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Monday, 11 November 1991
Page: 2835

Senator NEWMAN (5.08 p.m.) —I also rise to speak to the Advance to the Minister for Finance. I draw the Committee's attention to the fact that these advances are supposed to be from a contingency fund for matters which could not have been foreseen and which, therefore, are not subject to normal parliamentary scrutiny. I am concerned about this failure because it is a very convenient way for governments or bureaucrats to dispose of embarrassing payments.

  Some of the payments, clearly, should have been expected. I note, for example, that last year there was an advance of $47,000 to the Office of Australian War Graves—not a very large sum, we would agree. I would have thought that War Graves, of all people, should have very little difficulty in assessing its expenditure ahead of time. This year, once again, we find that War Graves wants to spend more than a quarter of a million dollars over and above what it presented to the Parliament in the Appropriations Bills.

  War Graves, of course, has had a continuing embarrassment over some Australian Construction Service projects in South Australia and New South Wales. I think these War Graves projects are a classic example of why the Opposition is so concerned—and Senator Short pointed this out—about the whole use to which the Advance to the Minister for Finance is being put.

  I wish to make it clear how the War Graves advance is currently being abused. We have had a whole saga in the Senate about the Rookwood garden of remembrance. You will recall, Madam Temporary Chairman, that I have been asking questions about this issue for just over a year. It has become known as the saga of the gold plated bricks at the Rookwood garden of remembrance.

  Once again, that is coming back to the Parliament by way of the Advance to the Minister for Finance. It is asking for $73,000 balance on the final contract and a further $190,000 for delays due to industrial action and wet weather. But the answer which the Minister, Senator Bolkus, gave me some months ago was that the second contractor, who came in after Girvan Constructions went into liquidation, was being introduced so as to avoid industrial action. We have just gone through the appropriations process. The opportunity was there for senators to scrutinise the expenditure of the Office of Australian War Graves. It must have been well known then that there would be additional expenditure in relation to the Rookwood garden of remembrance. Was that made known and obvious to members of the Senate? No, it was not. Yet, only a few weeks later, we come back here and find that War Graves is looking for a further $263,000, which it must have known would be needed—or something in that vicinity.

  The information that we have from the Government is that R. N. Cooper, who was the second contractor, originally submitted a final claim far in excess of the $263,000. The Government has not seen fit to advise the Senate how much it was in excess—we are just told it was `far in excess'. That amount was disputed by Australian Construction Services. The Government sought legal advice from the Australian Government Solicitor and the Government Solicitor recommended that the Government should settle as soon as possible.

  This project has not long been opened. It was due for completion back in 1989. In March, I referred the project to the Royal Commission into Productivity in the Building Industry in New South Wales, so dissatisfied was I with the blow-out in expenditure which had gone from $3.8m to $6m, by the Minister's own admission in the Senate. The Royal Commission in New South Wales has found that on a good day a brickie might be laying about 50 bricks—

Senator Cook —It has not found anything. The Royal Commission has not reported.

Senator NEWMAN —I take the Minister's contradiction. The counsel assisting the Royal Commission advised the Commission that the output per brickie at times was as low as 50 per day, or lower. That tends to justify the concerns which were expressed previously in the Senate about this issue and which were pooh-poohed by Minister Bolkus, whose Department was responsible for the project. I draw attention to the annual report of the Australian War Graves for 1989-90. We are waiting eagerly to see what it will say this time, but at that time the report criticised the role of Australian Construction Services in the building of the two new gardens of remembrance, one of which was in Rookwood. The report said:

The erection of the new gardens in South Australia and New South Wales could only be described as disastrous from the aspect of time, cost and quality . . . The employment of Australian Construction Services as the construction authority on any future major war graves projects must be carefully considered.

Here it is back asking for more money, but is it doing it up front and honourably? No, it is doing it by way of the Advance to the Minister for Finance to try to avoid any more embarrassment. In March the Minister, Senator Bolkus, in answering my question said that there had been overruns since R. N. Cooper had taken on the contract on 16 February 1990, although there had been overruns before that with Girvan Constructions. He said that the project had subsequently experienced delays resulting from wet weather combined with safety, industrial and some contractors' problems, although he did not spell out what those were. Of course, that had delayed it even further. The Minister went on to tell the Senate:

. . . what we have is a contracting out arrangement which is subject to the vicissitudes of weather and the economy; one that has been entered into in accordance with normal and acceptable contracting practices; and one that is proceeding despite difficulties.

This was all trying to give the Senate the impression that everything is fine and going along as normal, but the reality is quite different. Now we are being asked to look at the way the Advance to the Minister for Finance is being used. As Senator Short has already made clear, there are very fair and reasonable concerns on the part of the Opposition that embarrassments such as this are being quietly moved through the Parliament so that there will not be proper scrutiny. The Royal Commission in New South Wales is concerned about the issue, and I am very glad to see that at last the Government is starting to be concerned.

  I refer now to an article in the Sydney Morning Herald by Peter Hartcher on 15 October, in which he reports:

  The Federal Government has estimated that contractors working on Federal building projects defrauded the Commonwealth of more that $10 million and it is investigating a wide range of cases.

He also reported:

. . . Senator Bolkus, has referred a number of cases to the Federal Police, the Federal Director of Public Prosecutions and the Trade Practices Commission.

. . . . . . . . .

  The Federal Government is preparing to take three classes of action.

  First, it hopes to mount civil cases against contractors to recover money of which it has been defrauded.

  Second, it hopes to bring criminal actions against people who were knowingly involved in defrauding the Commonwealth.

  Third, it hopes to levy fines on companies for breaches of trade practices law.

. . . . . . . . .

  . . . it is likely that investigations will continue for many months.

. . . . . . . . .

  The Federal Government considered setting up its own inquiry into fraud on Commonwealth contracts, but decided that the New South Wales Commission was producing enough specific material to form the basis for its own investigations.

By way of reminder, I have asked questions in this Parliament over 12 months, I have tried to get answers from Senator Bolkus about this project since November last year, and he has not until now taken the matter seriously. He told me that the arrangement was in accordance with normal and acceptable contracting practices. When I asked him about the role of the BWIU, he claimed that it was gratuitous point-scoring on my behalf and refused to answer me on that issue. As I say, I am glad that his Government now recognises there are serious questions which need addressing by the Government, including dealing in a substantial way with fraud and collusion. But, by turning its eyes away from the reality of what was before it, the Government has cost Australian taxpayers dearly, and now it needs to pay urgent attention to the matter. Prevention would have been the most valuable way of dealing with an issue as important as this. However, having failed to prevent the expenditure, at the very least the Government should have insisted that this matter be spelt out in the Appropriation Bills for the Department of Veterans' Affairs. We in the Opposition simply cannot tolerate this way of sneaking embarrassing payments through the Parliament by using the mechanism of the Advance to the Minister for Finance without allowing—indeed, encouraging, in cases like this—proper scrutiny by this Parliament.

  Question resolved in the affirmative.

  Resolution reported; report adopted.