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Wednesday, 6 October 1971
Page: 1972

Mr HAMER (Isaacs) - There are many aspects of the affairs of this country that cannot usefully be examined through the procedures of a debate in this House. All the detailed financial examinations which are the responsibility of this House fall into this category. A proper investigation of these matters can be carried out only by a committee which can examine witnesses and consult documents, and avoid the tactics of confrontationstatement followed by flat contradiction, ending in personal abuse that all too often result from the procedures of debate. Technical matters as distinct from policy issues, need to be inquired into, through the taking of oral and written evidence rather than debated.

This House recognised this problem when it established a Standing Committee on Public Accounts. This was a valuable step, but in my opinion it does not go far enough.I recognise that we must avoid the trap into which the Senate has fallen of setting up too many committees more than can be adequately manned and staffed. But I should like to propose 2 steps which I believe are within the capacity of this House and which would be greatly to the benefit of Parliament and the nation.

The first proposal I have is to set up a standing committee on taxation. In this chamber we scarcely examine taxation measures at all, yet there are many areas which are crying out for examination and the type of investigation which could be satisfactorily carried out only by a committee of the House, such as the regressive nature of income tax deductions; whether the tax deductions which are allowed should be from taxable income or from tax payable; whether income in kind should be included in taxable income; and the definition of an investor. The list is almost endless. It is true that these matters are presumably kept under review by the Treasury and the Commissioner of Taxation, but they are instruments of the Executive, and do not absolve the legislature from its responsibility for closely and publicly examining the tax structure. The decision on which tax measures to apply, of course rests with the Government, for it has to raise the money and it has to bear the odium. But an examination by an all-party committee would probably make it easier for the Government to correct taxation anomalies and it is, in any case, the responsibility of the House to conduct such a continuing inquiry, and this can be done only by a standing committee as I have proposed.

The second proposal is to set up a standing committee on expenditure. Our present control of public expenditure, through the Public Accounts Committee, is directed almost entirely to the legal aspects of control. Tha Senate committees on the Estimates examine some of the managerial aspects of control and as the ability of this small Parliament - Senate and House - to provide committees is limited, I suggest it would be wasteful for the House to duplicate the work of these Senate committees, although as the House retains the primary financial responsibility, arrangements should be made for the reports of the Senate Estimates committees to be tabled and if necessary debated in this House.

But none of this does anything about scrutinising the long-term or strategic planning of expenditure. We do nothing at all about this and it is probably the most important aspect of Government affairs. This neglect is caused partly by the annual nature of the Estimates, but chiefly by the archaic accounting style in which they are presented. Professor Parkinson points out that our present system of accounts was designed for use during one particular period of history. Introduced during the Second Dutch War in 1666, their primary object was to prevent money from the Navy vote being spent by Charles II on the aptly entitled Duchess of Portsmouth. Even for this strictly limited purpose the method chosen met with no startling success. The system was revised, therefore, so as to assume its present form in 1689, from which year it more or less prevented William HI from spending the money on his friends - who were not even girls. Like most of our other institutions, we inherited this system from Great Britain, and we still have it, although Britain is moving away from it.

The only clear justification for the present form of the Estimates is that it enables the Treasury to wield control over the day-to-day disbursement of public funds. Even for this limited purpose the present Estimates do not appear to be very effective, to judge by the frequency with which Supplementary Estimates have to be presented and by the enormous size of some of these. We would find the present form of the Estimates even more frustrating than we already do if we ever gave the Estimates serious discussion. Any commercial business which used such primitive and old-fashioned accounting methods would be bankrupt in a fortnight.

For long-term control our present accounts are useless. A functional classification of expenditure is essential for this. The national accounts are a first step towards functional accounting for economic purposes - 'but this covers only a small part of the functions of the Estimates. The announcement of the Treasurer (Mr Snedden) that he intended to make 3 year projections of expenditure will be immensely valuable to the House, provided they are prepared on a functional accounting basis and provided they are examined - not debated - by a standing expenditure committee of the House. We would then, I hope, have 3 committees dealing with financial matters: The Public Accounts Committee, determining whether moneys have been spent as Parliament ordered; the estimates Committees in the Senate, watching the managerial aspects; and the expenditure committee, watching the long term policy aspects of expenditure and using functional accounts for this purpose.

We need not, at the outset, go all the way towards planning programming budgeting for the expenditure committee I have proposed. I am sure we will get there in the end, in common with all other developed countries. This type of budgeting is designed to show the link between departmental spending and departmental objectives. By linking resources to purposes and inputs to outputs in a programme and, by looking ahead for several years, the programme budget would be designed to lead to a better appraisal of what a budget cut or increase would mean in terms of a department's programme. Linked with this, although not an essential part of it, is systems analysis to provide a systematic and comprehensive comparison of the costs and benefits of alternative approaches to a policy goal. We need not be too frightened of this for it is nothing new. Cost-benefit analyses seem to have begun in the Garden of Eden, for one is mentioned in the third chapter of the Book of Genesis. But although perhaps we may not yet be ready for systems analysis, the time is long past when we should be examining estimates on a long term functional basis, relating ends and means. This is the right - no, the duty - of this House, and we are entitled to have the Estimates presented in a form which will enable a committee of this House to carry out this examination.

Mr Deputy Chairman.I am sure it has not escaped your notice that I have not spoken at all on the estimates before us. I am sure that all other speakers who follow me will not do so either, because this type of debate is completely unsuitable for the detailed examination of the content and implications of the estimates, which is the inescapable responsibility of Parliament. I hope that by the time the next Estimates debates are held we will have taken the steps I have suggested, and that we will then be able to fulfil our responsibilities both to the Government and to the people. If we do not act to reform known defects in the operation of Parliament we will damage the whole machinery of Government, which depends ultimately for its efficiency on the proper working of the checks and balances. And if we denigrate Parliament, we denigrate ourselves.

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