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Tuesday, 28 June 1994
Page: 2065

Senator CALVERT —My question is directed to the Minister representing the Minister for Finance. I refer the minister to audit report No. 21 of last year which showed that government credit card purchasing practices had resulted in a $4,500 merchant service charge for the purchase of some 202 containers, whereas the cost of payment by cheque would have been $12.60. Following that, we heard yesterday's revelation that a contractor had offered the government a 1.5 per cent discount to save himself $200,000 in credit card service fees on the purchase of staff uniforms. Why does the government continue to condone the blatant use of taxpayers' funds by not banning the use of credit cards on large purchases? Does the minister consider it acceptable for the government to forgo millions of dollars of potential savings in merchant fee charges? Will the government issue a directive to all departments to ensure that credit cards are used only where there is a demonstrated cost advantage to the Commonwealth?

Senator COOK —It must be the Auditor-General's day in the Senate.

Senator Campbell —Are you putting their rent up again?

Senator COOK —No. Like so many others, this question goes to the Auditor-General's report into the use of government credit cards. It seems to me that what is being omitted in some of the questioning, and indeed in some of the commentary coming from senators opposite, is acknowledgment of the fact that in July last year the Department of Finance issued a guide to all departments on the best practice use of government credit cards.

  As I have said, the Auditor-General's report illustrates examples of where that best practice is perhaps not being complied with because activities have been fraudulent. As well, the report points to a number of areas where, at first blush, it appears that the government credit card has been wrongly used but, on deeper examination, there is a good case to be made that it is an appropriate use of such a credit card.

  Of course the government wants to see its purchasing operations effected in the best and most efficient way to ensure that the taxpayer's dollar is wisely spent, in a scrooge-like fashion. So we are not into waste and we are not into encouraging that at departmental levels of use.

  The best practice guide is the appropriate guide—that is the one that has been followed by the departments. There will be some examples of maladministration in an organisation as large as the Commonwealth but they are, in the scale of things, minor; nonetheless, they are being addressed and sorted out. Action is being taken where fraud is committed. I also point out to the Senate that the Joint Committee of Public Accounts will, I understand, conduct a public inquiry into the use of the Commonwealth government credit cards.

  I am advised by my brief from the Minister for Finance that he welcomes such an inquiry and that if advice from the parliament on how better to administer the system emanates from that inquiry, he will be the first to implement such advice. But I repeat that the Commonwealth does have in place a proper guide to manage the use of this card in the way intended so that it saves money for the taxpayer and is not a drain on taxpayers' funds.

Senator CALVERT —Mr President, I ask a supplementary question. Given the minister's answer, how does he explain that, in the short three-month inquiry that the Auditor-General made, resulting in this report No. 21, almost 20 per cent of the cases investigated were found to be of a dubious nature?

Senator COOK —At this stage my brief from the Minister for Finance should be read into the parliamentary record. It says:

No general conclusions can or should be drawn from the Report's figures which identify a total of 336 out of 1,866 AGCC transactions as being not correctly approved, outside guidelines, inappropriate or instances of potential misuse.

It then goes on to say:

The 1,866 transactions were not a random sample—they were a specific target group that had already been classified as "interesting" from a much larger group of 184,185 transactions.

So here one is looking at all of those ones that were potentially subject to a particular problem, sterilised, and put aside, and then a sample of those was taken. That sample cannot be held to be typical of the performance of the card across the whole of the public sector.