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Thursday, 24 June 2010
Page: 4345


Senator BARNETT (1:57 PM) —I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

I rise today to introduce into the parliament a Bill for an Act to amend the Financial Management and Accountability Act (1997) to ensure value for money in the use of Commonwealth resources, and for related purposes.

Australians have had enough of the Labor Government’s wasteful and reckless spending. Labor’s pink batts insulation fiasco and Building the Education Revolution (BER) programmes alone have already wasted billions of taxpayers’ dollars, to the shock and dismay of many hard working Australians.  This Government has consistently failed to deliver on its promises, has consistently failed on program delivery, and has consistently failed to deliver value for money in the spending of taxpayers’ funds.

Value for money is a highly subjective term which is useful to bring flexibility in normal circumstances.  However, this flexibility as administered by Labor is leading to waste, debt and higher taxes, upward pressure on interest rates and increased cost of living for all Australians.  Under Labor, the current procurement regime does not offer sufficient protection for taxpayers money, though I note it worked well under the previous Coalition Government.

The responsible stewardship of public money is a duty central to good government and is at the heart of Liberal philosophy. Inherent to this principle is a parallel commitment to avoid the waste of public money.

When last in office, the Coalition implemented far reaching reforms to public spending and procurement, notably introducing the Financial Management and Accountability Act and the Commonwealth Procurement Guidelines.  The rigor these changes brought and the principle of ‘value for money’ allowed wasteful spending to be contained, and was a key to the Coalition paying back Labor’s $96 billion debt.

The current Labor Government would also claim to be committed to the principles of sound economic management.  ‘Kevin 07’ claimed to be an ‘economic conservative’ and kept saying ‘me too’.  There was also the posturing and bravado of Lindsay Tanner’s ‘Razor Gangs’ - all trying to create a contrast with the Howard government which they attempted to label as reckless and wasteful.

However, the Rudd Labor Government has already racked up a record of wasteful spending in the order of $4 billion.  Examples such as GROCERYchoice, laptops in schools, record spending on consultants and legal fees and wasted tax bonus payments have all contributed.  Labor’s waste and mismanagement has seen public money thrown completely to the wind or programs costing far more than they should have. 

In response to this the Coalition is introducing a package of two initiatives, including this Bill to strengthen the requirement that value for money be considered in the spending of Commonwealth resources and a Bill to establish a Parliamentary Budget Office similar to the Congressional Budget Office in the United States, but on a smaller scale, to provide better oversight of government spending.  These initiatives were announced by the Leader of the Opposition, The Hon Tony Abbott MP in Canberra on 22 June, 2010.  If elected, the Coalition will also add achieving ‘value for money’ to the criteria against which senior officials’ performance is judged.

The spending of public monies is regulated by the Financial Management and Accountability Act (1997) and its regulations.  Section 44(3) of the act requires Agency Chief Executives to promote ‘proper use’ of Commonwealth resources.  ‘Proper use’ means ‘...efficient, effective and ethical use that is not inconsistent with the policies of the Commonwealth. The principal of value for money is not included directly in the legislation but rather is the core principle of procurement introduced in the Commonwealth Procurement Guidelines which are made under the regulations to the act.  Therefore, achieving value for money is not currently a formally binding legislative obligation. 

This Bill adds value for money to the definition in Section 44(3) of the Act. This addition will strengthen the obligation on governments to seek value for money when spending public funds and places a more explicit obligation on Agency Chief Executives to promote such spending within their Agencies.

It is the Coalition’s belief that this two part package will improve transparency and accountability in government spending and be an impediment to future Labor governments engaging in further reckless spending. This initiative will, over time, improve the quality of Government spending regardless of who holds the reins of power, thus ensuring that all Australians get better value for money and restoring public confidence in Government procurement and spending.

This Bill and the establishment of the Parliamentary Budget Office will ensure that no future government will be able to spend taxpayers’ money without greater fiscal and legal scrutiny.  Governments will not always like additional scrutiny and accountability, but given the reckless, wasteful and irresponsible spending of the current Labor Government over the past two and a half years, the Coalition believes this initiative is timely and urgently needed.

I commend the Bill to the Senate.


Senator BARNETT —I seek leave to continue my remarks later.

Leave granted.