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Thursday, 1 March 2012
Page: 2568


Ms OWENS (Parramatta) (10:21): I am actually pleased to speak on the Financial Framework Legislation Amendment Bill (No. 1) 2012. It is another one of those bills that we deal with in this House which looks like it is a behind-the-scenes bill. It deals with the way the government handles and manages the people's money. I want to make a few comments before I go specifically to the bill about a number of things that the shadow finance minister had to say today. Can I start by saying how disappointing it is that the opposition, if they really did feel that there were serious issues in this bill to deal with, did not use the time honoured tradition of moving amendments and trying to contribute to the development of the financial framework.

We have currently, as everybody knows because it is covered endlessly, a hung parliament in the lower house. We have, as we nearly always have in Australia's modern history, a Senate in which minor parties have the balance of power. Having been both in opposition and in government, I know full well that one of the ways that oppositions contribute to governance is to actually work with the government to negotiate amendments through, particularly under the conditions that we have in the lower house. If, as the shadow finance minister says, they believed that there were changes that could have been made to this bill to in fact make it better, it is a shame it is in this Federation Chamber where bills go which have bipartisan support. The fact that it is in this chamber seems to indicate that the opposition is making political points rather than considering governance issues, because if it was a governance issue, there would be an amendment and it would be in the other chamber.

But the shadow minister is right in that we must always be vigilant in finding areas that are not working as effectively as they should in regard to the government's control of the people's money. The financial framework, as it is called, underpins the appropriation expenditure and the use of money and resources within the Australian government. It is a very important feature of a government being accountable and providing transparency in their daily work with agencies, office holders and their employees. It deals with things like the framework governing the conduct of banking by government bodies, competitive neutrality, procurement guidelines, cost recovery, foreign exchange and special accounts appropriations made under the FMA Act. It covers an incredibly broad range of activity. It is very, very complex by its nature.

But because the amount of money that governments deal with is in the billions, the hundreds of billions of dollars, small errors and small changes in the guidelines in the financial framework have profound impacts in the way that government manages its money and in its relation to business. It is incredibly important that we keep an eye on this and make these kinds of adjustments on an ongoing basis.

There have in fact been nine bills since 2004. This bill is the ninth financial framework legislation amendment since 2004. It forms part of that ongoing program to address financial framework issues as they arise and assist in ensuring that specific provisions in existing legislation remain clear and up to date. It is particularly important given the growing commitment and expectation of transparency. It is particularly important, as there is more and more scrutiny of government activity, that the rules under which our public servants operate are completely clear so that when members such as the member for Goldstein do find something that they feel is not as right as it should be, they can look at the rules and the rules are clear and transparent.

Six out of nine bills have become law, with the first and the sixth bills lapsing on the prorogation of the Australian parliament for the 2004 and 2010 federal elections. The first bill focused on amending legislation to reflect the creation of special accounts, and this bill covers a range of matters, some quite significant and some less so. Firstly, it amends the Auditor-General Act 1997 to clarify that the Auditor-General may accept an appointment under the Corporations Act 2001 as the auditor of any company that the Commonwealth controls within the meaning of the Commonwealth Authorities and Companies Act 1997. Again, it seems when you read it that one would have expected that to already have been the case. This simply clarifies that that is the case.

It amends the CAC Act to ensure that directors of Commonwealth and wholly owned companies other than government business enterprises prepare budget estimates as directed by the Minister for Finance and Deregulation and that directors of Commonwealth authorities, including interjurisdictional authorities and wholly owned companies, notify their responsible minister of decisions to undertake certain significant events. Both of those provisions are ones that most people would expect are already in existence—so, again, quite a mechanical amendment.

It also amends two misdescribed provisions in the Financial Framework Legislation Amendment Act 2010. Essentially in the two provisions it replaces references to 'at common law and inequity' with the phrase 'under the general law'. Again, this is a fairly administrative amendment.

It makes four other changes to amend the Financial Management and Accountability Act 1997 to clarify commencement dates and amend the operation of drawing rights. Some of them are quite significant in their own way, but I will not go into them here. It also does something which is quite interesting. The shadow minister for finance has already spoken about this a little. It inserts a new section 35 to enable the Commonwealth to set off in whole or in part an amount owing to the Commonwealth by a person with an amount owing by the Commonwealth to the same person and make regulations with respect to this section. The shadow minister has already raised the issue of what might happen if a company had entered into an agreement with the tax office. I am glad he has raised that. By going to the minister and seeking clarification on that one he has done exactly what one expects a good opposition to do, which is to look at a bill and find areas where it can be improved or where there may be unintended consequences. I commend him for that action. It is a shame he did not take similar actions if he has concerns about other sections of this bill. Whingeing is one thing; contributing to governance from opposition is another. I would hope, quite frankly, that they would improve their performance in that area if they genuinely do have concerns.

This is an interesting new section. I have had a number of discussions with businesses lately about the cash flow ramifications when sections of the economy get locked up—one person owes this person, that person owes another one, that person owes another one. We joke sometimes about having a clearing house where everyone can come into the same room and exchange cheques or transfer electronically and essentially free up what is currently sometimes quite blocked cash flow accounts as it trickles down to the next one. I have also heard from businesses how they get into that blocked situation with government departments, where they quite legitimately owe one government department under their normal course of actions but another government department owes them for a contract and somehow they get stuck in this 'You owe us so we won't pay you' kind of scenario, which generally blocks cash flow and in many cases is quite unnecessary. With businesses which are on the negative side of this, this is quite an extraordinary, very small addition that will make their lives a whole lot easier. We do, of course, have to be concerned about the possible opposite consequences. Again, I am very pleased to have heard from the shadow minister for finance that he has clarified with the minister that the tax office will honour the arrangements that it has with business. They do involve serious cash flow issues for business and that is a good result.

The other sections of the bill involve repealing some redundant special appropriations, which is just about cleaning up the statute books. There is always a lot of stuff in the laws of Australia which is redundant. We have a constant process of trying to clean those out. This repeals two of them: the Appropriation (Development Bank) Act 1975 and the Car Dealership Financing Guarantee Appropriation Act 2009, which was the Car Dealership Act. Again, just a bit of housekeeping there.

I will finish by returning to where I started, that these bills appear to be very dry when you read them. They are in a language which I do not think is English, personally. Sometimes I have to read the paragraphs a couple of times. I am sure you get better at it if you deal in this area more often. But they are essentially about making sure that the way government operates is fair in its relationship with business, that it does not interfere in the market with a competitive advantage where that is not the intent, that when handling large amounts of money its processes are very clear. If you are handling large amounts of money, small changes have very, very large impacts. The changes make sure that transparency is continuing to improve and that the rules for people who manage people's money on our behalf in the Public Service have a very clear set of guidelines. And they make sure that the natural tendency to increase the complex of defensiveness by our Public Service as the transparency guidelines improve and there is more interest, along with a natural tendency perhaps to proliferation, is kept in check. This is an important bill, even though a little dry one. I commend it to the House.