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Thursday, 1 March 2012
Page: 2571

Mr CIOBO (Moncrieff) (10:32): I rise too to speak to the Financial Framework Legislation Amendment Bill (No. 1). It is, as the member for Parramatta remarked, not the most existing piece of legislation that has ever gone through the chambers. Notwithstanding that, it is an important one. Like so many things in life, the important stuff is perhaps not as exciting. That notwithstanding, this bill seeks to amend four acts and repeal two acts across three portfolios. It is part of an ongoing move that is being undertaken by government, as I understand it, with respect to tidying up and updating the Commonwealth's financial framework. This is in fact the ninth financial framework legislation amendment bill since 2004. The bill operates to effectively through the various schedules of the bill clarify a number of matters. I will just walk through them, because there are some aspects that I would like to focus on and others that are purely technical that I would move to quite quickly.

Schedule 1 of the bill seeks to amend the Auditor-General Act of 1977 and effectively operates such that the Auditor-General may accept an appointment under the Corporations Act 2001 as the auditor of any company that the Commonwealth controls. As I understand it, the operation of schedule 1 moves to ensure that the definitions of the act with the definitions of Commonwealth control, which were made in 2008 through the Commonwealth Authorities and Companies Act 2007, will be aligned. I know the shadow minister has taken the view that there is a case for placing stronger obligations on government departments and agencies, indeed including the minister's own department, to more strictly adhere to Commonwealth procurement guidelines. There have been concerns that have been raised by the shadow minister and by others about procurement guidelines not being appropriately followed or not followed as closely as should be when it comes to achieving best value outcomes. This is an important aspect for taxpayers. There should be procurement obligations and concern for value for money when it comes to dealing with the taxpayer dollar.

Schedule 2 amends the CAC Act itself to ensure that directors of Commonwealth authorities and wholly owned government companies and enterprises prepare budget estimates as directed by the finance minister rather than by their responsible portfolio minister. This is effectively just a formalisation of actual longstanding practice. In this respect, it is a tightening or a clarifying measure. The most significant component of schedule 2 is the obligation on directors of Commonwealth authorities and wholly owned companies to notify their responsible minister of decisions about significant events immediately after taking those decisions. Significant events have been defined to include forming a company or participating in the formation of a company, acquiring or disposing of a significant shareholding in a company, acquiring or disposing of a significant business or commencing or ceasing a significant business activity. There are measures that make directors of government linked entities more accountable for their decisions. I think this is perhaps the single most important aspect of this particular piece of legislation.

The reality is that we have seen too many examples of very poor quality spending when it comes to the current government. We have seen, both under Prime Minister Rudd and under Prime Minister Gillard, example after example of very poor quality spending decisions where the government has engaged, through its agencies, in spending that frankly has not delivered value for money for taxpayers. There are many examples I could talk about with respect to the so-called Building the Education Revolution. How many covered outdoor learning areas did we see that were purchased at taxpayer expense for two or three times the estimated cost of acquiring that particular COLA, as they are called.

The reality is that this government has become synonymous with a government that wastes money. This government does in fact waste money. This is a government that has undertaken a number of spending initiatives that have led to very poor outcomes. It is a great shame that we have not seen more emphasis placed on achieving value for money. If this particular piece of legislation can help to reinforce a culture that says there should be value for money then I think it is a good move. It is somewhat meaningless though if the finance minister is powerless to stop poor-quality spending outcomes on what they could in advance suspect are based on bad decisions.

Take, for example, what is Australia's single largest spend with respect to a new government agency—that is, the creation of NBN Co. NBN Co. represents the nationalisation of telecommunications in this country. NBN Co. represents, at the cost of some $40 billion of taxpayer funds, the rollout of almost a Soviet era approach to national infrastructure. You can see how proud they would be to stand up in their caucus and, in the great Soviet tradition, say, 'Look at this magnificent new project that we are building across Australia.'

Mr Husic: Reds under the optic fibre. Not reds under the bed but reds under the optic fibre.

Mr CIOBO: The fact that there are so many commercial marketplaces that exist in our metropolitan areas where private operators would be more than willing to spend private company money to achieve exactly the same outcome seems to be lost on those opposite.

The DEPUTY SPEAKER ( Dr Leigh ): Order! I remind the member for Moncrieff that we are debating the Financial Framework Legislation Amendment Bill (No.1) 2011 and ask him to keep his remarks relevant to that. I urge the member for Chifley to ensure that those remarks are heard in silence.

Mr CIOBO: I take this opportunity to highlight that this underscores why there is some confusion. Nothing could be more relevant to the bill than talking about the need to achieve good quality spending for taxpayers. The NBN Co. is an example of not achieving good quality spending for taxpayers because NBN Co. is about nationalisation of telecommunications in this country. It is not about good quality spending—

Mr Husic: Mr Deputy Speaker, on a point order: I heard a very clear direction from you and I am concerned that the member for Moncrieff is challenging your ruling. I urge him to be relevant to the bill.

The DEPUTY SPEAKER: I thank the member for Chifley. The member for Moncrieff will return to his remarks.

