Appropriation (1997-98 Budget Variations) Bill (No 2); Public Finance and Audit Amendment (State Accounts) Bill

About this Item
SpeakersPhillips Mr Ronald; Brogden Mr John; Oakeshott Mr Robert; Macdonald Dr Peter; Windsor Mr Antony; Knight Mr Michael
BusinessBill, Division, Second Reading, In Committee, Amendment, Third Reading

Second Reading

Debate resumed from 14 October.

Mr PHILLIPS (Miranda - Deputy Leader of the Opposition) [10.07 a.m.]: The objects of this legislation are to appropriate additional amounts totalling $85,032,000 from the Consolidated Fund in adjustment of the vote "Advance to Treasurer" 1997-98 for supplementary charges made during the 1997-98 year for the ordinary annual services of the Government; to confirm the validity of certain payments of the kind referred to in section 28 of the Appropriation Act 1997 and section 24 of the Public Finance and Audit Act 1983; and to validate the financial reporting of certain authorities.

This bill retrospectively makes legal unlawful expenditure undertaken by the Government. It retrospectively allocates another $85 million to balance this Government’s books, the budget of the 1997-98 financial year. The Treasurer in another place said that this legislation rectifies a technical breach. This is no mere technical breach. As will be demonstrated in this debate, breaches such as this are serious breaches of the Constitution of this State. They are not innocent oversights but deliberate actions. The Government has chosen to thumb its nose at proper financial accountability to the people
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of New South Wales. For those reasons the coalition has today referred these charges to the Director of Public Prosecutions for investigation and action.

It is the coalition’s view that Ministers and senior public servants who have blatantly and repeatedly breached the Constitution Act and the Public Finance and Audit Act should be prosecuted or at least fined the $2,200 per breach as set out in the original Act. The Premier, Bob Carr, and his Ministers should be expected to face the same legal consequences for their actions as any other citizen of this State. It would seem appropriate to include in this debate quotes made by the then Opposition finance spokesman, the current Treasurer. He said:
      The Opposition will not support the retrospective aspects of the proposed amendments to the Public Finance and Audit Act, introduced into this Parliament.

He said also:
      The Government is making a mockery of the law.

The then Opposition finance spokesman further said:
      What other citizen could expect the Parliament to pass retrospective legislation to clear a breach of the law?

He said also:
      How can they expect people to obey the law when the Government itself blatantly ignores it?

The above statements were made in response to the amendments sought to the Public Finance and Audit Act by the then Treasurer, simply because the Treasurer was late in submitting the 1993 public accounts to the Auditor-General. Yet at that time the then Opposition finance spokesman, the current Treasurer, believed there should be no retrospectivity, that there should be no pardon, and that the then Treasurer should be prosecuted for a late report. As I said, the position then taken by the current Treasurer related to a minor breach of a time provision. Let us compare the Treasurer’s stand at that time with the stand taken with regard to the legislation before the House today, which is the responsibility of the same stickler for adherence to the strict provisions of the law relating to financial accountability in New South Wales.

The difference is that Michael Egan is now not in opposition; he is the Treasurer. He carries the full responsibility for ensuring compliance with the Constitution Act, compliance with the wishes of this Parliament, and compliance with the Public Finance and Audit Act. The breaches that the Government is today trying to retrospectively authorise relate to more than $3.2 billion in payments made unlawfully from the Consolidated Fund. It involves not one Minister, not two Ministers, but 18 Ministers, including the Premier. It involves breaches of not only the Public Finance and Audit Act but also the very heart of this State’s democratic system of government: the Constitution Act.

These breaches are a direct attack on the budgetary processes that protect the citizens of this State. They challenge the fundamental basis of the relationship between the government of the day and this Parliament. The issue involves the Parliament’s role in maintaining proper scrutiny over the Government’s expenditure. As all members of this House will be aware, it is this Parliament, through the Appropriation Act mechanism, which allocates moneys to be spent on government programs as detailed in the budget estimates. The Government and its Ministers do not authorise those payments. This Parliament has a responsibility to the people to approve not only the Government’s budget but also how it spends the money.

The State’s budgetary processes contain sufficient flexibility to allow for unforeseen expenditure oversights. These unforeseen expenditure oversights or changes can be authorised through legislation or through the Treasurer’s approval. No-one has problems with that process in principle. They are covered by provisions that have stood the test of time and protected the interests of the people of New South Wales. However, as exemplified by the bill before the House, the current practice of retrospectively validating payments that have been made already is a flagrant abuse of what Parliament envisaged its requirements for scrutiny to be. More importantly, the bill seeks to validate the illegal actions of 18 Ministers and senior public sector executives of 69 government departments for their deliberate breaches of the Act. It is not as though those breaches were just an oversight; the Auditor-General has warned about the breaches year after year.

The Government has been deliberately avoiding the scrutiny of this Parliament. Indeed, this has become one of the trademarks of the Carr Government. It is no coincidence that in another place the Treasurer is currently obstructing the will of the Legislative Council by his refusal to table documents in relation to the Sydney water crisis. This follows his refusal to table documents relating to budget cuts to the Department of Agriculture and the Department of Education and Training, and documents relating to the approval for the Sydney Showground redevelopment. The Treasurer’s continued failure to allow parliamentary scrutiny of
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government documents has resulted in the matter now going before the High Court of Australia and the Treasurer being once again suspended from the Legislative Council for five days for deliberately not following the will of the Parliament.

