FINANCIAL FRAMEWORK LEGISLATION AMENDMENT BILL 2008

I rise today to support the Financial Framework Legislation Amendment Bill 2008. This bill amends a number of acts, namely the Financial Management and Accountability Act, the Albury-Wodonga Development Act, the Public Service Act, the Reserve Bank Act and the Defence Home Ownership Assistance Scheme Act 2008. The amendments in the bill will provide clarification of the operation of the law in the area of public financial management as well as correcting typographical errors and providing consistency in a range of areas.

I rise today to support the Financial Framework Legislation Amendment Bill 2008. This bill amends a number of acts, namely the Financial Management and Accountability Act, the Albury-Wodonga Development Act, the Public Service Act, the Reserve Bank Act and the Defence Home Ownership Assistance Scheme Act 2008. The amendments in the bill will provide clarification of the operation of the law in the area of public financial management as well as correcting typographical errors and providing consistency in a range of areas.

Good governance practices are essential for the operation of our democracy. We heard precious little about that from the member for Dickson when he was speaking a moment ago, but it is something on which the Rudd Labor government places great importance. I have spoken previously about the need for government administration reform that is aimed at achieving consistency, transparency, accountability and the reduction of red tape. When I spoke earlier this year on the Commonwealth Authorities and Companies Amendment Bill, which forms a pair with this bill, I spoke on exactly those same themes, and today I want to speak about a number of the particular provisions of this bill that help advance those aims of consistency, transparency and accountability.

It would be funny, if it was not so tragic, to hear the suggestion from the member for Dickson that those of us on this side of the House have no experience of small business. Sitting next to me is a fellow legal practitioner who has run his own small business for some 21 years. Perhaps the member for Dickson had not noticed, but I was self-employed before coming into this place; I ran my own business for some 22 years. I venture to suggest that there is a great deal more knowledge of small business presently on this side of the House—certainly represented by the member for Blair and myself, to speak of but two—than perhaps anything the member for Dickson personally knows about small business.

As for the fake concern about the rights of workers, one is tempted to ask where the member for Dickson was when the Work Choices legislation was being put through this place. Where was the member for Dickson standing up for the rights of workers, as he now professes to be doing while in fact expressing this fake concern about the conditions in Australian workplaces? Where was he when the Howard government put through its Work Choices legislation, representing as it did an immense and unprecedented attack on workplace conditions in this country? As for the suggestion that anyone on this side of the House needs to apologise to Australian business, that apology needs to come to Australian business from the other side of the House for the things that they did in government to directly damage the economy of this country. But I should return to the bill.

The Financial Management and Accountability Act and the Commonwealth Authorities and Companies Act provide the framework for managing the Commonwealth’s finances. The amendments proposed in this bill provide clarification about the use of finance minister’s orders and financial management and accountability regulations, and I will start with that particular aspect of the bill. Items 17, 26, 45, and 57 of schedule 1 amend sections 10, 13, 40, 60(2)(a) and 60(2)(b) of the Financial Management and Accountability Act by replacing references to the ‘Finance Minister’s Orders’ with references to ‘regulations’. These amendments clarify the operation of finance minister’s orders, which are documents that form quite an important part of the financial administration of this country. The finance minister’s orders are described in this way in the department’s description of them:

The FMOs are produced each year and have the force of law under the Financial Management and Accountability Act 1997 (FMA Act) and the Commonwealth Authorities and Companies Act 1997 (CAC Act). The FMOs outline the requirements for the preparation of Financial Reports of Australian Government Entities. One of the main purposes of the FMOs and supporting Policies and Guidance is to ensure consistency of accounting policy choices across Government Entities where Australian Accounting Standards allow choices. Consistency is important to ensure comparability of Financial Reports across Entities and to facilitate the consolidation of individual Entity Financial Reports when preparing the Australian Government’s Consolidated Financial Statements. The FMOs aim to enhance the usefulness of information presented in Financial Reports to Government and major external users.

It is the case that at present there are two sets of finance minister’s orders. Both are made under section 63(1) of the Financial Management and Accountability Act but they can deal with any matter on which the financial management act ‘requires or permits Finance Minister’s Orders to be made’ and any matter ‘on which regulations may be made.’ The difficulty with that is that the same subject matter can be the subject of both finance minister’s orders and regulations, which, of course, results in possible discrepancy and confusion for those agencies that are required to comply with the financial framework.

The purpose of these proposed amendments is that matters will be either the subject of regulations or, in the case of matters that relate to an agency’s financial statements and financial reporting, they will be the subject of finance minister’s orders. It is precisely the kind of clarification, elimination of duplication and simplicity that ought to be the object of all legislation in this place and certainly is a priority of the Rudd government. These particular changes are going to help to provide consistency across government in terms of accounting policy choices. The Department of Finance and Deregulation has actually pointed out that consistency is important to ensure comparability of financial reports across entities.

There are many other changes that are contained in this bill. Items 28 and 29 amend section 16(1) of the Financial Management and Accountability Act to clarify that the Legislative Instruments Act applies to special instructions issued by the finance minister. Perhaps I should say, more generally, that although this bill is primarily technical it is in line with the broader objectives of the Rudd Labor government to foster open government.

