Tuesday, 8 September 2009
Report No. 3 of 2009-10
In accordance with the provisions of the Auditor-General Act 1997, I present the following report of the Auditor-General: Report No. 3 of 2009-10: Performance audit: administration of parliamentarians’ entitlements by the Department of Finance and Deregulation.
by leave—I move:
That the Senate take note of the document.
The Auditor-General report entitled Administration of parliamentarians’ entitlements by the Department of Finance and Deregulation is a remarkable indictment of the failure of successive governments to put a proper curb on the printing entitlements of parliamentarians. I think it warrants some response in this place. In 2003 I moved to disallow a major hike in printing allowances, particularly for members of the House of Representatives, in the run to an election and I was successful. In 2006 I similarly moved to prevent a hike but I was not successful. On behalf of the Greens I have repeatedly sought a facility for parliamentarians to keep a watch on their spending and for parliamentarians to get advice on whether spending is legitimate.
Yes, thank you, Senator Faulkner. But here we have a document which is a pretty savage indictment of the rorting of the printing allowance by members of parliament to advantage themselves politically.
The Auditor-General is making out, if I am not misrepresenting this—I am shorthanding it—that the printing allowance is meant to help parliamentarians extend their work with their electorates and to give information which is helpful to their constituents but instead it has become more and more a facility to help MPs in election campaigning. It has become a taxpayer funded advantage which candidates who are not incumbents do not have. Therefore, it advantages incumbent members over those who contest elections. On the face of it that is patently unfair. The printing allowance should never have been allowed to do that.
In the report the Auditor-General found that the government turned down approaches in the past for something to be done about this. I am not going to go into the full gamut of the findings by the Auditor-General, but they are an indictment of misspending, self-investment, taking political advantage and misuse of taxpayers’ money. The Greens and I will be expecting that the recommendations of this report, which principally call for a set of guidelines which cannot be broken and which defend the public interest in the spending of printing allowances, be adopted. There are five recommendations and all five ought to be adopted. On behalf of the Greens, I want to propose that this parliament and this government should instigate this. But this parliament should go further. It should set up an independent arbiter to oversee the spending of the monies that come to MPs for use in their electoral work. I do not think it should just be the printing allowance but electoral and other allowances as well.
There is a double side to this. One is that the ‘parliamentary ombudsman’, if you like, would be able to arbitrate the spending of money to defend the public interest, to see that it is not rorted, not self-invested, not giving a particular electoral advantage and not being saved up—as under this printing allowance—to be spent in a run to an election. The second thing is that it will defend the interests of good parliamentarians who are worried about whether they should spend their printing allowance or other money on a particular purpose. They would be able to refer to an arbiter who makes that decision.
Ten years ago, if I wanted something printed in this place using the printing allowance, there was a Senate printing office. They would say, ‘Senator, you can’t spend it on that,’ or ‘Yes, we’ll go ahead and print that,’ or ‘If you take off the Greens logo, that’ll be okay.’ We knew where we stood. That has now been abolished and we do not know where we stand anymore. And, if you do not know where you stand, good people will try to do the right thing, but there will always be those who will try to rort the system. It is embarrassing that we have this report before the parliament but it must be taken note of. The recommendations should be implemented.
We should go further and establish a permanent watchdog, an independent arbiter, to watch over printing allowance spending and other parliamentary spending meant for electoral advantage—that is, the advantage of the people we serve, not the serving members themselves. It is an important matter. There is a pure finding by the Auditor-General of double-dipping here; printing allowances have been used for electoral advantage and then the member, or the party, has sought to get a refund for that printing through the electoral allowance. The already-publicised use of a very limited number of printers, particularly by the bigger parties, have been found to be donors to the parties. An absolute watch has to be put on that.
