Senate debates

Tuesday, 5 July 2011


Public Accounts and Audit Committee; Report

6:00 pm

Photo of Helen PolleyHelen Polley (Tasmania, Australian Labor Party) Share this | | Hansard source

On behalf of the Joint Committee of Public Accounts and Audit, I present two reports of the committee as listed at item 12 on today's Order of Business: Report 423:review of Auditor-General's Reports Nos 39 (2009-10) to 15 (2010-11) and Report 424:eighth biannual hearing with the Commissioner of Taxation. I seek leave to move a motion in relation to the reports.

Leave granted.

I move:

That the Senate take note of the reports.

I seek leave to incorporate tabling statements in Hansard.

Leave granted.

The statements read as follows—


Mr President, on behalf of the Joint Committee of Public Accounts and Audit, I present the Committee’s Report 423: Review of Auditor-General’s Reports Nos 39 (2009-10) to 15 (2010-11).

The Joint Committee of Public Accounts and Audit, as prescribed by its Act, examines all reports of the Auditor-General, and reports the results of the Committee’s deliberations to the Parliament.

This report details the findings of the Committee’s examination of five performance audits selected for further scrutiny from the twenty-six audit reports presented to the Parliament between May and November 2010.

These reports cover a range of agencies and identify a number of areas for improvement in administration including:

the decision making processes regarding infrastructure projects;

the transparency and accessibility of regional grants administration;

the failure to achieve value for money in government procurement; and

poor governance arrangements for key stimulus climate change programs.

Firstly, the Committee reviewed the conduct by Infrastructure Australia of the First National Infrastructure Audit and the development of the Infrastructure Priority List. We were particularly concerned about the lack of transparency regarding decisions made by Infrastructure Australia. The ANAO found that published methodologies were not followed in determining the priorities list and that Infrastructure Australia did not provide clear advice on the factors influencing key decisions. While we note that Infrastructure Australia is not formally obligated to document the reasons for the Council’s decisions, in the interests of transparency we urge the agency to improve its processes in this area. We also support the ANAO recommendation that better advice is needed in the future and recommend that Infrastructure Australia provide clear, consistent advice on both the level of funding and funding conditions for priority projects.

Secondly, we were also concerned at the lack of documentation when we examined the administration of the Strategic Projects Component of the Regional and Local Community Infrastructure Program. In this instance, we would like to register our dissatisfaction with the Department of Regional Australia, Regional Development and Local Government’s failure to provide clear, published assessment criteria for the program. This disregard for basic grants administration practice led to a series of problems and, as a result, the Minister did not receive clear recommendations regarding the eligibility or otherwise of applications from the Department. However, we also note that under the financial framework requirements, ministers are expected to obtain agency advice on the merits of each proposed grant before making decisions. This suggests that the Minister should have taken the initiative to secure such advice. As a consequence of the lack of documentation in this case, there is no way for the Parliament or the public to be sure that due process has been followed. While we accept the Department’s assurance that it has implemented relevant processes and practices to address the ANAO’s concerns, we will expect to see concrete evidence of improved performance in the future.

With regard to grants programs, we recognise that some local government authorities lack access to the necessary expertise to help them comply with stringent application requirements. Consequently, we support any attempts to provide them with the assistance they need. This must include the provision of adequate feedback to unsuccessful applicants. Overall, we reiterate our ongoing concern with the recurring difficulties identified by the ANAO in grants administration both within this Department and across the Australian Public Service.

Thirdly, and another long term concern of this and previous Committees, is the lack of evidence that value for money is being achieved in Commonwealth procurement. Our review of direct source procurement only served to reinforce these concerns. Again, lack of documentation poses problems, making it difficult to determine if value for money has been achieved. We found that there is a level of confusion over the Commonwealth Procurement Guidelines. We expect clearer, more concise Guidelines as a result of the current review and a greater understanding and application of these guidelines as a consequence of these changes and our review.

We have made a number of recommendations aimed at assisting departments to streamline processes and encourage competency in this area. These include actively promoting the use of Central Procurement Units, investigating the viability of whole-of-government procurement tools and examining the feasibility of regular, mandatory testing to ensure the competency of financial delegates.

