Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I rise today to speak to the Public Governance and Resources Legislation Amendment Bill (No. 1) 2015. This bill is another stage in the financial framework reform process that Labor commenced when in government. We initiated a review process—the Commonwealth Financial Accountability Review—which involved two years of detailed consultation and consideration of issues, culminating in the development and passage of the Public Governance, Performance and Accountability Act 2013.

The new legislation, which replaced the old Financial Management and Accountability Act and the Commonwealth Authorities and Companies Act, established an integrated financial management framework for entities within the Commonwealth. The concept was to design an appropriate framework that would improve the performance, accountability and risk management across government. The 44th Parliament has dealt with a number of pieces of legislation relating to the implementation of the framework governed by the Public Governance, Performance and Accountability Act 2013, which Labor has supported.

The bill before the parliament today continues the reform process we put in place to ensure the continual effective operation of the financial framework. This bill may be the first in a series of bills that may be introduced and developed, in the future, that would continue to improve the financial framework arrangements. This would be similar to the series of financial framework legislation amendment bills that Labor put through the parliament when we were in government to deal with similar issues to the previous financial framework legislation.

The vast majority of the amendments that are contained in this bill are housekeeping items of a technical nature and are uncontroversial. Some of the proposed changes that are in this bill relate to amendments that were unable to be made at the time that the Public Governance, Performance and Accountability Act took effect on 1 July 2014, for various reasons. As a result of further consultation with relevant entities, these amendments can now be made to the relevant legislation to ensure that they interact properly with the new financial framework.

I will go briefly through the contents of the bill. Schedule 1 of the bill amends sections of the Public Governance, Performance and Accountability Act 2013 which relate to definitions, corporate plans, arrangements for GST and streamlining the administration of transfers of functions between non-corporate Commonwealth entities. These amendments ensure a continuation of the arrangements that were in place under the previous financial framework, as well as providing sufficient flexibility in relation to corporate plans. Schedule 2 of the bill amends sections of the Public Governance, Performance and Accountability (Consequential and Transitional Provisions) Act 2014 which relate to reporting periods, Commonwealth repayments and other items which ensure the improved operation of the financial framework legislation. I will return to schedule 3.

Schedule 4 of the bill ensures that the Clean Energy Regulator and the Climate Change Authority are listed entities for the purposes of the new financial framework. These are sensible and necessary amendments to make. Schedule 5 of the bill amends 22 acts, including the Australian National Registry of Emissions Units Act 2011, the Financial Framework (Supplementary Powers) Act 1997 and the National Land Transport Act 2014 to align and harmonise them with the Public Governance, Performance and Accountability Act to ensure that there is consistency with the new financial framework. These amendments do not change any of the policies or statutory functions contained in the legislation that is sought to be amended.

Schedule 6 of the bill makes amendments to a series of acts, which are—in the main—minor, technical in nature and uncontroversial, such as amendments to the Reserve Bank Act, the Industrial Chemicals (Notification and Assessment) Act, the Future Fund Act and the Health Insurance Act. There are also amendments to the Air Services Act, which will provide Airservices Australia with an increased ability to manage foreign currency risk effectively. That is by managing foreign currency exposure on operating expenses including insurance premiums and technical support services worth around $5 million to $15 million per year. Similar statutory powers to manage foreign currency risk already reside with the Export Finance and Insurance Commission, the Reserve Bank and Australia Post.

Schedule 6 also includes amendments to the Australian Trade Commission Act, relating to the inclusion of domestic tourism as part of the Austrade chief executive officer's functions. I understand that the Shadow Minister for Tourism, the member for Grayndler, will have more to say in relation to this amendment. He is a passionate champion of tourism. Schedule 7 of the bill relates to transitional provisions relating to legislative instruments and transitional rules that the Minister for Finance can make. Again, these are uncontroversial.

Now we have referred this bill to the Senate Finance and Public Administration Legislation Committee to give us assurance that there are no issues with the legislation before us today. Particular sections of the bill that we are seeking assurance on include schedule 3, which relates to the removal of body corporate status from the Clean Energy Regulator and the Climate Change Authority. For amendments in Schedule 6 relating to the Auditor-General Act, the proposed amendments there would expand the current exemptions to disclosing information on proposed audit reports to drafts, extracts of proposed reports and any other reports, including drafts, which are created for the purpose of preparing a proposed audit report.

The current exemption means that unless the Auditor-General's permission is granted, people who have been provided with a proposed audit report for comment cannot provide it to others. There is a two-year imprisonment penalty attached to this unauthorised disclosure. The amendments in this bill would also extend the imprisonment penalty to the unauthorised disclosure of the drafts and other extracts that I described earlier. We just want to be sure that there are no issues with these provisions of the bill.

