Thursday, 30 March 2006
Economics Legislation Committee; Report
The incorporated speech read as follows—
I am pleased to speak on behalf of Labor Senators on this Report of the Economics Committee—the Review of Annual Reports. Sometimes these reports are dismissed as just ‘process’ issues, but in fact the Economics Committee has been engaged in lively discussion and consideration of its responsibilities in dealing with this year’s review.
The Committee has not taken its responsibility lightly, or dismissed the Review of Annual Reports As outlined in the report itself, the Economics Committee has considered a wide range of reports.
I understand that it is unusual for a Committee to make a recommendation, such as that which we have done today. That recommendation, as Senator Brandis has outlined, would help to simplify the task of checking that agencies have taken full account of reporting requirements.
Labor is particularly pleased with the inclusion of this key recommendation which advocates the inclusion of a compliance index in annual reports, particularly for executive departments and FMA Act agencies.
I am also particularly pleased to inform the Chamber that the Department of Finance and Administration is supportive of this key accountability measure. It is our understanding that Finance is taking steps internally to ensure departmental compliance with both the Financial Management and Accountability Act 1997, commonly referred to as the FMA Act. I am further advised that statutory authorities will also be asked by Finance to certify compliance with the Commonwealth Authorities and Companies Act 1997. This Act is commonly referred to as the CAC Act.
Together the FMA and CAC Act are the cornerstones by which federal departments and statutory authorities administer public funds appropriated to conduct their business. Labor contends that not only must agencies comply with the provisions of these legislative instruments,’ but they must be seen to comply. Clearly Annual Reports are the bedrock on which the public depends for its understanding of Commonwealth expenditure. The recommendation to include a compliance index in annual reports is therefore fully supported by Labor.
Labor has a proud history of adhering to high standards of public and fiscal accountability. That’s why Labor’s Shadow Minister for Finance, Lindsay Tanner established “Operation Sunlight”—an expert taskforce and consultation process to make our financial reporting system more effective, understandable and most importantly in the context of Annual Reports, more transparent.
Operation Sunlight has identified the need for the inclusion of a reconciliation matrix in all Commonwealth department annual reports. This would reconcile the measures put forward at the time of the May Budget in departments’ Portfolio Budget statements with the key document reviewing annual expenditure and performance—namely the Annual Report. Such a measure should include page numbers from both the preceding Portfolio Budget Statement and the Annual Report so that the community and interested stakeholders can easily cross reference both documents. Hence we could easily establish whether a department actually did what it said it would do, or more particularly, whether it spent what it said it would spend.
While the Review of Annual Reports does not advocate this measure, it is one I suggest now as a sensible future extension of what is advocated by the Review’s key recommendation. In commending the Report of the Review to Senators, I also foreshadow the reconciliation matrix initiative as one of a number of key initiatives that would feature in any future program of continuous improvement with respect to financial disclosure in our Commonwealth Annual Reporting cycle.
Ordered that the report be printed.