Lindsay Tanner (Melbourne, Australian Labor Party, Shadow Minister for Finance) Share this | Hansard source

The Financial Framework Legislation Amendment Bill (No. 1) 2007 is designed to reform the arrangements whereby government agencies are able to treat revenue that they receive as a result of their ordinary activities, or indeed sale of surplus items, as revenue that does not have to be accounted for in the wider appropriation process; but they can get authority from the Minister for Finance and Administration to deal with that as their own ordinary revenue and therefore to disburse the proceeds in the ordinary course of events for the purposes for which they are set up.

The idea of the legislation makes sense in order to liberate the process from existing arrangements which require the finance minister to give a specific exemption or reach an agreement with the particular agency, empowering them to treat these moneys in a certain way. It was revealed about a year ago, courtesy of an Auditor-General’s report, that this arrangement was being widely ignored or breached. Clearly, that raised questions about whether it was a sensible way to do things. The new arrangement put forward by the government does significantly liberalise this process and allows agencies dealing with these revenues and spending the proceeds of these revenues to be dealt with by regulation and in a more sensible way.

The opposition supports the legislation. We do, however, intend to keep a watching brief on how this unfolds. We are concerned on a number of fronts that the degree of decentralisation of financial decision making that the government has introduced into the government sector at the federal level is excessive and that that has a number of negative consequences—for example, on the front of purchasing, where there is virtually no across-agency coordination, which would deliver significant savings. So there are a range of reasons why we do have some general concerns about these structures. However, at first blush we believe that what the government is proposing here appears to be sensible. We certainly reserve the right subsequently, based on our own evidence of what is occurring in practice, to take a different view. We will be watching with interest, particularly if we are in government and I am the finance minister, which we hope will occur in the near future, to see how this arrangement works. But, on the face of it, it appears sensible and the opposition supports the legislation.

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