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Monday, 6 December 1993
Page: 3865

Senator SHORT (4.08 p.m.) —I want to say a few words on the Auditor-General's report No. 15 of 1993-94, which is an efficiency report that has been undertaken under the provisions of the Audit Act. It is an important report because it is an audit into the government's national highway program. The national highway links Australia's major cities. It is a large program which provides for the construction and maintenance of the national highway. It is fully funded by the Commonwealth government and is administered by the Department of Transport and Communications, or DOTAC, by way of special purpose payments under section 96 of the constitution.

  The budget for this program is large. In the last financial year, 1992-93, the budget for the national highway was $810 million. As I understand from the report, the proposals for a new national highway program to be introduced during 1994 are currently being considered. Because of that, the report by the Auditor-General has particular relevance at this time.

  The Auditor-General reviewed the economy, the efficiency and the cost effectiveness of the management of the program's funding as administered by the Department of Transport and Communications. In his report, the Auditor-General has identified the scope for DOTAC to considerably improve its management of the program. As the Auditor-General said in his summary of the key points:

The ANAO considers that the Government intention evidenced in various statements requires DOTAC to actively manage and maximise benefits nationally. This is also consistent with the general requirements for special purpose payments. DOTAC considers—

this is in response to the Auditor-General's comments and findings—

that it has given effect to the Government's intentions, and has exercised an appropriate form of program management in the context of the policy framework of the current program.

The Auditor-General says that there is a divergence of views between his office and DOTAC in respect of DOTAC's role in managing the national highway program. The Auditor-General states that this:

. . . highlights an apparent ambiguity that should be formally resolved before the introduction of the new program in 1994 or if the current program is extended.

I hope in his response to this report the Minister for Transport and Communications (Senator Collins) will inform the Senate of the government's views on this ambiguity and what is being done to resolve it. The Auditor-General continues:

The ANAO established some network management criteria and found opportunities for DOTAC to achieve potential savings and improvements in program oversight. The ANAO considers the audit findings are relevant to both the existing program and new program.

The Auditor-General believes that economies can be found out of the budget for the national highway program. He believes that there are ways to `drive the roads dollar further'. There has been notable evidence over recent years to support that view. The Auditor-General goes on to say:

The Bureau of Transport and Communications Economics report of July 1992 identified a maintenance repair option that could result in average annual savings of up to 15%.

On my calculations, 15 per cent adds up to around $60 million per year. That is, by any person's definition, a lot of money if it can be used more efficiently through improved arrangements. The Auditor-General stated in the report that as well as those improvements:

Economies could be achieved by negotiating reductions in the administration expenses of State Road Authorities.

The report specifically mentions two economies that can be achieved. They are project management and contract administration costs which have the potential cost saving of up to $21 million and a further potential saving of up to $8 million through general administrative costs.

  They are some of the ways taxpayers could get better value for their dollars spent on roads under the national highways program. There are other aspects that were commented on in the audit report. The audit report states that management requires improvement. For example, the report states:

DOTAC should ensure monthly payments match the States' actual expenditure and take account of surplus cash from the previous year. ANAO found that in 1992-93 the Commonwealth lost a potential $4.1m in interest on ALTD fund payments surplus to the States' requirements, of which $2m was on payments for the National Highway.

Those matters are of serious concern. They are points with which DOTAC does not agree in all instances. Indeed DOTAC contests many of the findings of the audit report in relation to the current program. For that reason, that places further importance on the need for the government to give a considered response to the audit report. If there are differences of view, then they ought to be resolved. I hope the minister will respond to this report. I did not get the feeling from the minister's body language that we will get much of a response at the moment. I hope that there will be a formal response to some of these matters because I presume we are close to looking at the 1994 program. This is another useful report from the Auditor-General and one which requires a response from the government and certainly warrants careful consideration by this chamber.