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Tuesday, 18 March 1980
Page: 746

Senator RAE (Tasmania) -When Senator Cavanaghsaid that the procedure adopted precluded me from being able to reply to him, he was not adverting to Sessional Order No. 9, clause 7 (c), which states:

In these proceedings, the same right of speech and time limits shall apply as in debate in Committee of the Whole.

That means that anybody can speak. In brief, I wish to reply to Senator Cavanagh in the hope of being of some assistance. Senator Cavanagh has missed one point in relation to the provisions in the Bill, and that is that whilst the Bill is directing that commercial accounts should be kept- as well as a number of other provisions- the form is to be approved by the Minister for Finance. There is still an Executive act to be undertaken and what can happen and what has happened on a number of occasions in the past, is that there have been lengthy delays and misunderstandings when the Parliament has said that the accounts shall be kept in a particular general form. The organization then sets out to do what it believes is in compliance with what Parliament has directed, and when it has completed its accounts for a year it submits them for approval by the Department of Finance and the Minister for Finance. It is then said: 'No, we think that they should be in some other different form'. Then there can be a situation where somebody has to go right back through the accounts for a whole year and possibly it can be found that the primary documents are not available to enable the accounts to be rewritten, or that all the accounts have to be rewritten. Once that situation arises accounting staff are taken off current accounting and are put on to rewriting. There are extra costs and delays, and the sort of mess to which the Committee has referred on pages 3 and 4 of its report.

Senator Cavanagh - Is that because we are not clear enough or because somebody else is -

Senator RAE - It is because the form of accounts which should be approved is left undefined. I believe that the main function which the Committee undertook was to get the parties together to ensure that each of them had the same idea of what the provisions required by the Parliament in the amending Bill in practice would amount to. The fact is that, after each party heard evidence given by the other party as to what that party believed the amending legislation would mean, each party gave an assurance to the Committee that it was ad idem as to what would be involved as far as Commonwealth Serum Laboratories' accounts were concerned and indicated that, therefore, there should be no problem at all in obtaining in advance approval from the Minister for Finance to the form of the accounts so that before 1 July, when the new system came in, approval would be given to that form of accounts.

In the past that has not tended to happen. In fact, in a number of instances investigated by the Committee the process has taken years. By way of interjection when Senator Cavanagh was speaking I referred to the situation of the Australian Wheat Board. In that instance, amendments were made in 1 974 and in 1 980 we still do not have -

Senator Cavanagh - But it seems that it hasn't got the capability of knowing what is required.

Senator RAE - What the Committee has suggested in previous reports is that people have not adverted early enough to what is required. Once the mess which I mentioned is created, it becomes cumulative and gets worse. We have delays, such as the three year delay with the Australian National Railways Commission while it waited to get matters determined in an attempt to sort out how to produce its accounts. That is a delay of three years with a body which last year received a capital and operating subvention of in excess of S80m from taxpayers' funds. That is a fair amount of money, yet we have waited for three or four years to get some form of accounting from that body using that amount of taxpayers' funds. A period of 3lA years is involved with the Canberra Showground Trust. I do not think it has reported since it was created in 1976.

Senator Cavanagh -I agree with you, but I think the fault is in the organisation.

Senator RAE - No, that is where I disagree with Senator Cavanagh. It is in the form in which the Parliament is imposing the requirements that uncertainties can be created because the detailed form is not specified in the legislation. It is provided that the form shall be approved by the Minister for Finance, which leaves at the end of the legislative process a degree of uncertainty which has to be determined by negotiation.

The view put forward by the Committee to the Senate in this report is that it is important that, before the legislative process is completed, the parties are ad idem as to what the change will mean so that we do not have a situation such as that which occurred with the Australian Housing Corporation, for which amending legislation was introduced in, I think, 1 974. The Act came into operation in the fifty-first week of an accounting year. It imposed an entirely new accounting standard on the Australian Housing Corporation, which then had to go back and rewrite its accounts for the previous 51 weeks. The delay was very considerable. Again, the mess- I use the term deliberately- which was created delayed the efficient functioning of that organisation for a considerable period. It caused the withholding of information from the Parliament and the public while the Corporation sorted itself out. Those are avoidable delays which, if the Parliament ensures that what it is imposing is workable, can be avoided.

Senator Cavanagh - Do you say that it should be explained in the second reading speech?

Senator RAE - Yes. What we are saying is that it should not be necessary every time for a committee to look at this issue but rather that the second reading speech should advert to the fact that consideration has been given to this aspect, that the parties concerned do understand what the new procedures will be and how it will work, that there is the capacity to introduce the new system and that it will work from the commencement of the next financial year or from whatever date has been agreed upon. We do not say that this procedure should be adopted every time. But in the light of the messes we found, we believed it was desirable in this case to look at the situation. Nothing was stated in any of the second reading speeches to indicate how the new system would work or whether it would work. What we wanted to see was a workable arrangement to make sure that the new system would not cause undue delay. We were assured by each of the parties involved that that would not happen. I, too, now look forward to receiving a response from the Minister for Social Security (Senator Dame Margaret Guilfoyle), either now or in due course. But I expect that there should be no problem at all when preparing second reading speeches for legislation seeking to impose this sort of change in accounting standards to make some reference to how the new system will work. I think it is a matter of form. I think there is a general awareness now of the problems that have been created and attention is being paid to this issue. All it requires is that that is reflected in the detail of the second reading speech. I trust that that can be implemented fairly simply.

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