We must act on this Auditor-General’s report. I think we must be bold and come up with stronger recommendations than the recommendations of the Auditor-General. This is an indictment of misspending of the public’s money in the self-interest of the parliamentarians. We have got to put an end to it. It is simply not right that we put this report on the shelf and do nothing about it. The executive is the agency that must implement these findings. Without the executive, without Prime Minister Rudd taking action on this, it will not happen. I challenge the Prime Minister, the Hon. Kevin Rudd, to not only implement the findings of this Auditor-General’s report this year, but to also go one step further and set up an independent watchdog in the public interest and in the interest of those parliamentarians who want to do the right thing.
Senator Brown, I know that you do have, and maintain, a significant interest in this area. I recognise the contribution you have just made. On behalf of the government, I will briefly outline a response shortly. I will firstly go to a couple of issues. One, the recommendations have been accepted in full by the government. I am pleased to announce today that I have responded to the Australian National Audit Office’s performance audit report on the administration of parliamentary entitlements. Today’s report does show that on the issue of parliamentary entitlements the system is—quite frankly—vague, ambiguous and ill-defined. It is fair to say that the report is critical of both the way politicians have accessed their entitlements and the way Finance has administered them.
In particular, the report does deal with—as I think you have outlined, Senator Brown—five areas in total. It was a comprehensive examination of five specific entitlements. They looked at office consumables, paper and toner. They looked at newspaper and periodicals. They looked at the communication allowance. They looked at the printing entitlement. And, of course, they looked at car transport. The audit focussed, though, on the use of printing entitlements by 144 members and senators from three states, primarily in the months leading up to, and during, the 2007 election.
As I indicated, the government have accepted all of the recommendations of the Auditor-General. Today I have also announced a package of reform measures to address those recommendations. We also indicate that there will be a two-step process. The first is the package I will shortly outline and the second is a review of the entitlements. That review of the entitlements will be undertaken by an independent panel. I will deal with the reforms first. We know from the Auditor-General’s report that this framework is complex and overdue for reform. We know that the Auditor-General suggested a review of the system in 2001. We also know that there was no reform of the entitlements in the intervening eight years. As a consequence, there is a loud and clear call for reform and the Rudd government will answer.
Of the reforms I have announced today, the first and most immediate change will be an immediate cut to the printing entitlement of 25 per cent, reducing the total amount from $100,000 to $75,000. That will mean a reduction of the entitlement by half since the Rudd government came to office. In addition, the rules for how to access the entitlements will be changed. Access will be strictly limited to parliamentary or electorate business. For the first time, we will put in the regulations a clear definition of ‘electioneering’. This will specifically prevent the use of the entitlement for the production of party-political or electioneering material, including such things as how-to-votes and party-political flyers. The second area I announce a change in will be the previously unlimited expenditure on office consumables like toner, paper and stationery. Expenditure will be capped and indexed to $35,000 per annum. This will ensure that the use of that entitlement in election years does not, as it has in the past, spike around election periods and that there will not be a shift from the printing entitlement to office consumables.
Members will be required to authorise all printing of material. The authorisation will be in the form of a clear written statement in the material, with a standard 10-point font informing constituents that the material has been printed at Australian government expense and which member has produced it. The taxpayer will be able to understand who has printed the material, as it will be printed clearly on the pamphlet. It will be only about parliamentary or election business. The printing entitlement-communication allowance will also be combined—and this is effectively an overdue reform—so that there will be one entitlement. They have been in the past—and I think the ANAO highlights this—overlapping. The entitlement framework will be clearer, more transparent and more streamlined. In addition, the role of Finance in administering the entitlement will be dramatically strengthened. There will be more rigorous checking at the front end, where the entitlement will be checked before it is accessed by parliamentarians. There will be more rigorous checking before and after—that is, when the entitlement is being accessed by members and senators—to ensure that the material printed is within entitlement. At the back end there will be a more rigorous checking system when invoices for printing are presented and paid for.
