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Wednesday, 1 December 2004
Page: 75

Senator FERGUSON (3:11 PM) —I am sure the comedians around Australia are not shaking in their shoes because there is no danger that Senator Evans is going to steal their jobs as one of Australia's great comedians. He is no stand-up comic. Senator Evans started off by saying that this was a very unusual question time. I have to tell you, Mr Deputy President, there was nothing unusual about this question time. We had exactly the same sorts of questions and comments coming from the opposition that we hear every day. This is a soundly defeated opposition that has found itself in the same spot asking very tired old questions. The people of Australia made the decision on who runs the defence forces in this country. They passed their judgment on this defence minister. He was returned with a resounding majority, along with many of his colleagues.

As Senator Minchin said in his answers during question time, the defence minister over the past three years has done an outstanding job in what has been a very busy and hectic time for the defence forces of Australia. Outside the first and second world wars, there probably has not been a busier time for our defence forces, who have found themselves involved in operations all around the world. I think they are currently involved in some 10 or 11 operations with varying numbers of personnel. But when you consider the effort that has been put in by our defence forces over that period of time, you see that they have done an outstanding job. The minister himself, for those three years that he has been in charge of our defence forces, has done an outstanding job, which has enabled our defence forces to maintain the efforts they are putting in, in the interests of our neighbours and countries around the world.

This government has a proud record in improving the quality of financial management and reporting across the public sector through a range of reforms, which have included, of course, the introduction of accrual accounting. It is accrual accounting that has highlighted the issues that have been raised by the Auditor-General because it imposes rigorous requirements on agencies—far more rigorous requirements than were ever placed on agencies by previous governments—to ensure that their assets and their liabilities are adequately valued. That is where the difficulty has come in over the past three years because far more rigorous requirements have been placed on agencies than have ever been placed on agencies before. We should never forget that.

We take the issues that have been raised by the Australian National Audit Office, ANAO, in relation to the Department of Defence very seriously because they prove that, in relation to accrual accounting, there are still many things that have to be put in place and got right. Accrual accounting was a bold move by this government. It is something that had been asked for for a long time. It is only understandable that, in a very complex department like the Department of Defence, with so many different arms and with such large numbers of people, once these rigorous requirements were placed on those agencies, the ANAO has had to make sure that everything is up to the very high standard that we expect.

The problems that exist within the defence department go primarily to the adequacy of record keeping, which was not as rigorous in previous days as it is required to be today. The defence forces themselves over a period of time will be working very hard to make sure that that record keeping is kept up to date. One of the things that accrual accounting and rigorous record keeping have highlighted is that it has created some uncertainties, particularly in relation to leave entitlements and inventories. So if we have this rigorous requirement which ensures that agencies have their assets and liabilities adequately valued, it is understandable that it takes some time before they get it exactly right. In the initial stages of accrual accounting and as we have gone through the auditing process some years after accrual accounting was set up initially—which has taken some time—it is understandable that it should take some time to get it exactly right. It needs to be emphasised that the problems raised by the Audit Office do not impact at all on the integrity of the government's key budget aggregates. It has no impact on that whatsoever, like the underlying cash surplus, the revenue and the cash outlays or the net debt. (Time expired)