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Expenditure committee

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P R I M E mihllSTER



The establishment of an expenditure, committee marks an important step, in the Government' s policy of strengthening the parliamentary system.

It is fundamental to an effective system of representative Government that the peoples representatives should be able to adequately supervise and review the activities of Government ' administration. . · ,

The Parliament should be able to subject policy, legislation and administration to close and effective scrutiny. .

During the last election campaign the Government stated its view that the capacity of parliament, and particularly this House, to scrutinise the estimates of expenditure should be improved. ·

The absence of an effective mechanism for examining proposals may well have contributed to the enormous inefficiency in expenditure in the last three years. . . '

The ultimate control of Parliament over the Executive and its .

control over, and scrutiny of, the expenditure of m o n e y .

This, is a fundamental principle o f .democracy which this Government recognises. '

It is a principle whose expression will be strengthened by the proposal for an expenditure committee.

The proposal for an Expenditure Committee arises from a broader concern of the Government to improve the functioning of our political institutions. .

Our historic plan to reform the Federal system by increasing the financial independence of State and Local Government arises out of our deep concern at the growing centralisation of power in the Federal Government.

Our reforms will make participation in Government at State and Federal levels more effective.

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Our policy of tax indexation will once more mean that tax increases will have to be justified to the p ublic, instead of simply taking place without debate as a result of inflation. '

The Expenditure Committee will greatly improve the capacity of this House to scrutinize public expenditure and improve P a r l i a m e n t ’s capacity to act as an able and effective watchdog over the affairs of the Government. . .

The work of such a Committee will have an obvious value during a

period when the Government is especially concerned to minimise waste and maximise efficiency in Government expenditure.

At the present time this House does not have adequate machinery to examine the crucial process of formation of the estimates.

It is not appropriate that existing detailed Parliamentary scrutiny should be confined to the Senate Estimates Committee and to a Joint Committee - the Public Accounts Committee.

The Senate Estimates Committee examines the Appropriation Bills but in a short time frame.

The Public Accounts Committee operates within rather broadly defined terms of reference, but h a s ■a focus mainly on accounts or past, expenditure. . .

There is a need for greater in-depth examination of public expenditure in relation to effectiveness and economy in the delivery of .given Government policy. .

An Expenditure Committee of the House of Representatives would conduct its investigations throughout the year.

It would therefore have an opportunity to explore more deeply selected areas of Government activity - particularly in relation to efficiency in the implementation or delivery of policy.

Over a number of years an Expenditure Committee would add to knowledge and understanding within the Parliament in .a way that has not been achieved by existing committees.

The Committee would not examine the Government's policies. It would rather be concerned to investigate economy and effectiveness in the implementation of such policies and matters related to the formation of estimates of expenditure.

It is not proposed at this stage to make any change in the charter

of the Public Accounts Committee, though this would be kept under review as the Expenditure Committee develops - recognising that there is potential for overlap. The initial work of the Expenditure Committee will necessarily be on an exploratory n a t u r e .

The Committee might conduct its first examination in an area where greater support could be given in terms of data availability.

The Terms of Reference for the Committee are almost identical to those of the House of Commons Expenditure Committee.

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Close examination of the Terms of Reference of the Commons Committee led us to the view that those terms, based on the

extensive experience of that Chamber, well expressed the scope of matters the Expenditure Committee here might consider. . ·

It seemed to us desirable to take advantage of this experience.

The Committee's Terms of Reference require it to:

Coinsider any papers on public expenditure presented to. this House.- and such of the estimates as it sees fit to examine

Consider how, if at all, policies implied in the figures . . of expenditure and in the estimates may be carried o u t .

more economically. ■ .

Examine the relationship between the costs and benefits of implementing Government programmes

^Inquire into and report on any question in connection = with public expenditure which is referred to it by this . .

Hou s e . ' .

It is for the Committee itself to decide the papers or aspects of papers which it will examine in depth and the nature of its .

reports to the House, subject to the power of the House to direct its attention to particular matt e r s . ' .

In order to carry out detailed examination, it would probably seek · · to cover only a limited number of major areas of Government activities each y e a r . "

It might take several years for the -Committee to be able to cover in its reports all areas of Government activity. ■

But the very fact of the existence of the Committee and lack of

knowledge of the area which the Committee will investigate next will have its own salutary effect. '

The Committee w o u l d .be expected to .give due regard to the restraints on expenditure faced by Parliamentary Departments, particularly in relation to specialist staff. .

The resolution (Clause 2) includes the Chairman of the Joint .

Parliamentary Committee of Public Accounts as a member ex-officio of the Expenditure Committee. .The Charman of the Expenditure Committee will be a member ex-officio of the Parliamentary Committee of Public Accounts. . .

The Committee having resolved that it will inquire into a particular aspect, the Committee or a Sub-Committee could request the Department(s) and/or other Commonwealth bodies responsible “ to prepare for it a written submission in a form which it specifies.

Where appropriate other bodies such as the Treasury and the Public Service Board might be asked to contribute written submissions also the Committee would of course be free to accept submissions from any source.

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Under the Terms of Reference the Committee can examine expenditure of all Commonwealth bodies including business undertakings.

If circumstances arose it would be possible to exempt by resolution particular business or other bodies from examination.

There will be occasions where programmes being examined by the Committee are delivered through State and/or Local Government or where the Committee sees a need to consider the relationship '

between delivery of Commonwealth programmes and of related State or Local Government programmes. '

O t h e r .than in exceptional circumstances the Committee s h o u l d " operate within the framework of data and evidence drawn from the Commonwealth's own administration.

