Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

I appreciate the opportunity to speak to this bill this morning prior to the rest of the debate. I will confine my comments to enable that debate to proceed as quickly as possible. The coalition supports the Auditor-General Amendment Bill 2008 [2009]. It basically comes out of recommendations of the Joint Standing Committee of Public Accounts and Audit in, I think, 2001. The government of the day had some minor concerns and these have been addressed and are reflected in the current bill. We obviously support the role of the Auditor-General. It is extremely important in the context of proper scrutiny of the activities of government. This bill will enable that scrutiny to be further enhanced. I note that there was, in Audit Report No. 19, released by the Auditor-General yesterday, scrutiny of the CMAX Communications contract for the 2020 Summit and the activities of the Department of the Prime Minister and Cabinet. If you look at that report, it indeed reflects the importance of the role of the Auditor-General and the requirement that we provide the Auditor-General with the requisite powers to address government and government activities. I also note with interest that the spin of the government last night in relation to this report on CMAX Communications and the activities of the staff of the Department of the Prime Minister and Cabinet, involving a senior member of Minister Fitzgibbon’s office, was that this report cleared those activities. As honourable senators know

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Mark Bishop interjecting—

Michael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State) Share this | Link to this | Hansard source

I suspect you protesteth too much, my friend, because I have been talking about this for only about 10 seconds and you are already starting to plead the case. I will make the suggestion to Senator Bishop, Mr Acting Deputy President, that, as much as I do like him and respect him, perhaps he should read the report first and then give some commentary on it. When I am finished I am happy to send it over so he can flick through it. For his benefit I have highlighted some parts of the report so that he can refer to them as well, which I think is in the nature of the spirit of cooperation of this chamber.

The interesting part is that the spin was that there was no undue influence coming out of the Prime Minister’s office in relation to the awarding of a non-tendered contract for the 2020 Summit to a company owned at the time by a senior member of the office of the Minister for Defence, Mr Fitzgibbon. For those who might not have been following this, and it is hard to believe that anyone would not have followed this appalling act of a lack of transparency—so for those who might not have, those who have been away for some time; for about 12 months they would have had to have been if they had missed this—the Minister for Defence’s senior media adviser owned a company called CMAX Communications and CMAX Communications was providing work to the Australian government. So you have a senior member of a senior minister’s office running a company that was taking contracts and taking taxpayers’ funds at the same time as he was operating his job.

This is again for those who have been away for 12 months and are not aware of this appalling lack of transparency. How did CMAX Communications get the job? Through a tender process? No. Through an open tender process? No. Indeed, Prime Minister and Cabinet were recommended to use CMAX Communications by a senior adviser in the Prime Minister’s office. The government put out their spin yesterday about there being no undue pressure. Well, what is the definition of ‘undue pressure’? The senior adviser in charge of the 2020 Summit brings in Prime Minister and Cabinet and says, ‘You might like to consider CMAX Communications for the media role in the 2020 Summit.’ Take the mere fact that that company was recommended, given the relationships between the senior advisers in the Prime Minister’s office and the senior adviser in the Minister for Defence’s office. That mere recommendation was itself undue pressure. So you have got PM&C coming in and you have got the senior adviser saying, ‘Oh, you might like to consider CMAX Communications for this job.’ So what? Does PM&C go away and say, ‘Oh, well, no; we’re not prepared to accept that’—particularly when the senior adviser has probably said, ‘You know the urgency of this contract, don’t you?’ So how do you think PM&C might have responded to that? I might be terribly wrong but I just reckon they might have taken that as a very non-negotiable, subtle hint that CMAX Communications perhaps should get that contract. As further evidence of that, I will turn to page 14 of the report and I will read out paragraph 17:

The basis on which the PM&C delegate made the decision that engaging CMAX Communications represented value for money was not clear from the departmental record that had been made. In particular, PM&C’s documentation did not accurately record the way in which CMAX Communications was identified to it as a possible provider, or the inquiries it undertook to satisfy itself that engaging CMAX Communications represented value for money.

