Andrew Murray (WA, Australian Democrats) Share this | Hansard source

The incorporated speech read as follows—

As the Finance spokesperson for the Australian Democrats, I rise to speak to the Appropriation Bill (No. 3) 2006-2007 and the Appropriation Bill (No. 4) 2006-2007, which I shall discuss concurrently.

The Appropriation Bill (No.3) appropriates sums additional to those sought through the Appropriation Act (No. 1) 2006-2007 for the ordinary services of the Government.

Similarly, the Appropriation Bill (No. 4) appropriates sums additional to those sought through the Appropriation Act (No. 2) 2006-2007 to fund unbudgeted administered expenses and non-operating costs, that is, for purposes other than the ordinary services of government.

The additional amounts to be appropriated are valued at approximately $1.84 billion with $1.2 billion sought through Bill number three and $637 million sought requested through Bill number four. After accounting for savings, the net additional appropriations represent approximately 2.1% in additional funding requirements, a reduction from the 4.7% that was sought in the previous fiscal year.

It is important to remember that appropriations bills are not as important as one might think. The money bills in totality, that is all annual appropriation bills as a category, only represent as a rough rule approximately 20% of annual Commonwealth spending.

Thus the $1.84 billion that we are deliberating over here today represents a mere one half of one percent of the total funding needs for this Government for the 2006-2007 fiscal year. Small bickies, relatively speaking, to a large bickie tin.

Now that we have some perspective on these additional appropriations, there are a couple of points that I wish to make. Firstly, we are here under the guise of good governance to approve an extension of budgetary spending by the Government.

These two bills only offer a semblance of good budgeting governance because 80% of Government funding, the critical mass, bypasses annual parliamentary approval and oversight as it is channelled via standing appropriations.

This Government’s excessive use of Standing Appropriations, in preference to Annual Appropriations via parliamentary money bills is the antithesis of good governance.

In a landmark report titled Transparency and accountability of Commonwealth public funding and expenditure tabled in March this year, the Standing Committee on Finance and Public Administration was unequivocal in its recommendations to Government that transparency and accountability needs to be improved when it stated:

The Committee has made several recommendations and a number of suggestions which, if adopted, would go some way to restoring the Parliament’s constitutional and historical prerogatives with regard to the control of the Executive’s funding and expenditure.

There is no administrative or other merit in seeking to exempt the use of public funds from regular parliamentary scrutiny and approval. Yet standing appropriations have this very consequence and continue to grow unchecked.

In the words of Professor Stephen Bartos, a witness at the committee’s inquiry:

The implications of this are that there should be correspondingly greater attention paid to the performance of government programs funded via special appropriations (Professor Bartos, quoted at paragraph 3.14).

To this end the Committee’s Transparency and accountability of Commonwealth public funding and expenditure report recommended that:

The government produce and table with the annual budget documents a document that sets out the past and expected expenditure from all Special Appropriations. The data in that document should be set out against the programs that are funded from the relevant appropriation.

The committee’s recommendation was prefaced by the following words:

Government’s increased reliance on special appropriations as a main source of funding, together with the growth in cross portfolio programs with the attendant obstacles these pose for Parliamentary scrutiny, makes it important that the Parliament and its committees have readily available to them a consolidated document of special appropriations.

A document such as this would at least inform Parliament of the use of special appropriations, and this is a step in the right direction, albeit a rather small one, for the true goal to my mind, is to re-establish Parliament’s fiduciary role entrusted to it by the people to both authorise and supervise the raising and use of public funds.

This is not the role of the executive, because in the hands of the executive all control and accountability by parliament is lost, as is apparent by the quantum and value of the special or standing appropriations that have steadily grown over the life of the Commonwealth.

Indeed, they have grown to the extent where today we find ourselves in the ridiculous situation of participating in a parliament that is to all intents and purposes hamstrung when it comes to ensuring that the Government remains accountable for its use of public funds.

This situation is implied in yet another recommendation made by the recent Finance and Public Administration Committee report, which states:

The Committee recommends that the Government implement a system of review for standing appropriations to ensure that access to the CRF is withdrawn when no longer required and to ensure that standing appropriations are subject to periodic government and parliamentary review.

A more useful reading of this Committee recommendation is to rearrange the statement to highlight what Parliament presently lacks, that is to say:

The Government lacks a system of review for standing appropriations, the mechanism which is employed by Government to spend over 80% of public funds;

That access to the Consolidated Revenue Fund is not withdrawn because of the open-ended nature of standing appropriations; and finally

That standing appropriations are not subject to periodic government and parliamentary review.

The due process of parliament approving additional Government expenditure is supposed to be a significant and important occasion.

Other countries, some of our close peers, acknowledge and understand the corrosive effect of standing appropriations. In the United Kingdom for example, standing appropriations only amount to approximately 25% of total government expenditure, the inverse of our experience here in Australia.

More matters of concern are to be found in a report on the financial management of special (standing) appropriations in November 2004, the Australian Audit Office found widespread illegalities and lack of accountability and control in the management of these appropriations.

More than half of the appropriations were not properly reported by departments and agencies in their annual financial statements.

Returning for the moment to the matter of annual appropriations, the committee was concerned that agencies have had the ability ever since the 1999-2000 Budget to carry over unspent annual appropriations from year to year. (As we know, before that time all agencies had to return unspent annual appropriations to the Consolidated Revenue Fund). The Parliament is not given the opportunity to determine either the extent or the application of these carry-overs.

This issue has in part been addressed in the Committee report which recommends that

Agencies report the amounts of their unspent appropriations and the reasons for the underspend to Finance at the end of each financial year and that the government tables in Parliament a consolidated report on the amount and reasons for the underspend within six months of the end of the relevant financial year.

As I have already stated, the two bills seek to appropriate an additional $1.84 billion in funding. Items of note include:

$30.2m to the AFP to fund deployment to East Timor following civil unrest in May 2006

$98m to Defence for additional ordinary services

$84m in funding to enable payment for the Great Barrier Reef Marine Park Structural Adjustment Package

$70m for the Health and Social Services Access Card Project.

$136.1m for rebates for LPG vehicles; and

$222.5m to the Department of Agriculture, Fisheries and Forestry in relation to finance for Exceptional Circumstances assistance support.

Many of these are no doubt worthy projects warranting additional funding. But I would note that the Parliament is being asked to provide $70 million in additional funding for the access card project, the enabling legislation for which was withdrawn just over a week ago. It was withdrawn because the Finance and Public Administration Committee reported that the government needed to go back to the drafting board to address defects in the legislation.

So money is being approved for a legislative proposal, which itself has neither been finalised as a bill nor been approved. This is dangerous, and the Minister of Finance needs to explain this matter to the Senate.

The merits or otherwise of the access card proposal have been raised elsewhere. What I question is the approach of the Government in seeking funding for an initiative before the Parliament has had the opportunity to both scrutinise the legislation to establish the measure and satisfy itself that public money should be spent on this measure. This is presumptuous, to say the least, and again antithetical to the Parliament’s constitutional and historic role in controlling the Executive’s funding and expenditure.

The Senate Committee has effectively said there must be no further erosion of parliamentary scrutiny of its expenditure by the Government.

If we carry on as present we could face a Government in the future that tries to appropriate all of its funding by means of standing appropriations.

A Government that is not accountable to its people through its parliament cannot claim to govern with a true mandate, and a Government that governs without a mandate is nothing but an elected dictatorship.

Notwithstanding my reservations, I maintain the Democrats long held stance of not blocking Government supply. The bills should pass.