I should mention the provisions of this bill which tidy up the situation in respect of the Albury-Wodonga Development Corporation. At present, the Commonwealth Authorities and Companies Act does not apply to the Albury-Wodonga Development Corporation and there is what I think is fair to describe as a great deal of messiness in respect of who the responsible minister for the Albury-Wodonga Development Corporation is. At present, the finance minister is the minister responsible but, as at 30 June 2007, the responsibility had been, under the former government, with the Parliamentary Secretary to the Minister of Finance and Administration, who at the time was Senator the Hon. Richard Colbeck. The fact that the responsible minister may not necessarily be the finance minister is reflected in the use of distinct terms of ‘minister’ and ‘finance minister’ in the Albury-Wodonga Development Act, and that, of course, is a degree of unnecessary complexity.

The main effect of the repeal of the provisions that are listed in items 1 to 14 of schedule 1 of the bill will be to apply the Commonwealth Authorities and Companies Act to, in future, the Albury-Wodonga Development Corporation. That is appropriate because the Commonwealth Authorities and Companies Act deals with matters relating to Commonwealth authorities, including reporting and accountability, banking and investment, and the conduct of officers. Notably, part 3 of the Commonwealth Authorities and Companies Act deals with reporting and other obligations for Commonwealth authorities. The Albury-Wodonga Development Corporation, because it meets the definition of a Commonwealth authority as that definition appears in the Commonwealth Authorities and Companies Act—because it holds money on its own account and is a body corporate that is incorporated for a public purpose by an act, namely the Albury-Wodonga Development Act—is certainly an appropriate body to be brought within the overall framework of reporting and accountability that is constituted by the Commonwealth Authorities and Companies Act.

More generally, although this bill is properly described as primarily technical, I can say that it is completely in line with the broader objectives of the Rudd government to foster open government. This government has a clear agenda of accountability and integrity in government. The parliament has already seen this through changes to public sector administration; through announced changes to electoral laws and to freedom of information laws; and through the inquiry that the Standing Committee on Legal and Constitutional Affairs, which I chair, is presently conducting into a scheme of whistleblower protection for the Australian public sector. All of these are areas of improvement which will help to restore confidence in the integrity of our political system.

Specifically, I should mention the freedom of information changes that Senator Faulkner, Cabinet Secretary, has recently announced in relation to the freedom of information laws, which will indeed be the most significant overhaul of the Freedom of Information Act in its more than 25 years of existence. Specifically, the government has moved to abolish the power of ministers and agencies to issue conclusive certificates under the FOI Act, and Senator Faulkner has announced the creation of the position of Freedom of Information Commissioner to be a statutory office holder. This is legislation that we would hope to see shortly.

As I mentioned a moment ago, the Attorney-General has requested the House of Representatives Standing Committee on Legal and Constitutional Affairs to inquire into and report on a preferred model for legislation to protect public interest disclosures or ‘whistleblowing’ within the Australian public sector. It seems self-evident that more effective and comprehensive protection for whistleblowers will increase the likelihood of public interest disclosures being made, which will, in turn, improve the quality of government in this country. In developing a preferred model of legislation on this subject of public interest disclosure, the outcome of the inquiry presently being conducted by the standing committee will deliver on the government’s commitment, prior to the last election, to provide best-practice legislation to encourage and protect public interest disclosures.

I should perhaps mention also a couple of other provisions in the bill. There are some very welcome provisions in it which will simplify language that is contained in the legislation. Too often we see legislation that is written in a way that loses clarity for the sake of some imagined precision. In areas of the law that are technically complex, it is sometimes inevitable that the language will be technical and complex. Nevertheless, there should be at all times an attempt made to ensure readability—an attempt made to ensure that laypeople, when they come to read the legislation, will have some possibility of understanding it. We see an example of an attempt being made to use simpler language to express complex areas of regulation in the offering of a replacement for section 44(2) of the Financial Management and Accountability Act, which reads like this:

If compliance with the requirements of the regulations, Finance Minister’s Orders, Special Instructions or any other law would hinder or prevent the proper use of those resources, the Chief Executive must manage so as to promote proper use of those resources to the greatest extent practicable while complying with those requirements.

That is to be replaced, as proposed in this bill, with a much simpler and much shorter wording, which I will read:

In doing so, the Chief Executive must comply with this Act, the regulations, Finance Minister’s Orders, Special Instructions and any other law.

It is a much simpler way of expressing an almost identical requirement. The drafters of this legislation are to be commended for making the attempt and it is to be hoped that that indeed continues.

Finally, I should mention the provision of this bill which uses the Criminal Code. One of the purposes of establishing a Criminal Code for the Commonwealth was to ensure that there would not be duplication throughout the Commonwealth statute book of provisions which touched on criminal law, which created criminal offences or which described the way in which criminal offences are to be prosecuted. This proposed legislation continues that approach of adopting, where possible, provisions of the Criminal Code, maximising the usefulness of the Criminal Code so that, where one is needing to look at anything with a criminal concern, one goes first to the Criminal Code. That is why we see in item 16 of this proposed legislation a repeal of section 7 of the Financial Management and Accountability Act, which states that chapter 2 of the Criminal Code, the provision that sets out the general principles of criminal responsibility, applies to all offences against the financial management act and deals with maximum penalties. Section 7 is no longer needed because subsection 2.22 of the Criminal Code already provides that, subject to provisions of the code dealing with something not relevant in this context—self-induced intoxication—the code ‘applies on and after 15 December 2001 to all other offences.’ We see here a cleaning up of the statute book by making sure that that Criminal Code general provision will have application. I commend the bill to the House.