Well, Senator Bishop, game, set and match, my friend, because the departmental records did not in any way refer to that, because the departmental records could not refer to that without giving the game away as to who made the recommendation. Of course the records were not there because they were not prepared to put in writing where the recommendation came from. So not only have you—the government and the Prime Minister’s office in particular—compromised due process and compromised transparency; you have also compromised Prime Minister and Cabinet, the very body that should be providing free and uninhibited advice to the Prime Minister’s office. In the way that you have handled this, you have effectively nobbled them and compromised them severely. For that you should accept great responsibility and you should acknowledge blame.

I give the government due credit for their spin last night in relation to this. It was a masterful piece of political spin from a government that has just about got this 24-hour spin cycle down pat. I will give them their due credit: they are very good at spinning. In fact, I think this government are the masters of spin. They are indeed the masters of spin. But what we did find out from the Auditor-General’s report, which we could not find out from a couple of Senate estimates hearings and a number of other hearings, was this. We finally got confirmation that the recommendation for CMAX Communications was from the senior adviser. Why all the prevarication? Why go through two lots of Senate estimates? Why were you hiding that fact? I will tell you why the Labor Party were hiding it: they knew it did not pass the sniff test. This did not pass the political sniff test. It is another example of the gross arrogance of this government that you thought you could get away with it. You thought you could give a contract to a Labor mate and get away with it. It does not pass the sniff test and you have been caught out. It does not matter what spin you put on this; it just does not look right and you should acknowledge that.

The report went on to refer to a report to this marvellously independent group—the height of independence, the height of transparency!—affectionately known as the Government Staffing Committee! Of course, the Government Staffing Committee is made up of senior cabinet ministers. They were looking into the activities of a senior employee of another one of their fellow cabinet ministers. I am sure that the public would believe they were certainly going to have an open and transparent view of that! What they said was:

... that there was no evidence found of any involvement on the Defence Minister’s Adviser’s part of any influence exerted by him ...

That was never the issue! The Government Staffing Committee was looking at an issue that was not there because the Government Staffing Committee did not want to look at the real issue. What a lot of nonsense! This was never the allegation. The activities of the senior adviser in the Minister for Defence’s office was never the cause for concern. That was not the issue. The issue was the level of influence out of the Prime Minister’s office from a senior adviser giving taxpayers’ money to a government mate, to a personal mate, to the employee of a cabinet minister. That was the issue; it was nothing to do with what Mr Taubenschlag was or was not doing. But we got a rare admission, which I presume was pulled from them kicking and screaming. Even this outrageous group, the Government Staffing Committee, who should never, ever have been looking at this matter, actually noted in the report:

... that there was the possibility of an appearance of conflict of interest ...

The most certainly was. What a gross understatement. Indeed, evidence taken under oath by ANAO supported those conclusions.

There are a number of other matters in here which I think are cause for concern. What we found from this report was not the spin the government put on. If you look behind the report you can see what really happened on this occasion. There were, as the ANAO observed—and I refer to the report:

... a number of shortcomings with PM&C’s contract management. In particular, the contract document did not specify the name of the individual that was to deliver the contract services; and the total amount paid to CMAX Communications ($56 358 plus GST) exceeded the maximum amount specified in the contract ($52 000 plus GST),—

I can see Senator Bishop looking at me and I will get this across so he can have a look at it himself—

and there is no evidence that this issue was identified by PM&C prior to the payment being made.

So we have this cloak of secrecy surrounding the CMAX Communications contract. The government will say: ‘Oh, look, it’s only $60,000. What’s all the fuss about over $60,000?’ I don’t think it matters whether it is $6 or $6 million, quite frankly. It is the principle of this issue which is at stake. Do not think that the Auditor-General’s report in any way clears the government. I am glad that the Special Minister of State has now come in; his staff have obviously alerted him to the debate and I am pleased to see him.