Finally, we turned our attention to the Green Loans and Home Insulation programs. We recognised that both of these programs have been the subject of a number of reviews and consequently, we saw our primary role as identifying the lessons learnt from the implementation and delivery of both programs. We were particularly concerned by the inadequacy of governance arrangements and the quality of advice provided to ministers. We acknowledge the difficulties caused by tight implementation timeframes but this does not excuse the lack of executive oversight or the underestimation of key program risks.

The issues identified in this selection of audits provide a number of areas for reflection for APS agency executives and responsible ministers. Those areas include the need for:

higher quality advice by departments;

increased documentation to provide transparency and accountability;

better grants management;

improved culture, capacity and supporting tools to ensure value for money in procurement; and

adequate governance mechanisms for critical implementation programs.

We emphasise the importance of applying this knowledge across the APS and encourage all departments and agencies to ensure that a structured approach is taken to implement change and facilitate ongoing effective service delivery across the APS.

In the 43rd Parliament, it is important to emphasise the bi-partisan conclusions drawn from a Committee involving ALP, Liberal and Independent Members of Parliament. I sincerely thank each Committee member for the non-partisan spirit in which work has been done on these inquiries to date, and the focus on better public administration for Australians.

I also thank the Joint Committee of Public Accounts and Audit Secretariat for their on-going diligent and professional work, too much of which goes unnoticed too often.

Mr President, I commend the Report to the House.


Mr President, on behalf of the Joint Committee of Public Accounts and Audit, I present the Committee’s Report 424: Eighth biannual hearing with the Commissioner of Taxation.

This is the first report into the biannual hearings with the Commissioner of Taxation from the Joint Committee of Public Accounts and Audit. The hearings are the result of a recommendation made by the Committee in Report 410: Tax Administration and the rationale for the hearings was to provide a mechanism whereby dialogue between the Australian Taxation Office and the Parliament could be promoted.

Traditionally, the hearings have provided an opportunity for Members of the Committee to scrutinise issues surrounding tax administration. While there have been public hearings with the Commissioner of Taxation since 2007, previously no reports have been tabled. The Committee in the 43rd Parliament is seeking to expand the Parliament’s role with regards to the scrutiny of the ATO. Therefore, in a bi-partisan way, the Committee determined to prepare a report on the biannual hearing to increase scrutiny of the ATO and transparency to the public.

Integrity in tax administration is a critical foundation block of the Australian taxation system. Whilst evidence suggests in the majority of cases this is done well, the Committee is concerned about the increasing number of complaints about the ATO.

In keeping with the goal of increasing scrutiny of the ATO, the Committee will be enlarging future biannual hearings to include public evidence from external scrutiny bodies such as the Ombudsman, the Australian National Audit Office and the Inspector General of Taxation as well as peak industry and consumer bodies. Each of these integrity bodies has expertise upon which the Committee can draw when reviewing the operations of the ATO.

In addition to greater scrutiny of the ATO, the Committee also anticipates that one of its key responsibilities will be monitoring proposed changes to the taxation system and working to ensure that the ATO is sufficiently supported and positioned to implement any proposed changes.

In this report the Committee has made a number of recommendations that are aimed at ensuring the ATO provides the Committee with sufficient and timely advice prior to the next biannual hearing to facilitate improved scrutiny, and ultimately lead to better results. These include recommendations that the ATO provide the Committee with a submission prior to the next biannual hearing that details the number of and reasons for complaints, the activities the ATO is undertaking to ensure compliance with Australian taxation requirements, the input of the ATO into policy implementation and its responses to external scrutiny reports and recommendations.

The Committee looks forward to working with the ATO to build and foster community confidence in the integrity of the Australian tax system. The Committee intends this report to open a dialogue with the ATO and to create a foundation upon which future hearings will build. We look forward to continuing and further cultivating a productive relationship with the ATO, one which encourages and promotes scrutiny and transparency and increases confidence in the ATO’s work.

In conclusion, I would like to thank Committee colleagues for their work on this inquiry, and the hard working diligent secretariat of the Joint Committee of Public Accounts and Audits for their on-going work. I also thank representatives of the ATO who made themselves available to attend the hearing and look forward to a positive response from them to greater interest and oversight from the 43rd Parliament.

Mr President, I commend the Report to the House.

Question agreed to.