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Tuesday, 30 November 2004
Page: 44


Senator SHERRY (3:15 PM) —The Labor Party has moved to take note of the answers to a number of questions relating to financial mismanagement by this government. In question time today I raised an important issue which was arrogantly dismissed by the Minister for Finance and Administration, Senator Minchin. I raised the latest Auditor-General's report, No. 15, which contained scathing criticisms of the financial management of a range of government departments and entities. Let me summarise what some of those criticisms were: drawings by five departments or entities relying on incorrect appropriations in 1998-99 to 2002-03 totalling $393 million; spending of $7.26 billion by one department against legislation that had not been passed by parliament—a pretty serious matter; spending of $23 million by two entities that was not approved by parliament, including $6.96 million in breach of section 83 of the Constitution—an illegal expenditure; and failure to disclose payments by two entities totalling $13.1 billion and $26.6 billion. There is a long list of financial mismanagement identified in the Auditor-General's report.

It was the finance minister's response that these were all merely technical matters. That is not what the Auditor-General's report says. It says:

While many of the issues are quite technical, in a legal sense there are important considerations of appropriate accountability, including transparency ...

The report goes on to say that there are:

... significant shortcomings in the financial management of various Special Appropriations.

My colleague Senator Kirk posed a very important and detailed question on an issue which does impact significantly on the budget, and that related to Centrelink expenditures. The representational minister, Senator Patterson, was asked why it was—and this was identified in the Auditor-General's report—that Centrelink, through failing to obtain forward estimates from its clients, was running a $250 million overdraft for part of its funding purposes. Secondly, this overdraft was not authorised. Centrelink was running an illegal overdraft at the rate of a $250 million daily debit balance. It is extraordinary that a government instrumentality such as Centrelink would be running a daily debit balance of $250 million for expenditures when the budget is in surplus. Why would you do that? It seems extraordinary financial incompetence for Centrelink to run an overdraft in those circumstances.

Senator Kirk asked whether the minister knew of this. Did the minister authorise this illegal overdraft operation at the rate of $250 million each day? Senator Kirk went on to ask the cost of this overdraft. What was the interest being paid? It is here that Senator Patterson, in response, demonstrated that she apparently did know something about it. She assured the Senate that she knew what the interest rate was. She would not disclose what it was. It is absolutely ridiculous and absurd financially to be running an overdraft at the rate of $250 million per day. The Labor Party wants to know what the interest rate was. What was the interest bill? Was this overdraft authorised by the minister? If so, the Auditor-General said it was illegal—it was being operated illegally. This is a very important issue. It is not just some trifling amount of money, as Senator Minchin arrogantly dismissed it as being. It is financial incompetence of the first order to be running an illegal overdraft at a daily rate of $250 million. The Labor opposition wants some answers. This is part of wide-ranging, serious and scathing criticism by the Auditor-General of the incompetent financial management by the Department of Finance and Administration of devolved financial arrangements for government departments. (Time expired)