It is appropriate that this bill is being debated in the week when the next so-called repeal day is scheduled. I would remind the House of the situation the last time the parliament dealt with legislation relating to public governance: when Labor successfully moved amendments to save the Commonwealth Cleaning Services Guidelines, only to see them abolished in another way 24 hours later. The same government that gave $1.1 billion in new tax breaks back to multinationals cut the pay of the cleaners who clean their offices by $2 an hour. That is an amount that probably is not much to those of us who enjoy the jobs of representing our constituents in this place, but I can assure honourable members that losing $2 an hour is a considerable pain felt by those who work as cleaners.

Labor understands the necessity of a well-functional financial framework. Pending the results of the Senate committee's inquiry, we will be providing our support for this bill as it is necessary for the continual improvement of the financial framework and a further aspect of the reform process that we put in place when we were in government.

Angus Taylor (Hume, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Public Governance and Resources Legislation Amendment Bill (No. 1) 2015. This bill, if passed, will amend approximately 33 different acts across the Commonwealth. It will make changes that are mostly technical in nature to address matters of governance and resource management within our public service. I have couple of examples, without going through all 33 acts. The bill seeks to amend the Clean Energy Regulator Act to remove the body corporate status of the Clean Energy Regulator and the Climate Change Authority, as this is not required for them to perform their statutory functions.

The bill seeks to amend the Australian Trade Commission Act 1985 by including the words 'domestic tourism' as part of the role of Austrade's CEO. It also seeks to make amendments to the Reserve Bank Act to ensure that disclosure requirements for members of the Reserve Bank boards are varied to allow for their responsibilities in relation to monetary policy decisions and the bank's role in the financial system's stability. These are all sensible amendments, all necessary improvements, to continue laying the foundation of a modern streamlined Commonwealth public sector.

The bill is part of a much broader program of reform which will shape the enhanced performance of our public service organisations, reform that comes under one key banner: delivering more with less through sensible innovation, or what economists call productivity. There has been a revolution underway in the private sector for nigh on 20 years which has delivered us better products, better services and better lives—a revolution that has changed the way people work, how they spend their time and the way they interact with each other; a revolution which until recently has largely passed over the public sector, particularly under the last federal government. At the heart of this is a very simple lesson I learnt from almost 20 years working as a management consultant across leading private and public sector organisations; that is,    we can use simple management techniques to ask people to focus on what really matters and to deliver what really matters to customers and other stakeholders.

In my work before I came to this place, I saw the impact time and time and time again of doing this well, and I have given illustrations of this in the past. My first experience with this approach was in a major steel mill not far from where I live now, where we asked each part of the business to focus on stretching achievable targets to improve performance. Front-line employees were an integral part of the process, because they know better than anyone where to find the opportunities for improvement. They came up with many, many ideas, and each was quantified and tested with others across the business. Where the ideas cut across many different parts of the business, cross-functional teams were formed to test and refine the ideas, and then senior management was required to review the ideas and make sure they were going to reach aggregate targets.

Middle managers could not hide from fantastic ideas coming from the shop floor, as had been the case historically—that is, historically, they were able to hide. The ideas were implemented and carefully tracked with complete transparency to everyone in the organisation. This approach is now familiar in the private sector. It has been used many, many times over. In this particular case, over 20 years ago, the results were absolutely extraordinary. The business delivered outcomes that no-one could ever have anticipated. Costs fell, output grew and profits went up. A business that was in real trouble became the jewel in the crown for the parent company. Most of the employees actually loved it, because most people love to deliver and love to contribute. The steel mill became a worldwide benchmark for outstanding performance.

The implications of this for public services are profound. But to understand why this is so important, it is critical to understand the challenge we face as a country. As we saw in the Intergenerational report, our current debt and deficit is a problem. But the longer-term challenge we face is the rising level of expenditure. The Parliamentary Budget Office tells us that we have expenditure locked in at somewhere close to four per cent year and income rising at closer to three per cent. The simple mathematics of that is that, in a relatively short period of time, the deficits become monstrous and the debts become even more monstrous. It is simply a fact of expenditure rising faster than income. In areas like health, education and welfare, what we saw from the last government was a strong inclination to lock in that growth in expenditure in a way which was totally unsustainable for the country. As I say, only a one per cent difference in growth in spending versus income is enough to deliver the extraordinary outcomes that you see in the Intergenerational report.

What we saw from the last Labor government in terms of performance of our government services was sobering. To look at a few examples, we saw mess after mess after mess. I will start with education. If we apply the simple techniques that I described earlier to look at the targets we should be seeking to achieve and what we actually achieved, the story really is appalling. In primary education, between 2007 and 2013 we moved from 12th to 22nd in the world. If we look at the quality of the education system, we moved from eighth in the world to 23rd in that same six-year time period; if we look at the quality of maths and science education, we moved from 24th to 37th; and if we look at the availability of research and training services in our education system, we moved from 16th to 23rd—all of this at a time when our expenditure was growing at almost unprecedented rates. It was an appalling outcome.