To ensure that the printing providers themselves have reasonable access, there will be multiuser lists available. Those will ensure that people in regional and remote areas can have the printer provider and not be disadvantaged, but the multiuser list will ensure that the taxpayer gets value for money. The purpose of establishing a multiuser list is to support the local printing business. The current newspaper and periodical allowance will also be reformed to ensure that it is only used for parliamentary or official business and that the titles purchased, with the allowance and the costs, will be publicly reported. It will be about ensuring openness and transparency in the entitlement. As soon as practicable, we will drive a more open and transparent system so that the Department of Finance and Deregulation can place that material on the web, to use the general term. It will ensure that people will be able to understand what we have accessed, what amount we have spent and what we have spent it on. It will also mean the taxpayer and the general public will be able to understand the entitlement.
I indicated at the outset that there is a second part, which is the wider reform. A panel will consist of four distinguished public servants. I am sure this chamber would be aware of Barbara Belcher, a former First Assistant Secretary of the Department of the Prime Minister and Cabinet. Also on the panel will be Mr John Conde AO, President of the Remuneration Tribunal; Ms Jan Mason, General Manager, Corporate and Parliamentary Services, Department of Finance and Deregulation; and Professor Allan Fels AO, former ACCC Chairman and now Dean of the Australia and New Zealand School of Government. The panel will provide a report to government within six months of commencement. The report and recommendations of the panel will be reported publicly and will be considered by the government as a basis for a second-stage reform of the entitlements system.
The Auditor-General’s report sheds light on a system that is in bad need of repair. Entitlements, as we know, are ill defined, vague and difficult for Finance to administer. The parliamentary entitlements system has developed in an ad hoc way over many years. We know from the ANAO report, in looking at parliamentary entitlements, particularly the printing allowance, that parliamentarians have acted on the advice of the previous government. This advice by the ANAO has now been called into question by subsequent legal advice obtained in the course of the audit. I think the ANAO report makes that plain. This has left many politicians who have acted in accordance with the Howard government’s advice at the time at some risk of being found to have their entitlements outside of the framework. There is ambiguity within the framework itself, and that is why the Rudd government is moving to put in place clear rules and greater transparency. (Time expired)
This report is timely. It is important that it not be ignored, as Senator Bob Brown has indicated. It is an indictment of the system that is currently in place. It indicates that there needs to be substantial and significant reform. There must be a complete overhaul of printing allowances and, if we do not do so, we further jeopardise our reputations in the community as politicians. No wonder there is cynicism about politicians when this sort of material indicates that the system is not working in the public interest.
The Auditor-General’s report No. 3 2009-10 Performance audit: administration of parliamentarians’ entitlements by the Department of Finance and Deregulation is quite revealing. A sample of printed materials from 144 members of parliament reveals that 74 per cent of items were at varying risk of being outside of entitlements and, further, that successive governments have encouraged the department of finance not to sight or check any printed materials. So there has not been enough oversight. There has not been a system in place to ensure that money is being spent on the purpose for which it is meant to be spent. Further to that, there is real concern that the framework has significant shortcomings. This is not a reflection on the Department of Finance and Deregulation. I think they do a very good job but the framework, the guidelines, are simply not there for the department to be able to ensure that politicians are accountable for their expenses.
Given that the Auditor-General has indicated that there ought to be a framework with overarching principles, I think that must be put in place sooner rather than later so that the printing entitlement is not rorted. There needs to be a framework that guides parliamentarians on their entitlements to ensure that they fall within the guidelines. I believe there ought to be sanctions if we fall outside those guidelines. There also needs to be formal arrangements in a mandatory sense for all of us to ensure that entitlements have been used for the purposes certified. There needs to be greater transparency in relation to the reporting on entitlements and done in way that is more publicly accessible. I think the best way of doing that is to put it on the internet.
I am pleased to see that the Special Minister of State is committed to reform in this area. That is welcome. Taxpayers are fed up with this allowance being used in such a partisan way. The fact that public funding or taxpayers’ money for this allowance was being used for how-to-vote cards is, I think, beyond belief. How can that be seen to be part of what a printing allowance ought reasonably to be about? That is clearly party political. Also, there ought to be rules in place so that newsletters or material from members of parliament paid for by the printing allowance are not distributed or disseminated once the writs are issued. Once the writs are issued for an election, clearly anything that goes out of an MP’s office is party political in the context of the use of a printing allowance. These are important reforms that must be implemented. If we do not do so, I think it will diminish all of us in terms of the system that we have in place.
