and capability information for a number of large acquisition projects. The government agreed with that recommendation and approved funding for the report in the May 2008 budget. The committee's purpose in recommending funding for the annual major projects report was to provide a means by which accessible, transparent and accurate information could be made available to the parliament and the Australian public about the state of defence major acquisition projects.

The Defence Materiel Organisation 2010-11major projects report is the fourth MPR to be produced by DMO and the third to be reviewed and reported on by the committee. Therefore the committee has had the opportunity to continue to monitor and evaluate issues raised in previous inquiries. This experience in examining the functioning of the DMO MPR over time has enabled the committee to make recommendations that will improve the quality of the MPR and increase its usefulness for external stakeholders. I am pleased to inform the House that there has been an overall improvement in the preparation and presentation of data in the 2010-11 MPR and that we are now seeing largely unqualified audits being presented. In the committee's inquiry into the 2009-10 MPR, it recommended that the DMO address the ongoing issue of the presentation of financial data in base date dollars. I take pleasure in announcing that, after considerable effort on the part of the DMO and the ANAO, the Joint Committee of Public Accounts and Audit has agreed with these organisations to now accept the presentation of financial data in what are known as 'out-turned dollar' terms, which should lead to better reporting. I acknowledge that it is a small win, and somewhat of a bureaucratic win, but an important one all the same.

I also update the House on the continued identification of inconsistent internal management systems across projects. Despite some action being taken to improve the quality of information provided for the MPR, expected consistency of business systems improvements has not yet been achieved. This is an area the committee will continue to monitor and to work on with both the DMO and the ANAO.

The committee has made three recommendations to improve the quality of information provided to the public via the MPR. The first is that the Defence Materiel Organisation provide more information on activities being undertaken to minimise schedule slippage—that is, when a project falls behind schedule. The second recommends administrative changes to the way the DMO and the ANAO work together to draft the guidelines that shape the whole exercise of the MPR. The third requires the DMO to examine the way in which external stakeholders use the MPR process, and to report back to the committee for further consideration.

The committee's public hearing was spirited and informative, and while there was some disagreement amongst the committee's membership on the handling of one issue in particular within the report, it must be acknowledged that such debate is healthy, shows that all members are strongly committed to the work of the committee and, ultimately, leads to better outcomes over time. It has become clear that the DMO has made improvements in its reporting through the MPR over the past few years, and that many of the growing pains associated with the MPR have been dealt with. However, there is still more work to do, and the committee will continue to work with the DMO and the ANAO to get everything right.

This sounds a very dry exercise, but it is $41 billion annually of taxpayers' money and 28 major projects in defence capability that are in question, and this is important and fundamental work in achieving the best accountability and efficiency this House is capable of on behalf of Australian taxpayers. In commending the report to the House I thank all committee members for the work they have done. I also once again thank sincerely the work of the committee secretariat, led by David Brunoro as secretariat head.

I commend the report to the House.

In accordance with standing order 39(f) the report was made a parliamentary paper.