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Thursday, 1 December 1960


Mr WHITLAM (Werriwa) .- This bill is very trivial. It is not the bill which the Auditor-General foresaw would be presented to the Parliament promptly after the presentation of his last report in August. There can be no objection to the bill itself. It merely carries out the recommendations contained in the report of the Public Accounts Committee completed last January and presented to the Parliament last March. The bill seeks to repeal subsection (2.) of section 36, and paragraph (f) of section 51 of the principal act. Section 36 (2.) is in these terms - (2.) The Minister of each Department shall within thirty days after the close of the financial year prepare and transmit to the Treasurer a statement of all claims in respect of the services of hit

Department outstanding at the close of such year which might by law have been paid out of the Consolidated Revenue Fund during such year.

Section 51 states -

54.   The Auditor-General shall forthwith examine such statement and prepare and sign a report explaining such statement in full and showing -

(f)   all claims in respect of any department outstanding at the close of the financial year, which might by law have been paid out of the Consolidated Revenue Fund during such vear.

As I have said, this minute bill seeks to repeal those two provisions.


Mr Harold Holt - We were urged to do it.


Mr WHITLAM - The Government was urged to do it by the Public Accounts Committee in its 46th report which it signed on 21st January last and submitted to this House on 10th March.

In his annual report for last year, which was tabled on 17th August last, the Auditor-General stated -

Pending formal repeal by the Parliament, Treasury obtained Cabinet approval that the statements required under section 36 (2) be dispensed with for the financial year 1959-60.

You will note, Mr. Deputy Speaker, the obnoxious terms of the Auditor-General's report. Cabinet authorized Treasury to break the law " pending formal repeal " of the sub-section by the Parliament. It is something new, even for this Government, when the repeal of acts of Parliament becomes a formality. The Government cannot always assume that the other place will acquiesce in things that this House wants to do. If in fact Cabinet told Treasury that it could break the law pending formal repeal of the sub-section by the Parliament, Cabinet was acting with a good deal of presumption, even for a Cabinet such as we have now. If the AuditorGeneral volunteered the term " pending formal repeal by the Parliament", it was sheer impertinence on his part. Nevertheless, there can be no objection to the repeal of these sections even if there is objection to the assumption that the law would be repealed, and therefore that it would be safe for the Treasury to disregard the law this year.

The more important thing about this bill is that it is so trivial in the light of the job that has to be done in amending the Audit Act. Substantial and numerous amendments of the act have been sought by the present Auditor-General and by his predecessor since 1952, and the Government has promised to make those amendments. The seven amendments of the act since 1952 have all been as trivial as this one.

In his report for the year ended 30th June, 1952, the then Auditor-General, Mr. Brophy, stated -

The Audit Act originally received Royal Assent on 7th August, 1901. In the intervening 51 years it has been amended on many occasions, but it has not received the comprehensive examination which the passage of time has indicated to be necessary.

This general question has been taken up with the Treasury and the Attorney-General's Department. The Parliamentary Draftsman has indicated that he is in entire agreement with the suggestion that a complete review of the Audit Act should now be undertaken.

An extensive list of suggested amendments involving more than two-thirds of the 91 sections of the Act has been submitted by me to the Treasury for consideration.

In the 1957 report the Auditor-General said -

Recently, the Treasury advised it is anticipated that amendments to the Act will be ready for consideration of the Parliament in the autumn session, 1958.

In September, 1958, I asked the Prime Minister why he had not persevered with those amendments which the AuditorGeneral had advocated in their reports every year since 1952 and which he himself promised, in November, 1952. He promised to give me a reply. Later, in answer to a question which I put on notice the Treasurer agreed, on 7th April, 1959, that successive Auditors-General had advocated a review of the Audit Act in every annual report since 1952 and that the Prime Minister himself had promised to amend the act in 1952. He told me how much work had to be done.

He told me how many things, apart from the act, had been done - such things as Treasury regulations, Treasury instructions, overseas account arrangements and so on. Then he came to the point and said -

A major section of the Audit Act, namely, that relating to the Trust Fund, has been the subject of intensive inquiry by the Joint Committee of Public Accounts which completed its Report in November, 1957.