If you look at the principle of this, it is not about $6 or $6 million; it is actually about the appropriateness or otherwise of a senior adviser in the Prime Minister’s office recommending one person only to Prime Minister and Cabinet for a $60,000 effective contract. That is why, as I said earlier on, this report does not exonerate the government. This does not exonerate the activities of the Government Staffing Committee. It does not exonerate the people involved in this. What it does show quite clearly is that the openness and transparency upon which this government said it would act if elected is not there. It is not there. This was not open; it was not transparent. That has been shown by the Auditor-General’s report, despite the marvellous spin of the government last night in relation to this. The Labor Party has compromised Prime Minister and Cabinet and has completely compromised the principles upon which it was allegedly elected.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

Part way through his contribution, Senator Ronaldson said words to the effect of ‘no matter what the spin, it does not look right’. Sometimes if you look a little bit harder and read the actual language in the report, things become manifestly clear. In terms of the contribution just made and the CMAX report tabled late yesterday or early this morning, one just needs to make a few succinct comments. There were two critical findings. Firstly, there was no undue influence by the Prime Minister’s office—that is, there was no improper behaviour and a clean bill of health in terms of process and conduct. Secondly, the costs of the contract were appropriate and compared appropriately to like contracts. The cost of the contract, coming under $80,000, did not require the contract to be let out to public tender. The only recommendation by the ANAO went to what can properly be categorised as minor matters relating to file maintenance and record keeping. So in respect of all of the persons involved in this alleged affair, none have been found at fault at all have been cleared.

Let us now turn to the substance of the bill before the chamber, and I speak in support of the Auditor-General Amendment Bill 2008 [2009]. I want to address four key areas in respect of this bill: firstly, the background to the bill; secondly, the development of the ANAO; thirdly, oversight functions of the ANAO in the procurement processes within the Defence Materiel Organisation; and, finally, government initiatives that will enhance oversight and risk management within the Defence Materiel Organisation, or the DMO.

Firstly, the amendments in this bill stem from a review by the Joint Committee of Public Accounts and Audit back in 2001. They are technical in nature and received bipartisan support in that particular report. As a result, the amendments are not controversial. Madam Acting Deputy President, with your indulgence, I would like to briefly reflect on how we have arrived at this point. The Auditor-General Act 1997 has a history of bipartisan support. The act had its genesis in the work of the Joint Committee of Public Accounts and Audit. It is true to say that the office of Auditor-General was re-established as a result of direct and lengthy deliberations and considerations by the JCPAA. Between 1989 and 1996, the JCPAA produced three substantial reports into the role and modernisation of the office of Auditor-General. The committee looked specifically at how the functions of the Auditor-General could be improved. The main criteria was to provide functional independence for the committee’s and the organisation’s deliberations from executive government. The Keating government, back in 1993-94, endorsed the work of the JCPAA, and a bill was introduced in 1994 which gave effect to this work. Regrettably, that bill lapsed when parliament was prorogued ahead of the 1996 election and it fell to the incoming government to pick up the bat. That leads me back to the present and the bill before the chair today.

The aim of this bill is to improve oversight and accountability in governance while continuing to maintain procedural fairness. To that end, the bill will, firstly, provide clarification of the distribution of performance audit reports, and amendments will mandate that the Auditor-General must provide a copy of the final report to the chief executive of a department. Secondly, the Auditor-General is empowered to provide a copy or an extract from the report to any person or company with a special interest. Thirdly, discretion will allow for the distribution of reports or extracts by the Auditor to ministers who have a special interest. And, fourthly, provision is made for the inclusion of all written comments received on a proposed report to be included in the final report. The fourth point in particular is a most useful new development.

Next it extends existing disclosure and confidentiality provisions to allow disclosure of information to assist in the conduct of a performance audit. It prohibits recipients from using or disclosing that information and it provides that an offence is not committed if the Auditor-General has consented to the use or disclosure of the information. It must be said that these formal amendments bring into line much of what is currently internal administrative practice. They also reflect the recommendations of the 2001 JCPAA report. The bill clarifies the position of certificates issued by the A-G about disclosure of information that may be contrary to public interest. Finally, it updates offences and penalty provisions in accordance with the current criminal law policy.

Ultimately, this bill is about improving transparency, accountability and oversight of government. It meets the current government’s commitment to shine a light in the dark corners of our democratic processes and institutions. We came to government with a comprehensive agenda to increase public accountability and transparency at all levels, and our vigilance necessarily must extend to accountability systems that operate within departments. The point is that the Auditor-General plays a key role in the accountability framework of government, and in that respect the ANAO is a most critical organisation. Over many years in this place, I have had extensive dealings with the ANAO, particularly in respect of my experience in defence, foreign affairs and veterans’ matters. These departments have responsibility for large sums of taxpayer dollars. They also have a responsibility for implementing policy in the areas of national security and for care of our returned service personnel. The effectiveness of the ANAO lies in its expertise in getting to the bottom of whether we get value for money from those departments in the public sector. Its role in exposing waste is valued by members of this chamber, of all persuasions, as well as the public, and ANAO performance audits are the lifeblood of a lot of work done in this particular chamber.