I checked with my office today about my printing allowance. I used $1,305 in the last 12 months for letterheads, business cards and ‘with compliments’ slips. I am obviously not a very good politician, because I did not put out any newsletters in the last 12 months. It is quite legitimate for MPs to put out newsletters but I would see an allowance that goes beyond $10,000 or $15,000 per annum as being very much party political in nature. It gives a benefit to incumbents whether they are a member of a political party or they are an Independent. I do not think it is healthy in a democracy to have an in-built advantage for incumbents to use public money in this way. So I look forward to working with the government and the opposition on this issue. Senator Ronaldson, as the shadow special minister of state, has a particular interest in it. I think there is real scope for us to clean this up and to do so in a way that will enhance public confidence in the system of entitlements, and that will be a good thing for all of us.
I, on behalf of the opposition, say that we support the recommendations of the Auditor-General report No. 3 2009-10 Performance audit: administration of parliamentarians’ entitlements by the Department of Finance and Deregulation and we also support the matters raised by the Special Minister of State to address them to date. We need to go back and explain why we support these recommendations. There has been a clear lack of clarity about these entitlements from the time of the Keating government, which introduced the newsletter allowance, to that of the Howard government and then through the first 20-odd months of the Rudd government. The ANAO has indicated that there needs to be clarity and a lack of ambiguity to address this situation.
I note with some interest that in about 2003 all political parties, including the Australian Democrats at that stage, the Labor Party, the National Party and the Liberal Party, were operating off the back of a number of conventions. The parties followed them because of a lack of clarity. The conventions came out of a Senate estimates hearings with Senators Robert Ray and Faulkner in 2001. Parliamentarians have been acting off the back of those conventions up until today. I am sure that all my colleagues on both sides in the other place and in the Senate would appreciate some clarity. In relation to the 42 points, it is useful to refer to page 28 of the summary to the ANAO report, where it says:
However, if the components of the 42 Questions and Answers document were read separately by Parliamentarians and relied upon, as we now understand has occurred, then the number of printed items that would fall outside of this guidance would represent a very small proportion of the items sampled by the ANAO.
Parliamentarians on both sides have been relying on those conventions. I am pleased that after the Keating, Howard and Rudd governments at least there will be some clarity now where there was a lack of clarity. The opposition looks forward to working with the Special Minister of State, Senator Ludwig, regarding this inquiry and the implementation of the matters that he has announced this afternoon. We believe, as the government does, that that clarity is extremely important. We are pleased that the ANAO has identified that lack of clarity and given some indication about what may be the move forward.
I note that back in 2001 when the ANAO looked at this they did not make recommendations themselves relating to further clarity. The Remuneration Tribunal has in the past chosen not to put in any clarity. In some respects I think it has a lot do with the need for a judicial interpretation of these definitions and everyone has been operating in a vacuum now for a decade and a half. Hopefully, on the back of the ANAO report, we will see that clarity take the ambiguity out of the interpretation and we can move forward; and the community can look at what we are doing with some confidence and say that there are appropriate processes being followed and that individual members and senators are following those processes.
But again I say that we were operating on the back the 42-point convention, which was driven by a lack of clarity and at least provided some indication for members and senators as to what was or was not appropriate. I acknowledge that the ANAO has said that those conventions may well have been outside their interpretation of the guidelines. I accept that and I accept their recommendations. The Special Minister of State will have the opposition’s full support in ensuring that the ambiguity and lack of clarity in this matter is addressed.
Question agreed to.
Before I move onto the next item of business I need to clarify something from the earlier debate on a matter of public importance. I understand Senator Heffernan sought leave to table a document and has since been granted leave.