Nothing, Sir, has yet been done about amending the act in accordance with that three years old report of the Public Accounts Committee. This present bill flows from the Public Accounts Committee's next report, and it follows with comparatively commendable promptness.

Not only did the Prime Minister himself in 1952 promise a review of the Audit Act, but in September, 1954, one of the seven amendments which- have been made to the act since 1952 extended the term of office of the Auditor-General for a year after his reaching the retiring age of 65, and the reason given was that the AuditorGeneral's continued services were necessary to prepare the legislation and pilot it through. Sir Eric Harrison said -

The present Auditor-General has had a life-long association with the accounting work of the Commonwealth, and during his period as AuditorGeneral has completed a comprehensive review of the Audit Act. His suggestions for alterations in, Treasury according procedures are now under examination, and during next year it is hoped to bring down legislation embodying substantial amendments to the Audit Act. It will be of considerable help to the Government during the consideration- and- drafting- of this, legislation- to have available the continuing services of the. Auditor-General to advise on the alterations which it proposes to make>

Mi: Brophy completed his additional year and the Government still had not brought in the amendments which he had advocated and which the Government had approved and promised.

Then, in the report which we received from the Auditor-General on 17th August last in respect of the financial year which ended on 30th June last, the Auditor General reported as follows: -

Reference has been made in annual Reports over the past seven years to the need for a comprehensive review of the Audit Act.

The Treasury recently conferred with my office on certain of the suggestions which have been made over the years by Audit and by the Public Accounts Committee.

Conclusions having been reached on a number of items, the Treasurer recommended to the Government the early introduction of a bill to amend the Audit Act 1901-1960. Approval was given and action is proceeding accordingly.

The proposed amendment of the Act will effect considerable progress towards remedying unsatisfactory features reported over several years.

It is quite clear that this bill with which we are dealing is not the bill which the Treasury and Audit conferred on, which the Public Accounts Committee recommended, which the Treasurer himself in turn recommended, which the Government approved, and about which the Auditor-General said, " Action is proceeding accordingly ". When are we to receive the bill which has been in hand for over eight years?

I said earlier that there have already been seven bills to amend the Audit Act since this review was completed eight years ago, and the amending bills have been as trivial as this bill. They have reflected two things - the Government's banking policy and the Government's policy of inflation. I shall take them in sequence.

The sole provision of the Audit Act 1952 was to increase the salary of the AuditorGeneral from £3,250 to £3,350. In 1953 the act was amended consequent on the banking legislation of that year, so as to refer to the Commonwealth Trading Bank of Australia in addition to the Commonwealth Bank- of Australia. In 1954 the act was amended to increase the. salary of the Auditor-General from £3,350 to £3,500, and to extend his term, of office so that he could complete his review of the act. In 1955 the act was amended to increase the salary of the Auditor-General from £3,500 to £4,500. In 1957 the act- was amended to increase the salary of the AuditorGeneral from £4,500 to £5,000. In 1959 the act was amended again, this time to delete the reference to the Commonwealth Bank of Australia and to insert references to the Reserve Bank of Australia, the Commonwealth Trading Bank of Australia and the Commonwealth' Development Bank of Australia.

Earlier this year the act was amended for the seventh time and this time, Sir, you will be interested to learn, it was amended to increase the salary of the AuditorGeneral from £5,000 to £5,900. In all this-, time - eight years- there were constant consultations between Audit and Treasury, promises by the Prime Minister, promises, by the Deputy Leader of the Liberal Party and Vice-President of the Executive Council, who is at present the High Commissioner for Australia in the United Kingdom, to amend the act, and references in every annual report by the Auditor-General to the imminence of those necessary reforms. And now, the Treasury agreeing to them finally, the Treasurer recommending them finally, Cabinet approving them finally, and the Auditor-General reporting that they are promptly coming down, what do we have? We have the repeal of two sub-sections retrospectively permitting the Treasury to disobey the law, and for the future changing the law, as recommended and agreed to by all of us.

When are we going to get the amendments of the Audit Act which everybody agrees are necessary, which all the officials have been urging and have been agreed upon for years past, which the Government has promised for so long? I do not know a clearer example of the Government's dilatoriness and futility and its failure to carry out its promises or provide efficient administration.







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