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

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 2023-24. Another year, another JCPAA budget statement. It was a big year last year; we got two budgets in. Of course, this statement has a cult following on budget eve, not least amongst the loyal, dedicated staff in the parliamentary liaison office, who are watching avidly. On behalf of the Joint Committee of Public Accounts and Audit, I present this statement on the draft budget estimates of the Australian National Audit Office, the ANAO, and the Parliamentary Budget Office, the PBO.

The committee is required under the Public Accounts and Audit Committee Act 1951 and the Parliamentary Service Act 1999 to consider the draft budget estimates of the ANAO and the PBO and to make recommendations to both houses of parliament regarding these estimates. For context, the requirement to make a statement to the parliament in advance of the budget being handed down by a government is an important transparency measure. It assists the parliament and the public in making a judgement on the adequacy of the budget provided to the ANAO and the PBO through comparison with the requested funding—what those independent entities asked for—and the committee's recommendations.

For this year's budget, both the ANAO and the PBO have sought additional funding. The committee has carefully scrutinised the ANAO's and PBO's draft budget estimates and has resolved to endorse them, subject to further review of the costings and final estimates which may be agreed with the Department of Finance. The committee considers both offices vital in supporting the work of this parliament and in strengthening integrity and transparency in public administration.

The ANAO are seeking an additional appropriation. In presenting its draft budget estimates to the committee, the ANAO noted that machinery-of-government changes following the 2022 federal election—in particular the creation of two new departments of state—will mean that additional costs have been incurred for mandatory financial statements and performance statement audits. Those audits have to be done to a particular standard, and there's little to no discretion, therefore, about the need to do them and to fund them. Further cost pressures have also arisen from the additional audit effort required to maintain compliance with audit standard ASA 315 to maintain adequate cybersecurity and data storage, as well as to meet the increased cost of external financial statement auditing capability where it is required to be purchased from the private sector, usually for highly specialist commercial stuff or in surge periods like the end of the financial year. The total funding request—subject to further refinement with the Department of Finance, as I said—is in the order of $14 million over the forward estimates.

The committee acknowledges that the government faces difficult fiscal circumstances in determining this year's budget and also acknowledges that the ANAO received supplementation in the 2021-22 budget, although that was predominantly for performance statement auditing, a new function, not to deal with these cost pressures. However, the committee considers that additional funding for the ANAO is critical to maintain mandatory standards in financial statement auditing, and without this additional funding the ANAO would be required—forced—to reduce its performance auditing budget. In the committee's view the government stands to save much more than it spends by meeting the ANAO's request, because a robust audit function is of critical value to any government, driving, as it does, efficiency and effectiveness throughout the public sector. In that context, the JCPAA endorses the ANAO's budget submission, subject to the ordinary parameter changes and any minor adjustments that may be agreed with the Department of Finance. In essence, the committee recommends that sufficient funding be provided to enable the ANAO to discharge its responsibilities, including rebuilding the performance audit program. That's the outcome we're trying to seek. The numbers always move around a bit, and we'll make judgements when we see what's in the budget.

Finally, the PBO's estimated expenses for 2023-24 amount to $9.613 million, and it expects to meet the majority of its fiscal requirements from this appropriation. However, since its creation just over 10 years ago, the PBO has had a special appropriation fund designed to help it meet unexpected cost pressures. That fund, when established, was initially $6 million—it's its cash reserves, if you like—but has run down now to about $1.8 million over the last decade. The PBO is seeking to have the fund replenished to its original level in this year's budget. The committee regards the fund as an important element of the PBO's operational independence. It aligns with international standards, and these are really catchy. If you have a sleeping disorder, you could read the international standards for independent fiscal organisations or independent fiscal institutes, and you will find that fiscal independence through having sufficient cash reserves is a good thing to do. The committee regards this fund as an important element, as I said, of their operational independence and joins with the Presiding Officers to endorse the proposed appropriation.

I thank the Auditor-General and the Parliamentary Budget Officer for their work in support of the parliament—they work for the parliament on behalf of the parliament—and for their cooperation in our detailed interrogation of their budget estimates. I also thank the JCPAA and committee members for their thoughtful and detailed consideration of these budget requests.

I seek leave to present a copy of my statement.

Leave granted.

I present a copy of the statement.

Sitting suspended from 17 : 54 to 19: 30