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Monday, 6 December 1993
Page: 3873


Senator CARR (4.55 p.m.) —I rise to speak to the report on the supplementary meeting of Estimates Committee D. In doing so, I begin by explaining my involvement in this matter. I was given the great honour of participating in this particular estimates committee as a stand-in for another senator who was on leave. So I came to this issue fresh and, in doing so, perhaps I was able to come across the evidence in a different way to that of many of the other committee members. I was only aware of these issues in so far as they related to press speculation. I had to make myself familiar with the detail of the evidence that had been heard by the estimates committee and with the various allegations that had been levelled publicly up to that point.

  As a consequence of my examination of the evidence, I am firmly of the view that there is no impropriety with regard to the leasing of the building known as Centenary House. I became aware that all major political parties in this country lease property to the Commonwealth. That was a fact that I was not aware of until I joined this committee. The National Party has rented property to the Commonwealth; the Liberal Party has rented property to the Commonwealth; and, of course, now the Labor Party is the owner of a building which is rented to the Commonwealth. This is a basic fact of life of which many people in this country are unaware.

  We are seeing double standards being applied when it comes to any matter relating to a commercial arrangement between a building owned by the Australian Labor Party and a government agency, despite the fact that all the evidence available clearly indicates the arm's length arrangements between the government and the commercial contract entered into between a government agency and the owner of this particular building. Not one skerrick of evidence has been produced to suggest anything to the contrary. Despite all the wild allegations of those opposite, not one skerrick of evidence has been produced to suggest that any minister of the Crown or any member of parliament has behaved in any way that is inappropriate.

  All arrangements have been based on the very simple proposition of sound commercial practice. The Auditor-General's office has made all the effective decisions in terms of the selection of this particular site, it has sought a particular site to meet its specifications and it is effectively in control of those arrangements.


Senator Campbell —If someone negotiated a deal like that, you would sue him. If an agent negotiated a deal like that, you would sue the agent.


Senator CARR —Well, we might come to the question of competence in terms of arrangements—


Senator Campbell —We will come to the issue of negligence.


Senator CARR —And negligence perhaps. These are matters that Senator Campbell may find answers to with which he is not entirely happy. People listening to Senator Parer on this broadcast today might believe that somehow the Auditor-General, Mr Taylor, was not aware of the ALP's involvement in the ownership of the property until very late in the piece. It might also be suggested that the Australian National Audit Office played something less than an active role in the selection of the building and the negotiations leading to the agreement. Of course, both those propositions are clearly wrong.

  I preface my remarks by making a few comments about my support for an independent, credible auditor's office, and for ensuring that there is a proper functioning office that can keep public accountability on government expenditure that, equally, has high credibility in its dealings with other government agencies. My investigations suggest to me that had some of the answers given to us on that committee by the Auditor-General's office been given by a government agency, there may well have been a political outcry and a very damning report before this parliament.

  To suggest that files were not adequately kept and that officers were unavailable in normal circumstances in any other agency would lead people to the conclusion that entirely the best practice was not followed—however, not the best practice followed by the Labor Party, by the Valuation Office, or by the Property Group but in terms of the operations of the audit office. Mr Taylor specifically canvassed the issue of ALP ownership at a meeting of senior staff on 12 April and recommended—it is indicated in correspondence—that the office wished to proceed because the ownership had no bearing on the operations of the audit office and the use of that tenanted space. Mr Taylor admitted that he had addressed senior staff on this matter in the Canberra Times on 30 October 1991.

  We need to appreciate that in the negotiations at all relevant times the audit office was involved and consulted. In my judgment, after examining the evidence, it agreed to the terms and conditions of the lease. The 15-year duration of the lease was entirely appropriate to the circumstances on the evidence presented to the estimates committee. It was a specified building to meet the particular requirements of the particular tenant. The developer required the longer term lease to ensure ongoing commitment and to finance the construction. The ALP's involvement in the presentation of various planning documents obviously postdated the arrangements that were entered into, suggesting to me that the audit office clearly had an understanding of what was involved in the lease and in the terms and ownership of that particular property.

  There was further documentation on the escalations clause in the files that the committee received. The auditor indicated to us that he was not aware that on 13 August 1991 Mr Dominic Collins had written to Mr John Barwood of the Australian National Audit Office, Medibank House in Phillip, indicating the various options that were available to the audit office, and seeking its agreement before entering any commitment. He outlined the following options:

(a) (i) Set a rent level at the time of entering a commitment; or

(ii) Set a level now that would apply to the completion of the project.