Also, audits inform our opinions on what works and what does not. An obvious example of waste revealed by the ANAO, of what does not work, was the previous government’s Regional Partnerships program. On the other hand, defence procurement shows the valuable work of the ANAO in bringing about sustained improvements in government spending. The DMO are responsible for the delivery of goods and services that equip and sustain our Defence Force. They supply everything and anything from boots to body armour, from tanks to jet fighters. Once a need for a defence capability has been identified, the DMO plays a pivotal role. From the early two-pass approval process, it looks at cost effectiveness of platforms and the feasibility of life extension programs or upgrades. Assessments will include the ability of Australian industry to support the new capabilities to ensure we maintain defence self-reliance. They also provide costings for through-life support of the capabilities and schedules estimates. For this reason, the DMO is the largest project management, engineering and logistics organisation in Australia. As a general rule, minor procurement items have a cost of less than $20 million and major items have a cost in excess of $20 million. Minor items represent less than two per cent of acquisition budget. That is obviously because complex platforms such as the JSF and air warfare destroyers have a price tag of several billion dollars.

In the next 10 to 15 years, it is estimated that 80 per cent of Defence’s fighting assets will be replaced or upgraded. New generation military hardware is on the cutting edge of a lot of new technologies. There is also the constant problem of integrating highly complex systems into existing platforms—all to be done within specified time frames. There is no point in continuing with the schedule slippages that result in capability delivery several years too late and out of date, which has become somewhat the norm in recent years. A classic example of that is, of course, the Seasprite helicopter project. It is an example of everything that can go wrong in the procurement process. That project involved an underestimation of the technical risks involved in integrating highly complex combat systems into 30-year-old copter shells. There were changes to specifications and protracted contract negotiations. There was also no proper schedule risk assessment. It was always a disaster waiting to happen.

That brings me to the core function of the DMO: risk management and risk pricing. There is a dollar attached to every risk. The failure to identify and mitigate risk levels significantly increases the cost of acquisitions. It can also lead to delayed delivery, which can compromise capability and operational safety. The DMO operates in a complex regulatory framework. Along with legislation, there are policies covering payments, open competition and mandatory reporting. There are internal audit services provided by the Inspector-General of the Australian Defence Force and external audit services provided by the ANAO. Through the work of the ANAO today, we see an improvement in decision-making processes based on lessons learnt. In this regard, the ANAO’s DMO 2007-08 Major Projects Report provides a relevant, concrete and up-to-date example of their work. That report was tabled last November and is instructive of the utility of the ANAO.

Defence procurement is a significant area of government spending and constantly attracts a great deal of public scrutiny. In 2007-08, the DMO spent something like $4 billion on major and minor equipment acquisitions. As I said before, those acquisitions are often complex and expensive. Generally, we pay a significant amount of the cost up-front. Priority, of course, is always given to current operations and the need to properly provide for and protect our people in the field. But it is not hard to see why problems occur. In 2003, the Senate Standing Committee on Foreign Affairs, Defence and Trade recommended that the Senate ask the Auditor-General to produce an annual report on the progress of major defence projects. A model for such a report could then be found in the work of the United Kingdom’s National Audit Office. A similar recommendation from the JCPAA followed in 2006, the goal being to improve transparency and accountability in major acquisition projects within both Defence and, more particularly, the DMO. It is fair to say that the recommendations of both committees followed years of reviews of procurement projects by the ANAO—reviews that highlighted a litany of schedule slippages and budget blow-outs.

The Rudd government committed to an annual report process in the lead-up to the last election. We followed through on that commitment with funding in the 2008 budget. The first annual report, as I said earlier, was tabled last November, and that has a list of some nine major acquisition projects that have been reviewed to date. It is a comprehensive cross-section of defence capabilities, major and minor, over the three services—Army, Navy and Air Force. There will be another 21 projects included in subsequent annual reports. It is a benchmark report—that is, it will provide a solid base from which to judge the effectiveness of project management by the DMO in years to come. The nature of the review and the report that was tabled last November was to develop proper processes within the DMO—processes that test and improve performance in the risk management of major acquisition projects.