Then we move to the NBN—and we have all heard much in this place about the failure of the NBN strategy of the last government. In 2010 the business plan target for houses passed by fibre was 1.27 million. The result was less than 20 per cent of that—208,000. If we look at houses with fibre service, the target was 511,000, and the result was 34,000—an epic, epic failure in delivery. If we look at the immigration program, the target was to avoid illegal arrivals, but the results were similarly stunning. In 2008, based on the benefit from the very good policy of the previous Howard government, there were 161 arrivals, although they were climbing fast. In 2009 there were 2,700; in 2010 there were 6,500; by 2012 there were 17,000; and then, of course, in 2013 there were 20,587—an extraordinary and epic failure of delivery. And there were many other failures.

As a government we have set itself some very, very simple targets and delivered on them: no boat arrivals; three free trade agreements; and getting rid of unnecessary taxes—very, very simple targets that were delivered. There are great examples of many other governments who have done what I am describing well—set yourself clear targets, chase them and deliver. Indeed, the Labor Party's hero in the UK, Tony Blair, focused a huge effort on government accountability and, despite the critics, the results were strong. I take the example of Her Majesty's Revenue and Customs, the equivalent of our Australian Taxation Office, our ATO. I can go onto a website in the UK and see, in very simple form, all the indicators that the equivalent of our tax office in the UK is pursuing, laid out quarter by quarter in a very clear fashion. I can see where they are improving and where they are not. It lays out customer service indicators, cost indicators and tax revenue indicators all on one page. I can see exactly how they are going on collecting tax; I can see what the tax gap is; and I can see exactly how much money is not being collected that should be. We see similar approaches being taken by the South Australian and New South Wales governments. This approach has been fundamental to the philosophy of this government.

Central to this is a desperate need for innovation and experimentation in how we deliver government services—health, education and welfare. We can only cap the spending growth that I have talked about if we innovate. Indeed, a one per cent additional productivity gain over the next 20 or 30 years, which is the sort of productivity gain that the private sector would eat for dinner, would ensure that our debt and deficit do not grow. A 1.5 per cent productivity gain would be enough to quickly reduce debt and deficit. This is well within reach of what we have seen achieved in the private sector, and it is exactly those innovations that we are putting forward constantly before this House and the other place. We are now pursuing many of these things in ways that do not require the legislation of this House and the other House, because of obstruction from those opposite.

We cannot afford for anyone to act as blockers to this innovation. It is incredibly tempting for interest groups, and particularly public sector unions, to obstruct innovation so as to protect their constituents from change. But such a strategy would be and will be disastrous for Australia, consigning our government services to drastic cuts further down the path. We need leadership from those organisations from across the community, and we have seen the sort of leadership we need in the past.

I want to stop for a moment and talk about one particular aspect of this which has come up in this House a number of times: the impact of this government's policies on Canberra and on the Public Service. This is of great interest to me because I have a significant number of constituents that work in Canberra and travel into Canberra from my electorate each day. From time to time you will hear Canberra based politicians arguing that this focus on public sector performance that I am describing is a huge problem for Canberra. I am here to say that I think that, done right—and I think we are doing it right—this will re-energise the Public Service here in Canberra. It will provide opportunity. But one of the things that we have to remember about this region is that the private sector has historically been a significant part of the activity here. Unfortunately, in the time of the last federal government, we saw private sector activity in Canberra drop from 60 per cent to around 50 per cent. To compare, across Australia the number is about 85 per cent. The extravagant spending of the last government moved Canberra away from where it needs to be, which is a city that has a vibrant private sector that is growing and moving under its own steam. It was moving in exactly the opposite direction to where it needs to go. There are extraordinary opportunities for this region, whether it is in food and agriculture, in education or even in tourism. These are sectors that have not been leveraged to the extent that they can be. I am determined, certainly in my part of this region, to make sure that we capture the opportunities as they come along. Adding to the challenge of realising the full potential of this region has been a series of Labor ACT governments that only see jobs coming from the public sector. It is time for us to move beyond that.

Let me finish by coming back to the amendment bill before the House. Whilst it is focused on technical amendments, it is part of a broader public management reform agenda. It represents the next step in simplifying the resource management and governance arrangements of a number of Commonwealth bodies. Now, more than ever, we need governments that can deliver on their programs. Now, more than ever, we are driving that cultural change in managing Commonwealth resources that is so necessary. The performance standards that have been adopted by the private sector must be institutionalised across the federal Public Service. There must be gradual and staged reform that is sensitive to our starting point, but, if we are to move our country forward, to compete effectively on the global stage, the ultimate reform must be transformative.

I welcome the confirmation this morning that the Labor Party has agreed to key further amendments now being included in this amendment bill before the House, namely to allow parliamentarians to catch up with the rest of the Public Service and the broader community in reference to being able to make contributions into self-managed superannuation funds when they are in the accumulation scheme established by the Parliamentary Superannuation Act 2004. Amendments will also be made to the Remuneration and Allowances Act 1990 to remove the restriction on salary sacrificing to self-managed super funds. The amendments will allow parliamentarians to have the same opportunity to manage their retirement savings through a self-managed superannuation fund as is currently available to Commonwealth public servants and is available more broadly in the community. I commend this bill to the House.

Debate adjourned.