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Thursday, 9 March 1972
Page: 604

The PRESIDENT - Is leave granted? There being no objection, leave is granted. (The document read as follows) :

Honourable senators will recall that in November, last year I tabled the one hundred and thirtythird report which relates to expenditure from the advance to the Treasurer, 1970-71. The onehundred and thirty-fourth report which I am tabling today relates to expenditure from the consolidated revenue fund for that year and covers the remaining items included in the Committee's examination of the expenditure results of departments. In examining expenditure from the consolidated revenue fund the Committee has sought to ascertain whether or not the principles relating to the formulation of estimates have been adopted by departments. These principles, which are included in Treasury direction 16/9, have been set out in chapter one of the report. The Committee has also sought to ascertain whether or not the departments concerned have maintained efficient administration in the expenditure of funds under the items selected for public inquiry.

In considering this aspect of its inquiry the Committee has taken into account the change in financial policy which occurred in February 1971 and which was designed to achieve substantial reductions in Commonwealth departmental expenditure. This change in policy reduced in many cases the amounts which departments might otherwise have spent in relation to : the estimates. Many of the explanations tendered by departments during our inquiry referred to this change is financial policy with its necessary consequential effects on administrative practices and arrangements. In considering these explanations, the Committee has sought to distinguish between the consequences arising from the change in financial policy and other circumstances which affected financial results and administrative performances.

In recent years the Committee has paid particular attention to the estimates and related expenditure of the departments. It has taken the view that as a poor standard of estimating has wide ramifications it has not only been excessive expenditure that has attracted attention but also the overprovision of funds. The Committee has stated that such overprovisions are undesirable, misleading and perhaps unfair to other departments whose financial needs might not have been satisfied. At the same time the Committee desires to emphasise that it does not regard the total expenditure of available funds under a particular appropriation item as an objective to be sought in all circumstances. Indeed such a criterion could give rise to unnecessary and uneconomic expenditure. It could also give rise to the distortion of administrative practices. In this regard the Committee has been critical of departments that have accelerated payments in order to prevent an appropriation from lapsing. Two such cases were reported in the one hundred and second and one hundred and thirteenth reports of the Committee.

As this report and previous reports relating to expenditure from the consolidated revenue fund show, there are explanations for expenditure variations from the estimates which arise from unforeseen circumstances or other factors and are acceptable to the Committee. In this report, however, as in similar reports of previous years, the Committee has found it necessary to refer to cases of unsatisfactory estimating or inadequate administrative performances that have resulted in shortfalls in expenditure. The Committee has drawn attention to these inadequacies where they have arisen. ] commend the report to honourable senators.

Ordered that the report be printed.

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