The role of the ANAO has been to work collaboratively with the DMO to review that progress to date. Progress is going to be measured against cost, schedule and technical performance. It is not a combative or adversarial process. Its value lies in the aim of improving defence project management. To complement this work, the current government has announced the establishment of the Defence Systems Integration Technical Advisory, a joint venture between the DMO and the Defence Science and Technology Organisation. It will further support the monitoring and assessment of project risks. The task of this new unit is to monitor and assess integration risk as well as to perform systems engineering analysis—the two critical failures of the last 10 years. They will also evaluate alternative capability solutions. Presumably, this latter process is part of the first stage approval process in line with both Kinnaird and Mortimer recommendations—that is, the new unit will contribute to risk reduction efforts primarily in the early stages of major projects. This is done in the lead-up to final government approval as part of the two-part cabinet process.

Sometimes, rather arcane and technical press releases understate the significance of a particular development. That is certainly the case with the creation of this new organisation, the Defence Systems Integration Technical Advisory body. What has been the nature of major failure over the last 15 years in this area? The failure has been both of a conceptual nature and technical application. By this, I mean that there has been a lack of comprehension of the degree of risk inherent in a project or in a critical aspect of a particular project. Frigate upgrades, helicopter purchases and communication systems development were all underappreciated, as were the scope of risk, the size of risk, the length of risk and the difficulty of integration as risk factors. Because of this misunderstanding or underappreciation of risk mitigation, strategies were not considered as the norm or adopted as the norm.

In the private sector the sheer size and consequences of this risk appraisal underappreciation, would have had adverse consequences. Consequences could have included the ending of careers, serious capital write-offs in companies and the loss of expertise and notoriety. In some more notable cases the consequences would have been company busters.

As it stands, in recent years in government agencies, the risk and the cost were simply transferred to taxpayers. This is because at inception there was underappreciation or no appreciation of the magnitude of risk by relevant government agencies. Over time I cannot think of a more protracted or serious failure. If there is any doubt on that score, simply look at the file on the Seasprite helicopter purchase.

In my view, this new DSI-TA has the capacity to be of major benefit to the DMO and the government in the defence area. Over time it should radically impact on procurement practices within those organisations. I shall follow its work with interest and seek regular updates on its work, role, performance and outcomes at estimates.

Australia is not an orphan in its experience of failures in defence procurement processes. The US, the UK, Canada and much of Europe have all found themselves in the same boat. However, it is the quality of our accountability and oversight process that suggests we might be set apart in the future.

The amendments in this bill will strengthen the independence and effectiveness of the office of the Auditor-General. It is an issue dear to the heart of this government. Of course other lessons will be learnt and further improvements will be made in the future. But this is a critical step in the right direction—a step toward restoring public trust in government and governance. I commend this bill to the Senate.

John Faulkner (NSW, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

I thank Senator Bishop for his interesting contribution on the Auditor-General Amendment Bill 2008 [2009], which implements the recommendations of the Joint Committee of Public Accounts and Audit, following its inquiry into the Auditor-General Act. I certainly commend this legislation to the Senate.

I must say that I was disappointed that Senator Ronaldson, the shadow special minister of state, took the opportunity to use debate on this important, and I think non-controversial, legislation to politicise the Audit Office by raising the audit report that was tabled yesterday into the CMAX issue. This was only done because, when the audit report into the CMAX Communications contract for the 2020 Summit was tabled, Senator Ronaldson did not see fit to come into the chamber, as is ordinarily the case, and debate the report at that time. There was no comment from the opposition. There was no comment, critical or otherwise, from any senator in this chamber. But having failed in that responsibility, Senator Ronaldson tried to use the second reading debate of this important legislation to raise issues in relation to that report. I think this was a mistake by Senator Ronaldson, and I am about to outline to the chamber why.

