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Wednesday, 11 December 2002
Page: 7741


Senator WONG (3:26 PM) —Senator Mason comes in here and tries to belittle this debate, saying that all we are talking about is accrual accounting. What we are actually talking about is public accountability; it is accountability to the parliament for the taxpayers' moneys which are spent. You might think that is an irrelevancy to the public. We in the Labor Party think that a proper financial framework to provide appropriate accountability to the parliament for the expenditure of public moneys is a good policy outcome. As senators before me have said, we saw changes being heralded in 1999-2000 that were going to put Australia at the forefront of transparency. What has occurred is a system which has led to less public accountability, less accountability to the parliament over the way in which moneys are spent and less accountability to the parliament in getting a real snapshot of where government finances are.

In question time today we saw Senator Minchin claim that the memo that Senator Cook discussed—a memo put out by Senator Minchin's own department—was simply indicating minor revisions to the changes which were heralded a couple of years ago. They are more than minor revisions; they are a complete revamping of the policy and a complete rewriting of the policy—a recognition and an admission by the government that their approach to the financial framework was erroneous and problematic and that it has led to less accountability. The three major changes which were pressed by the government and announced with such fanfare were: accounting on a full accrual basis; implementation of outputs and outcomes reporting; and the devolution to agencies of budget estimates construction, financial management and transactional banking. All three of those changes have not simply been revised; they have been substantially altered.

First, the government will now budget on both a cash and accrual basis. Second—and this is probably the most important issue— outputs and outcomes will be substantially revised because currently the outcomes are defined so broadly that it makes it extremely difficult for this parliament to scrutinise and properly control where the money is spent. That means that the public is provided with far less accountability on the issues of how that money is spent, where it is spent and on what programs it is spent. Finally, the third issue is the devolution to agencies of the budget estimates process. Finance has taken back control of that process on the basis that, frankly, the agencies were not providing sufficient information. Senator Chapman referred to this as a media beat-up. The facts in the memo issued by Mr Phil Bowen of the Department of Finance and Administration speak for themselves. Step by step, each of the recommendations unpack the government's previous approach on this issue and put in place a different approach, which recognises that the framework that was announced by the Treasurer simply does not add up in terms of public accountability.

This new framework has been a complete failure. We had an indication of this through the estimates process when Senator Conroy, in one of the estimates committees, asked various questions on, for example, the government's $1 billion Federation Fund and the Natural Heritage Trust. When Senator Conroy asked about the suggestion that funds allocated under the Natural Heritage Trust and the Federation Fund had been transferred between departments or not spent in line with appropriation bills passed by parliament, departmental officials were unable to answer him. In cases where parliament had scrutinised where the money was going so the public knew where it was going, but where there might have been some change to that by the departments, departmental officials were unable to indicate where and how that had occurred. That is not a process for accountability.

This government does not have a financial framework which provides sufficient accountability. Despite the fact that Senator Chapman calls this a beat-up, you can see that the respected financial press is saying exactly the same thing on this issue. Frankly, it is also consistent with the failure of the government to ensure that trust moneys held by the Commonwealth comply with the relevant legislation. There was some comment on this in question time, and senators would be aware of the fact that a recent Audit Office report indicated that only four out of 19 alleged trust funds held by the government were actually trusts as a matter of law. That is indicative of the level of accountability and scrutiny that this government can withstand in terms of its financial framework.

Question agreed to.