(b) (i) Establish a gross rent similar to the arrangements in Medibank House; or

(ii) Establish a net rent which provides for the tenant to pay all outgoings.

(c) (i) Negotiate a rent structure based on fixed escalations; or

(ii) Negotiate a rent structure based on market rents.

This clearly indicates the level of discussion that had taken place between officers of the ANAO and the Property Group. What was clear to me in the documentation that was presented is that the audit office was involved through its senior officers. The evidence clearly indicated that the Property Group and the Valuation Office were not prepared to deal with officers unless they were in a senior position within the audit office and clearly had the authority to act for the audit office.

  So I have no doubt in my mind as to the sequence of events that occurred. Firstly, there was the request and the drive for the establishment of new premises essentially coming from within the audit office. The specifications were required to be laid down and there was an expression of interest from 14 different groups seeking to provide a building, including, as I recall, the Liberal Party. Of the 14 options pursued, the Lend Lease-ALP proposition was the one selected. After it was clearly identified publicly that the ALP was involved, the audit office decided to continue with the development.

  Those essential facts are clear. What I am concerned about and where there needs to be further inquiry is the relationship between the Department of Finance and the audit office. There is some tension in that relationship. In terms of the discussion surrounding the resource agreement—which goes beyond the rental of any one building; it goes to the entire financial operation of the audit office—it is not entirely clear to what extent the audit office understood its obligations and the Department of Finance understood its obligations. There appears to be some discrepancy there. This discrepancy may arise essentially because different agencies were involved in the preparation and the negotiation of the lease arrangements. One government agency was responsible for the resource agreement and another agency responsible for the leasing arrangement. The only agency that seemed to have a grip on both levels of activity was the audit office. The Property Group was not party to negotiation on the resource agreement, and the Department of Finance was not party to the negotiations on the lease. I repeat: it appears that the audit office was the only agency that was party to both.

  So we have a problem which relates to the question of responsibility. The honourable senator opposite indicated a moment ago that there was concern about the responsibility of officers concerned to undertake fair and proper authority. As I understand the relevant spending of public moneys provision, finance regulation 44A, it requires that, in accordance with that regulation, it is the responsibility of the officer responsible for spending public moneys to ensure that any proposal is in accordance with Commonwealth policies and will make an effective and efficient use of the public moneys.

  Further, finance regulation 44B, amongst other things, permits a person to enter into a commitment requiring the payment of public moneys only if the proposal to spend has been approved by a person with authority to do so, the commitment is consistent with any terms in the approval, the person entering the commitment is satisfied that the expenditure represents value for money, and sufficient funds to cover the expenditure have been or will be appropriated. These issues need to be addressed in any future inquiry. They do strike me as somewhat odd. If we apply the same standards to the audit office that the auditor applies to other government agencies, perhaps we will come up with some further questions and get some interesting answers.

  There are some basic questions here about political propriety—not the political propriety of the Labor Party or of any particular agency but about an opposition that is effectively bereft of ideas and that finds it necessary to go into these sorts of issues because essentially it has nowhere else to go. It is a major problem in its arrangements. It tells one more about the Liberal Party's thinking than it does about the operations of this government. There is no evidence to suggest any impropriety on behalf of officers of the Department of Finance, of the Valuation Office, of the Property Group or of the Australian National audit office. There is no basis for any claims that are being made about any impropriety involving this government. There is a normal commercial arrangement which responds to the very location that the audit office sought for the property at Centenary House, being the central business district of government in Australia.

  What an inquiry perhaps would indicate is ways in which we can get improvements in the administration of government agencies such as the audit office in terms of its leasing arrangements. However, in my judgment, given the evidence we have seen before this committee, an inquiry will not demonstrate that the allegations Senator Parer has been making have any substance whatsoever.

  Essentially, this is an issue that goes to the provision of very high standard accommodation—to the specification provided for by the audit office. Of course, ownership of the building does not mean control of the actual activities of any particular tenant—any more than a government agency that rents space from either the National Party or Liberal Party has to fear interference from those political parties. The contrary proposition is founded on basic assumptions which are fundamentally flawed. When this matter is looked at properly and rationally with an objective examination of the evidence, it will be seen that there is no basis whatsoever to the claims of impropriety that are being made.