It is not the only mistake Senator Ronaldson has made, because he also issued a press release yesterday in relation to the ANAO report, which was headed ‘ANAO report confirms Rudd’s $60,000 CMAX rort.’ I read this press release carefully as one does read a press release from a shadow minister. And, as Senator Ronaldson suggested, I read the report of the ANAO. And when I read Senator Ronaldson’s press release which quoted the report, I thought to myself, ‘Senator Ronaldson’s had a few memory lapses.’ Let me just go through it for the benefit of the chamber. Let me quote directly from Senator Ronaldson’s press release. It said:

The ANAO report makes it clear: “... an employee of CMAX Communications ... had been recommended to them [PM&C] by a Senior Adviser within the Prime Minister’s office”.

That is the first of three quotes in Senator Ronaldson’s press release. What does paragraph 14 of the report actually say? It actually has words before those words that Senator Ronaldson quotes. It says:

In these circumstances, it was reasonable for PM&C to consider the credentials of an employee of CMAX Communications who had been recommended to them by a Senior Adviser within the Prime Minister’s Office involved with organising the Summit.

That was very misleading from shadow minister Ronaldson. It is very irresponsible of shadow minister Ronaldson not to have given the full sentence for the benefit of our friends in the fourth estate. They may not have had time to go to the report like I have; they may not have read the full sentence that commences paragraph 14 of the Auditor-General’s report. That was the first quote of three from Senator Ronaldson.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

Are there more?

John Faulkner (NSW, Australian Labor Party, Cabinet Secretary) Share this | Link to this | Hansard source

There are. You will be interested in them, too, Senator Bishop. The first paragraph of quotes begins ‘The ANAO report makes it clear’ and I have read that out. The second paragraph begins with ‘Moreover’. It reads:

... there was the possibility of an appearance of conflict arising from the Adviser’s [Taubenschlag] continued connection with CMAX Communications after he was employed as a member of Ministerial staff. Subsequent inquiries, and evidence taken under oath by ANAO, supported these conclusions.

Remember: ‘The ANAO report makes it clear’ and ‘Moreover’.

You would think, wouldn’t you, that Senator Ronaldson, in quoting that paragraph, which is 2.35 from the report, would have again quoted the full sentence? I will read it and also the preceding sentence to give context. I will also outline to the Senate for the benefit of Senator Ronaldson and any member of the fourth estate who might be interested that the report referred to is the first report provided to the government staffing committee undertaken by Mr Peter Hamburger. It was not the ANAO report. But Senator Ronaldson does not say that. He just pretends that it is from the ANAO.

This is the context. I will quote from that part of the ANAO report in full directly. I will read the sentence prior to the one that Senator Ronaldson quotes in part and then the full sentence part quoted by Senator Ronaldson. It is from page 44 of the report, paragraph 2.35. It reads:

The report concluded that there was no actual conflict of interest arising from the Defence Minister’s Adviser’s connection with CMAX Communications and his employment as a member of ministerial staff.

It goes on to say:

Nevertheless, the report noted that—

and on we go with Senator Ronaldson’s words—

there was the possibility of an appearance of conflict of interest arising from the Adviser’s continued connection with CMAX Communications after he was employed as a member of Ministerial staff.

It goes on:

Subsequent inquiries, and evidence taken under oath by ANAO, supported this assessment.

Do not tell part of the story. Do not give us half the information. Do not put a few little dots in front of one sentence and fail to include the previous sentence. Let us have all the facts and all the information. Let us have the full report on the table. Let us have a fair dinkum debate about these issues. That was the second quote from shadow minister Ronaldson, the shadow special minister of state, about the ANAO report on the CMAX contract.

What about the third one, which is headed ‘finally’. I will read it. This is Senator Ronaldson allegedly quoting the ANAO report:

The basis on which the PM&C delegate made the decision that engaging CMAX Communications represented value for money was not clear ... given the sensitivities which attest to suggestions of this kind from Minister’s offices, it will be in an agency’s interests to have made its own inquiries, explicitly consider more than one option and accurately document its decision-making process.

What are we to make of this third and final quote from Senator Ronaldson? As invited by Senator Ronaldson, I have read the report. I can identify where the first part of Senator Ronaldson’s third quote comes from. It comes from page 14 of the report, paragraph 17. The first part of Senator Ronaldson’s quote was from this part of the ANAO report, which reads:

The basis on which the PM&C delegate made the decision that engaging CMAX Communications represented value for money was not clear …

The report goes on to say:

… from the departmental record that had been made.

