Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

by leave—I wish to make a statement on behalf of the Joint Committee of Public Accounts and Audit concerning the draft budget estimates for the Australian National Audit Office and the Parliamentary Budget Office for 2019-20. Each year, the Joint Committee of Public Accounts and Audit is required by legislation to consider the draft budget estimates of the PBO and Australian National Audit Office and make recommendations to both houses of parliament. I'm sure it's a highlight of budget night for everyone! The committee takes this responsibility—

Mr Laundy interjecting—

That's why the gallery's full, Member for Reid. They're filling up. They're here to hear the statement! The committee takes this responsibility very seriously, and the reason for that is, of course, that it is an integrity measure to help protect—

Craig Laundy (Reid, Liberal Party) Share this | Link to this | Hansard source

I'm going to miss you, Jules.

Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

I'll miss you too. It is to protect the independence of the Auditor-General and the Parliamentary Budget Office and make transparent any changes which the government may then make to their budget, which will be handed down in just a short while. It's a baseline, if you like, for members and senators to measure the appropriation given to these offices. The respective acts of the Auditor-General and Parliamentary Budget Officer, as well as the committee's own legislation, require each of those officers to provide to the committee all information that would assist the committee in making its recommendations to the parliament. So I rise today to fulfil this requirement and make a statement on whether the committee considers that the proposed funding for these officers is sufficient to carry out their respective mandates, and I'll go to each in turn.

The Australian National Audit Office, the ANAO, has advised the committee that it is not seeking supplementation in the 2019-20 budget, but it has advised that the ANAO expects that it will require new policy funding in the future, which is a change since last year. The Auditor-General has advised the committee that approval has been sought for an operating loss in the 2018-19 year by virtue of accessing the prior year's unspent appropriations to meet resourcing pressures. The ANAO's operating loss amounts to $3.13 million, plus depreciation of $1.46 million, for a total operating deficit of $4.6 million. This will be funded from the ANAO's accumulated reserves. The ANAO has estimated that its total ordinary annual appropriations from government will be $69.8 million for 2019-20. That's the baseline, if you like, that members can consider the budget documents against. The ANAO has advised that its transition to a new way of working will require a total investment of $13.2 million over two years, including capital investments of $11.9 million and $1.3 million in operating expenses for accommodation and IT related costs. The committee endorses the proposed budget for the ANAO in 2019-20 and thanks the ANAO for the professionalism it continues to demonstrate in supporting public accountability and transparency.

In relation to the Parliamentary Budget Office, the committee has been informed that the Parliamentary Budget Office has sought supplementation in the 2019-20 budget to continue to support the current level of service that it provides to the parliament. The PBO's expenses for 2019-20 total $8.69 million, and if the funding is approved it will enable the PBO to maintain current staffing levels and to invest in additional data resources, specialist advice and software over the forward estimates period. The JCPAA has considered this request and wishes to convey to the parliament its support for the PBO's proposal and the confidence of the committee that this matter has been given full and proper consideration. In this context, the committee also wishes to again acknowledge the important work done by the PBO and highlight its contribution to both the parliament and the broader community in delivering independent and high-quality fiscal analysis and research.

On behalf of the Joint Committee of Public Accounts and Audit, I also take this opportunity to emphasise the accountability of both the ANAO and the PBO to the parliament, and I'll choose these words carefully as the Chair is reading the same to the Senate. I've received advice from the clerks of both houses endorsing the committee's position that it is the responsibility of both the Auditor-General and the Parliamentary Budget Officer to provide the JCPAA with all the information necessary for the committee to consider their respective budget estimates. This enables the committee to fulfil its responsibility to appropriately advise the parliament on the budget submissions put forward by both agencies. To not dwell on that, I just refer members to my personal explanation which I made to the House last May, which may explain the importance of and some controversy over the committee's position, given the bit of a debacle that happened last year.

In conclusion, the committee will continue to closely monitor the work programs and draft budget estimates of the PBO and the ANAO. The committee is strongly of the view that, as independent authorities and officers of the parliament, the PBO and the ANAO need to be sufficiently funded to fulfil their legislative requirements in order to fulfil their obligations to the parliament, and the committee looks forward to seeing the details of their respective budgets when announced this evening.

The final matter is the appointment of an independent auditor of the ANAO. Under the Auditor-General Act, the Joint Committee of Public Accounts and Audit is required to approve the appointment of a new independent auditor of the Australian National Audit Office. The Public Accounts and Audit Committee Act requires that the committee report its decision to the parliament.

I can confirm to the parliament that the committee has approved the appointment of Ms Eileen Hoggett as independent auditor of the ANAO. The independent auditor is appointed from outside of government to act on a part-time basis to serve as an external auditor to the Audit Office—the auditor who audits the auditor, basically. As KPMG's national partner in charge of external audit and chair of KPMG's audit committee, Ms Hoggett brings suitable experience to this important position, and the JCPAA looks forward to seeing the results of her work.

While noting Ms Hoggett's experience and suitability for the role, the committee has also communicated its view that, at the time of the beginning of the process of appointing the next independent auditor, the Department of the Prime Minister and Cabinet should explore ways to seek applicants for this position from a wider group of possible applicants, not just the big four accounting firms—to look at SMEs. The committee has also recommended that, at the next review of the Auditor-General Act, this matter be given closer examination.

I ask leave of the House to present a copy of my statement.

Craig Laundy (Reid, Liberal Party) Share this | Link to this | Hansard source

Leave is definitely granted.

Julian Hill (Bruce, Australian Labor Party) Share this | Link to this | Hansard source

I present a copy of my statement. I'll give you a signed one if you like!

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

I thank the honourable member for Bruce. Order! The chair will be resumed at 7.30 pm.

Sitting suspended from 19 : 02 to 19 : 30