I propose to d r a w · the attention of State Premiers to the establishment of the C o m m i t t e e . .

If ac c e p t e d , this resolution will establish the Committee. ~I would hope that within the term of this Parliament its continuing existence will be assured by appropriate amendment to the standing o r d e r s . ' .

The Committee will of course control its own operations.

I have during the course of my speech made a number of suggestions

as to how the Committee might operate. . · .

Again not wishing to constrict .-/the Committee I seek leave to include in Hansard operational guidelines amplifying the Government's views as to how it might seek to perform its important task.

I have no doubt that this reform in the procedures of the House will come to be seen as an important step in the historic ·

reas sertion by the Parliament of its right to control the Government's expenditure. .

In recent times Parliament's role has-been challenged by attempts of the Executive to minimize Parliamentary scrutiny of key expenditure p r o p osals.

There should now fortunately be no doubt that the control of expenditure lies with the Parliament - that is the ultimate protection of our democratic system.

In this context the proposal to establish an Expenditure Committee is a significant reflection of current concerns.

It marks the Government's desire to undertake a programme of constructive reform which will strengthen our democratic institutions and control by the people over the activities of Government.




Section 1.Successful operation of our system of federal government demands the fullest co-operation and co-ordination of activities between all spheres of government. '.n increasingly complex society in future years suggests that an Advisory Council for Inter-government Relations be established to give continuing attention to inter-governmental problems. ' ■

' · It is intended that the Advisory C o u n c i l , in -the .

p refor ma nc e of its d u t i e s , w i l l b r i n g together representa ti ve s of the F e d e r a l , State and local g ov er nments '.nd private citizens for the c on s i d e r a t i o n of common p r o b l e m s . . ·

. Premiers' C onference w ill r efer to the Council subjects for a d v i c e . Local g overnment a u t h o r i t i e s , through their State o r g a n i s a t i o n s , will be able to s u b m i t 'matt er s to their respective P r e m i e r s , for c on s i d e r a t i o n b y the Premiers' ■

C onfe re nc e for r ef e r e n c e to the Council. It w o u l d also be · open to the Council i ts e l f to request that matt er s be referred to it for a d v i c e . . .

D U TI E S OF T H E C O U N C I L . ' ■ ■ ‘

S e c t i o n 2„It shall be the d ut y of the A d v i s o r y Coun ci l -

(1) to engage in suc h activities and to make such studies and in ve st ig at io ns as are, n e c e s s a r y or • des ir ab le in the ac co mp li sh me nt of the purposes .

set f or th in s e c ti on 1 of this charter;

(2) to c on si de r ways and means of f os t e r i n g be tt er relations b e t w e e n the spheres of g o v e r n m e n t ;

( 3 ) To submit reports on matters referred to the .Council to the Prime Minister and the Premiers for tabling in Parliament; and to submit an annual report on or before 31 August .each year to the

Prime Minister and the Premiers for tabling, in Parliament. ■


The Council is to be established by a memorandum ' of agreement between the Prime Minister and the Premiers at the Premiers' Conference. The Commonwealth alone will . introiuce any necessary legislation.

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. The Council is to comprise three Government and two Opposition members of the Commonwealth Parliament; one / representative from each State; three representatives from J . local g o v e r n m e n t to be ele ct ed b y the Local G ov er n m e n t A s s o c i at i on of A u s t r a l i a and p r e f e r a b l y to be selected fro m separate S t a t e s ; a n d five citizens to be s el ected b y the C o m m o n w e a l t h

in c o n s u l t a t i o n w i t h the States ha vi ng re ga rd to the vari ou s areas and sections of the c o m m u n i t y and w it h a v i e w to e ns urin g , that S ta tes w i t h o u t local g o v e r n m e n t r e p r e s e n t a t i o n h av i n g c i t i z e n s selected.

R O T A T I O N OF M E M B E R S . ;

■ N o m i n a t i o n of C o m m o n w e a l t h and State r ep r e s e n t a t i v e s

b y the G o v e r n m e n t of the time will ensure r o t a t i o n of those m e m b e r s in the n or m a l course of electoral c h a n g e . The local g o v e r n m e n t r e p r e s e n t a t i v e s and the citizens to be a p p o i n t e d for a t h r e e - y e a r ter m w i t h a limit of two c o n s e cu ti ve terms. . R e - e l e c t i o n a fter a b r ea k in office w o u l d be p e r m i s s a b l e .


It w o u l d be o pen to G ov er nments to de ci de w h e t h e r to a p p o i n t M i n i s t e r s or b a c k b e n c h e r s to the C o u n c i l .

C H A I R M A N . .

The C ha ir ma n is to be a citi ze n n o m i n a t e d b y the C o m m o n w e a l t h in c o n s u l t a t i o n w i t h the States.


Funds for the Council to be limited to $ 3 0 0 , 0 0 0 in the firsx ye ar . w i t h the proviso that the C om mo n w e a l t h and the States w o u l d m e et the cost of fares and a cc o m m o d a t i o n for their r e p i e s e n t a t i v e s . '

COS'. S H A R I N G '

Costs w i l l be shared:

C o m m o n w e a l t h 4 5 $ or $ 13 5, 00 0 .

L oc al G o v e r n m e n t 10$ or $30,000 St at es 4 5 $ or $135,0 00

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The Local Government Association of Australia will be asked to assess the method of alloca+ing the local government share. .

The State share will be. allocated as fo1lows:

N.S.W.■ $35,500 Vic $30,000

Old $21,500

S.A. $17,500

V.A. $17,000

Tas $13,500


9 April 1976