That is in paragraph 17 on page 14 of the report. What Senator Ronaldson did not say, again, is that the report went on to say:

In particular, PM&C’s documentation did not accurately record the way in which CMAX Communications was identified to it as a possible provider, or the inquiries it undertook to satisfy itself that engaging CMAX Communications represented value for money. That said, ANAO analysis indicates that the fee paid by PM&C was comparable to contracts entered into by CMAX Communications with Australian Government agencies prior to the Summit, as well as being reasonable having regard to rates charged by media and communications consultants in other contractual arrangements examined by ANAO in recent years.

So, again, part of the picture, part of the sentence, part of the story. But it is even worse than that, because the third quote from Senator Ronaldson—and this is complex and difficult to follow—was:

The basis on which the PM&C delegate made the decision that engaging CMAX Communications represented value for money was not clear … given the sensitivities which attest to suggestions of this kind from Minister’s offices, it will be in an agency’s interests to have made its own inquiries, explicitly consider more than one option and accurately document its decision-making process.

The second part of that quote is not even from the same paragraph as the first part. The first part of his quote is in paragraph 17 on page 14 of the report, and you will find the second part in paragraph 12 on page 13. The first part of the quote misses a critical word and a critical sentence, and the second part is a part quote from a different paragraph of the report. This is the part of his press release that says:

… given the sensitivities which attest to suggestions of this kind from Ministers’ offices, it will be in an agency’s interests to have made its own inquiries, explicitly consider more than one option and accurately document its decision-making process.

The previous sentence to that, in paragraph 12, was not said. I will quote it in full:

Further, there is no restriction on Ministers’ offices suggesting particular consultants for consideration, providing it is clearly understood that the decision is a matter for the agency (taking into account the requirements of the CPGs). However, given the sensitivities—

and on it goes. Part of a sentence, without the previous sentence, from the end of paragraph 12 of the report, combined with—as the first part of Senator Ronaldson’s quote—the first part of a sentence but not the second part, from paragraph 17. In Senator Ronaldson’s quote the part from paragraph 17 appears before the part from paragraph 12.

This is not a serious response from Senator Ronaldson to an Auditor-General’s report. This is an attempt to fudge the truth and I say, respectfully, that that is not on. I happen to think, given this tripe was reiterated in the chamber by Senator Ronaldson today, the Senate is owed an apology and the Auditor-General is owed an apology. I happen to think that if any suckers up there in the fourth estate swallowed Senator Ronaldson’s lines hook, line and sinker—and a few did—then they had better think again the next time a press release comes out from Senator Ronaldson about a matter so serious. That press release is a disgrace. It is an absolute disgrace, because the issues involved here are so important.

It is quite extraordinary in a situation where the opposition itself asked the Auditor-General to inquire into this matter. I am old-fashioned: I happen to think that is fair enough. It is fair enough, if they are dissatisfied about a government contract and the way that contract was administered, that the Auditor-General be asked to inquire, which he did and did thoroughly. It was the Liberal Party, Senator Ronaldson and Senator Johnston, who asked the Auditor-General to conduct this audit. Fair enough. I can say and have said in this chamber before that the government gave the Auditor-General its full cooperation, as it should. But, having sought the audit, the opposition should accept the Auditor-General’s findings. I always did in opposition. I believe the current opposition should adopt the same standards.

On this CMAX issue, the Auditor-General has found no improper conduct on the part of the Prime Minister’s office or department. The report in fact found:

… it was reasonable for PM&C to consider the credentials of … CMAX Communications …

There was no pressure on PM&C to appoint CMAX. The decision to appoint CMAX was made by PM&C alone and the fee paid was reasonable. Of course, it also says that there were deficiencies. I acknowledge that. Let us acknowledge that and make sure they are fixed up. PM&C has been frank. It has accepted that there were inadequate procedures and it has taken action, as stated in the report, to remedy them. That is the full truth, not part truth, so let us hear no more spin from Senator Ronaldson.

Question agreed to.

Bill read a second time.