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Thursday, 24 November 2011
Page: 13772


Mr OAKESHOTT (Lyne) (11:10): On behalf of the Joint Committee of Public Accounts and Audit I present the following documents: Report 427: Inquiry into national funding agreements; Report 428: Review of Auditor-General's reports Nos 16 to 46; and the government response to the Joint Committee of Public Accounts and Audit Report 422: Review of the 2009-10 Defence Material Organisation Major Projects Report.

I ask leave of the House to make a short statement in connection with the reports.

Leave granted.

Mr OAKESHOTT: On 9 February 2011 the committee agreed to conduct an inquiry into the national funding agreements between the Commonwealth and the states and territories. The inquiry focused on the implementation of the Intergovernmental Agreement on Federal Financial Relations. This agreement came into effect on 1 January 2009 with its key features including: rationalisation of the number of agreements, a shift from an inputs focus to an outcomes focus, and increased flexibility for the states and territories. The committee has an ongoing interest in achieving value for money for the Australian taxpayer and felt that the distribution of the $45.5 billion in payments for specific purposes under the intergovernmental agreement deserved some parliamentary scrutiny.

We found that there was overall support for the new framework and its underlying principles and intent. The committee believes that the new agreement is a significant milestone in federal financial relations and that it has the potential to alleviate some of the historic confusion and discontent within Commonwealth-state relations.

However we also found that the implementation of the agreement leaves much to be desired. In particular there were shortcomings with the performance reporting framework, the establishment of key performance indicators and the collection and quality of data. The committee's inquiry also found that the cultural change needed across the Public Service has been slow and that inadequate parliamentary oversight also needs attention.

Performance reporting is critical to measuring success, and the committee believes that more work needs to be done. To start with, valid key performance indicators must be developed, followed by the timely collection of better quality data and, finally, this data must be interpreted in a meaningful way. It is essential that KPIs are measurable, relevant and directly related to outcomes. While initiatives are underway to improve performance reporting, more needs to be done. The committee has recommended that efforts are made to streamline reporting by developing a single report for use by multiple agencies and establishing a core set of standard data requirements across key areas.

The need for cultural change is another crucial element to ensure the full implementation of the framework's principles. We are aware that cultural change across the Public Service will take time, but it is urgent that the change is actively promoted and encouraged. We have made recommendations to encourage and enforce the application of the underlying principles of the new framework including using staff training to foster cultural change.

Parliamentary scrutiny plays an important role in ensuring value for money for the Australian taxpayer. National funding agreements are typically negotiated at an executive-to-executive level, only sometimes receiving parliamentary oversight after signing. As the committee, we found that despite high-level mechanisms for parliament and the public to scrutinise this funding, these mechanisms do not provide an adequate picture of national funding agreements. The committee has therefore made a range of recommendations to enhance scrutiny of the overall process. This includes the tabling of key reviews and reports such as those by the COAG Reform Council and the Productivity Commission. Government statements in reply should also be tabled and the committee has asked for an annual statement by the Prime Minister outlining the contribution of national funding agreements to the wellbeing of all Australians.

The Commonwealth and the states and territories are always going to hold differing perspectives on the best way for funds to be transferred and the balance of roles and responsibilities across jurisdictions. We have even seen some of that played out publicly over the last week. We believe, though, that if implemented effectively the federal financial relations agreement will provide a means to reconcile these differences. It is therefore important to acknowledge the problems identified with the implementation of the framework during this inquiry and also a number of related external reports with similar findings. With this in mind, the committee urges the Commonwealth government to seize the opportunity to take consolidated action to address the issues raised within the framework. With these changes, Australia will be well positioned to continue on the reform pathway in the coming decade.

On Auditor-General's reports Nos 16 to 46, the Joint Committee of Public Accounts and Audit, as prescribed by its act, examines all reports of the Auditor-General and reports the results of the committee's deliberations to the parliament. This report details the findings of the committee's examination of the 2009-10 financial statements of the Australian government entities plus three performance audits selected for further scrutiny from the 31 audit reports presented to the parliament between November 2010 and May 2011.

The Public Accounts and Audit committee reviewed several audits by the Auditor-General to gain a broad perspective on the operational effectiveness of Australian government departments and agencies, including audits of the financial statements of Australian government entities: the Digital Education Revolution program, the National Secondary Schools Computer Fund, maintenance of the Defence estate and management of student visas.

We were pleased to see another year of positive results for the financial statement audits of Australian government entities. However, to further improve transparency, the committee has asked the Department of Finance and Deregulation to look into improved cross-agency and cross-jurisdictional financial reporting as part of the Commonwealth financial accountability review.

The National Secondary School Computer Fund looks set to meet its target of providing all students in years 9 to 12 with a computer by the start of the 2012 academic year, but evaluation mechanisms are still unclear. The committee has recommended the Department of Education, Employment and Workplace Relations publicly release the 2012 mid-program review findings within three months of completion. With $20 billion at stake and reports of deteriorating assets due to management issues and a lack of funding, the committee also heard that the management and maintenance of the Defence estate was improving. To ensure progress continues, we have recommended Defence provide a status report to the committee within six months. We have also asked for a progress report on the student visa program from the Department of Immigration and Citizenship and the Department of Education, Employment and Workplace Relations within six months in light of the recent release of the government's response to two major reviews impacting the program and a history of incomplete or unimplemented reviews and evaluations.

Overall, this inquiry has demonstrated that Australian government departments and agencies are well positioned to continue meeting their financial management obligations. It is also clear that the departments reviewed are making progress in addressing outstanding issues highlighted in the ANAO reports. However, there are still areas of concern. We have seen examples of rushed implementation of programs at the expense of whole-of-project planning and reviews undertaken at significant cost to the taxpayer that remain either incomplete or only partially implemented. I encourage other departments and agencies across the Australian Public Service to learn from the findings of these inquiries. In doing so, I stress to all agencies the importance of reflecting not only on their own performance but also on the challenges, achievements and creativity of others so as collectively find new and better ways to deliver services to Australians.

Finally, on the review of the 2009-10 Defence Materiel Organisation major projects report, by convention the Public Accounts and Audit Committee regularly tables government responses to its reports in the form of executive minutes. In tabling the government response to the committee's report No. 422, I wish to note the committee's initial concerns with the content of the response. In particular, I note the response to the key recommendation of the report is not to be delivered until March 2012 when the committee requested it by 31 August 2011—a delay of around six months. The committee will be taking up these issues with the minister.

In closing, I sincerely thank each committee member for the bipartisan spirit in which work continues to be done on these inquiries and the ongoing focus on better public administration for Australians. As well, as it is Christmastime and because a lot of work has been done, I also thank the secretariat of the JCPAA for their good work and welcome the impending birth of the first baby of the committee secretary Mr David Brunoro. I commend the reports and the government response to the House.

The ACTING SPEAKER: Does the member for Lyne wish to move a motion in connection with the report to enable it to be debated on a future occasion?

Mr OAKESHOTT: I move:

That the House take note of the reports.

The ACTING SPEAKER: In accordance with standing order 39, the debate is adjourned. The resumption of the debate will be made an order of the day for the next sitting.