Mr CIOBO: I will continue my remarks because, as I am very certain the Deputy Speaker understands, the financial framework legislation that is before us is about ensuring that government agencies are spending taxpayers' money appropriately. It is about accountability processes in government. The NBN Co. is a classic case of a new government agency. We are seeing some $40 billion of taxpayers' money going into NBN Co. and we are now seeing the rollout of this spending across the Australian community. I think—and I would caution that I am not absolutely certain of these figures because I am going on memory—that it has been put forward by the government that by the end of this calendar year there will be fibre rolled out to some 700,000 homes across Australia. It will be rolled out—I will come back to the bill because I can see the member opposite getting all excited—by a Commonwealth government agency to 700,000 homes.

At this point in time, as I understand it, there are 20,000 to 30,000 homes that have had fibre rolled out to them. So we are talking about 670,000 homes that are apparently going to be reached between now, February, and December this year. That kind of environment creates a recipe for disaster when it comes to good-quality spending by a government agency. That kind of environment masks a multitude of spending decisions that no doubt will run entirely contrary to the spirit of this bill and entirely contrary to good purchasing decisions when it comes to taxpayer dollars.

Mr Husic: I rise on a point of order. This is clearly outside what the bill is proposing to do.

The DEPUTY SPEAKER: The member for Moncrieff is reminded that I have read the bill and the second reading speech. I am struggling, though I have given him a long bow, to work out how discussions of the National Broadband Network are relevant to the bill. The Speaker, at the beginning of this week, issued a new ruling on relevance. It is that new ruling on relevance that I am seeking to uphold in this debate.

Mr CIOBO: I always seek to comply with the chair. I am trying to be helpful, because I am not sure if the member for Oxley is intending to speak on the bill. I will move, with great swiftness now, to a conclusion and outline just a couple of additional aspects of the bill.

Schedule 3 of the bill corrects two misdescribed provisions in the Financial Framework Legislation Amendment Act 2010. The two provisions sought to update section 27A of the Commonwealth Authorities and Companies Act, by replacing references to 'at common law and in equity' and 'at common law or in equity' with 'under the general law'.

Schedule 4 relates to special account appropriations under the Financial Management and Accountability Act 1997. Effectively this is a very minor change but one that is profoundly important. As it currently rests, determinations for appropriations are done by way of a disallowable instrument which takes effect five sitting days after the determination was effectively moved through the parliament. Such appropriations are often used by new government agencies once they are established. For practical purposes this act will now, under schedule 4, move to allow the minister to prescribe a date in the instrument on which the appropriation takes effects. It is a small change but an important change, because it enables the appropriations for new government agencies to effectively not take place five sitting days after it has gone in but rather on a prescribed day, which is a key thing.

In addition there is an area that raises specific concerns for me—that is, with respect to the schedule 4 initiative to offset debt. Effectively it is a provision to give the finance minister the discretionary power to offset debts owed to the Commonwealth by an individual or entity against payments owed to the same individual or entity. As it stands currently, the Commonwealth must pay in full regardless of debts owing. This new provision will ensure that there is a mechanism for the Commonwealth to recover debts in a cost-neutral way and in a more efficient manner than is allowed under provisions.

I want to put very clearly on the record my very profound concerns about this. I think that this is not a good provision. The reason is this: I know of numerous examples where the Commonwealth asserts—I emphasise 'asserts'—that there is a debt owing to the Commonwealth. Under this provision, opportunity will arise for the Commonwealth to not make a payment or a net payment to an individual, company or a recipient of the Commonwealth, an amount that the Commonwealth merely asserts it is owed. My concern is that this could have a very significant impact upon those who have dealings with the Commonwealth, on the basis of a mere assertion. The fact is that there are numerous instances where the Commonwealth's word is not sacrosanct—where the Commonwealth's word is not holier than thou, is not like Scripture from the Bible that goes without challenge.

There are numerous instances where the Commonwealth can assert that a debt is owed to it and be wrong. There are numerous instances where the Commonwealth can assert that a certain quantum of money is owed when in reality it is owed a different quantum of money. My concern is that, where there is already a pervasive culture that I am constantly hearing about from members of my community—that government departments engage in a form of bullying when it comes to payments—this provision will entrench that attitude. I suspect it will be an approach that says: 'It's my way or the highway. We allege that you owe us $500. We owe you $600, so you're only getting $100,' to use a basic example. I think there is very good reason for those two processes to be entirely separate. There is very good reason for the Commonwealth to pay the $600 and invoice the $500, to continue the example.

I believe it is not good enough, in what often is the case—and I particularly emphasise this to the member of the executive at the table—to simply say that the Commonwealth has the right to net out the difference between an assertion of an amount owed to the Commonwealth and an amount that the Commonwealth does in fact owe to an external party. For that reason, I say that I as an individual member of this House significantly disagree with the provisions of this act that go to that particular matter. It is simply, I believe, going to be abused by Commonwealth government bureaucrats to reinforce an assertion they make where a debt is owed, and I do not believe it is appropriate that that should be contained in the legislation.

The final schedule is schedule 5 of the act, which proposes to repeal two redundant special appropriations to clean up the statute book; they are the Appropriation (Development Bank) Act 1975 and the Car Dealership Financing Guarantee Appropriation Act 2009. With that, I conclude my remarks.