Andrew Robb (Goldstein, Liberal Party, Chairman of the Coalition Policy Development Committee) Share this | Hansard source

I will restrain myself, Madam Deputy Speaker. Schedule 2 would amend the Commonwealth Authorities and Companies Act itself to ensure that directors of Commonwealth authorities and wholly owned government companies and enterprises prepare budget estimates as directed by the finance minister rather than the responsible portfolio minister. This would make the act consistent with longstanding practice.

The most significant component of schedule 2 is the new obligation on the directors of Commonwealth authorities and wholly owned companies to notify their responsible minister of decisions about significant events immediately after a decision has been taken. Significant events include forming a company or participating in the formation of a company, acquiring or disposing of a significant shareholding in a company, acquiring or disposing of significant business or commencing or ceasing a significant business activity.

I strongly support this provision. It is consistent with the obligations of public companies, with continuous disclosure required, which makes eminent sense in the case of public companies, which are responsible to shareholders and prospective shareholders to advise what really is going on with the company. There is no good reason why the minister and the government of the day should not be similarly informed about the major organisations that they are responsible for. That raises the question of accountability. I welcome measures to make the directors of government linked entities more accountable. However, they are somewhat meaningless if the Minister for Finance and Deregulation is powerless to stop poor quality spending outcomes based on what the minister could suspect in advance were bad decisions. I will provide an example. Recently, I sent the finance minister a very detailed letter seeking clarity on a number of concerns regarding government due diligence and the oversight of the wholly government owned NBN corporation. The minister responded with literally pages of bureaucratic gobbledegook, yet failed to answer the key questions. It was one of the best examples of a Yes, Minister response I have seen in all my life. There were four pages of processes which, we are led to believe or are to be convinced, show the extraordinary accountability of NBN. Yet in all of these so-called safety provisions for accountability the minister was unable to identify or outline the red flag measures she has in place to identify problematic NBN company decisions that could result in wasteful spending. There were four pages of different procedures that supposedly outlined transparency and accountability, but none of it specified her ability to red-flag measures, which is a very standard risk management procedure of any company worth its salt.

Nor could she say that she had a veto authority over the company's spending activities, regardless of how questionable they might be. The government is the sole shareholder of what is the biggest infrastructure project, at $50 billion, in the history of Australia—virtually all borrowed money. At the moment, after 2½ years, it has 4,000 customers; it has more employees than customers. At Smithton, where it started, only seven people have taken it up even though they got a free offer. The technology that was put in place there two years ago no longer connects properly to the rest of the system. It is a dynamic sector, which they were warned about.

But in relation to the financial framework surrounding the NBN project, which this bill is particularly looking to improve, the original standard was set when the government refused to subject the proposal to a cost-benefit analysis. If you have got no cost-benefit analysis, which provides some reference point against which you can judge future implementation, no wonder there is no capacity for a red flag process. To not have the potential to veto any decision, no matter how problematic or misguided activities might be, is an extraordinary situation for a 100 per cent shareholder, the minister, who is ultimately responsible for the largest project in Australian history. It is the most disgraceful example of poor governance and it is becoming a symbol around the world of how not to manage a major public project. We are becoming a laughing stock over the implementation, the inefficiency, the costs, the timing and the fact that we are the only country in the world, that I am aware of, that is now renationalising the telecommunications sector at a time when that sector is the most dynamic of any sector in any economy. It is the last sector that you would want to renationalise with a bureaucratic culture. Taxpayers' money is at risk in an area where technology is changing by the day. Schedule 3 of this bill is devoted to—

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