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Wednesday, 1 December 2004
Page: 67

Senator MARK BISHOP (2:37 PM) —My question is to Senator Minchin, the Minister for Finance and Administration. Can the minister explain why the Auditor-General has refused to endorse Defence's financial statements for the third year in a row? Is the minister aware of any other Commonwealth agency in which financial management is in such a mess? Are there any other agencies that are unable to properly account for over $8 billion worth of public assets and $1.2 billion worth of employee leave entitlements? What action has the minister taken to ensure that Defence's financial management improves by the time the Auditor-General next considers Defence's finances? Finally, what advice has the minister given to his colleague the Minister for Defence to ensure that this does indeed occur?

Senator MINCHIN (Minister for Finance and Administration) —I have nothing to add to the very comprehensive answer given by the Minister for Defence to exactly this question. The opposition are wasting the time of the Senate and their own time by asking two questions that are exactly the same. The Minister for Defence has comprehensively responded to the issues raised by the opposition in relation to Defence's accounts. All I want to do is congratulate the Minister for Defence on the actions he is taking in ensuring that the issues identified by the Auditor-General in relation to Defence's accounts are being—

Opposition senators interjecting—


Senator MINCHIN —As I said, I endorse entirely the actions taken by the Minister for Defence in ensuring that the defence department does address properly and comprehensively the issues raised by the Auditor-General. These issues go to the government's far-sighted introduction of accrual accounting for the nation's accounts. The introduction of accrual accounting has been a significant issue for the whole of the Public Service, and the department most significantly affected by that obviously is Defence because of the massive inventory that it—

Opposition senators interjecting—

The PRESIDENT —Order! Senators on my left have been continually noisy and shouting across the chamber during question time. It is disorderly and I would ask them to cease.

Senator MINCHIN —They are trying to distract themselves from their own problems! The defence department have had probably the biggest and most difficult task in adjusting to accrual accounting. From the point of view of the finance department we believe they are doing what is required. We are working with them to ensure that they do put in place the systems and processes required to ensure that they can fully comply with the new regime involved in accrual accounting.

Senator MARK BISHOP —Mr President, I ask a supplementary question. Doesn't the litany of Defence financial management failures in the time that Senator Hill has been the Minister for Defence demonstrate why the minister now shares financial oversight of Defence with Senator Hill? What changes has the minister insisted upon to ensure that the Auditor-General does not have to take the drastic step of refusing to endorse Defence's financial statements again next year? Finally, how much longer will the minister put up with Senator Hill's inability to get financial management in the Department of Defence under control and what will he do about that?

Senator MINCHIN (Minister for Finance and Administration) —This is a joke from the opposition. Senator Hill has been an absolutely outstanding defence minister. The Department of Defence and the military in this country have performed superbly under his ministry. The operations that the defence department and the military have been engaged in have been superb.

Opposition senators interjecting—

The PRESIDENT —Order! Once again, I ask those senators on my left to come to order. There is far too much noise and shouting.

Senator MINCHIN —As I said, the Minister for Defence's record with this department and with the military has been outstanding. The operational performance of Defence as it relates to the accounts and inventories is something that should make everybody in this chamber and indeed the nation proud. The defence department and the finance department are working closely together to ensure that we satisfy the Auditor-General's requirements.