The actions of the Treasurer, those Ministers and the Government are in stark contrast to the actions of the previous coalition Government, which tabled in this Chamber, in accordance with the standing orders, extensive documents in relation to the M2 Motorway. There is a pattern in the arrogant behaviour of the Treasurer and his utter contempt for the Parliament and its right to expose the Government to scrutiny. He is prepared to condone $3.2 billion of alterations to the parliamentary-approved budget program without the appropriate approvals, without following the process. That is financial incompetence; it is finances out of control. At the beginning of a financial year the Parliament ticks off the budget, every department and every Minister.

The people of New South Wales then know how their money is being raised and expended. However, the Government then allows its departments to do what they like. The Government has spent $3.2 billion unlawfully. It has moved large sums of money from one department to another; it has moved sums of money from capital works to services. It has underspent on some programs that this Parliament felt were important, and it has spent money on other programs that this Parliament did not approve. What is the point of a budget coming before Parliament if this sort of financial irresponsibility is allowed to continue? This is not a minor breach of the Constitution Act and the Public Finance and Audit Act. It is a grave mistake to dismiss these criminal actions as mere technical breaches of some obscure financial Acts.

If we do, where does the abuse of executive power end? Where will the relevance of the Parliament in the budget approval process end up? Where will executive power end and where will the relevance of this Parliament end? As a fundamental plank of the Westminster system of government, these budgetary procedures have been honed and developed to protect the trust and confidence that the community can have in a government. The safeguards are not intended to obstruct the Government in its day-to-day business but to ensure discipline and accountability in the expenditure of taxpayers' money.

Is it any wonder that, after almost four years of warnings, the Auditor-General is so alarmed at the Government’s actions that he has decided to withhold his approval of its accounts? Let no-one misunderstand the seriousness of his decision. To the best of my knowledge - the coalition has researched this matter - this is the first time that an Auditor-General in this State has qualified annual reports for breaches relating to unauthorised expenditure. Can honourable members imagine the outcry from shareholders and the community if BHP or a major bank qualified their accounts because of unlawful actions? Criminal charges would be laid against the chairman or members of the board.

Mr Brogden: And rightly so.

Mr PHILLIPS: And rightly so, as the honourable member for Pittwater said. The chairman and the members of the board would be charged. They would lose their jobs because they would be voted out by the shareholders. The State Government, which is worth some $25 billion, has been entrusted with the power to raise money from the community and to spend it, year after year. However, in spite of warnings from the Auditor-General, it has blatantly and repeatedly breached the Constitution Act and the Public Finance and Audit Act. Are those Acts meaningless? The Government and the Ministers stand condemned for bringing into this Parliament retrospective legislation to exonerate them from any prosecutions. The Opposition will not support the legislation; it will fight it all the way.

For almost four years the Carr Government has repeatedly and blatantly breached the Constitution Act and the Public Finance and Audit Act. The coalition will not support any legislation that seeks to retrospectively protect an individual from facing the legal consequences of his or her actions. For this reason the coalition will not support the effect of the amendments of this bill, which retrospectively exonerate the Premier and 17 of his Ministers from breaches of the Constitution Act and the Public Finance and Audit Act, breaches which the Government readily admits it has committed. The Government has Crown Solicitor’s advice which confirms that such legislation is not available to ordinary citizens. Why should it be available to the Premier and his incompetent Ministers?

This is one instance of the Government not being allowed to use its numbers to circumvent the legal consequences of its actions. The Public Finance and Audit Act and the Constitution Act provide penalties of up to $2,200 per breach; these are serious criminal matters. Today I have written to the Director of Public Prosecutions asking him to investigate whether criminal charges should be initiated. The coalition understands the constitutional constraints on blocking supply or refusing passage
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of an appropriation bill. Accordingly, the coalition will not oppose the substantive clauses of the bill which authorise the appropriations.

However, the coalition will move an amendment in Committee to ensure that the Ministers and the public servants involved are not permitted to walk away from the criminal liability that they have incurred. The amendments will circumvent clause 9 of the bill, which attempts to validate the liability of officers and Ministers. One can understand that on occasions when running a large organisation breaches of Acts occur due to oversight with no ill intent and with no prior knowledge, and they are corrected. However, these breaches of the Acts are deliberate and repeated - or a range of departments and Ministers are out of control with their spending. I believe it is the former: deliberate and repeated breaches of the Act. The Auditor-General has finally taken a stand and has made it clear that he will not approve the annual reports of 69 departments until this matter is rectified.

The Auditor-General has repeatedly warned the Government in his annual reports to Parliament: in 1995 in volume 1, pages 21 to 27; in 1995 in volume 3, page 87; in 1996 in volume 3, pages 281 to 283; and in 1997 in volume 1, pages 57 to 59. The Auditor-General kept warning the Government that it was in breach of proper financial controls, the Constitution Act and the will of this Parliament. In spite of those warnings, the Government has continued to do as it pleases as an Executive Government, against the wishes of this Parliament, the Constitution Act and the Public Finance and Audit Act. The Opposition will move amendments to clause 9 of the bill in Committee.

Mr BROGDEN (Pittwater) [10.27 a.m.]: This is Khemlani-like legislation. It has been put forward by a government that has been forced to reveal its appalling lack of financial management - which it sought to hide - to the people of New South Wales. As the shadow treasurer said, the Treasurer has been brought to heel by an independent authority of this State - the Auditor-General - and has been forced to come clean on a massive cover-up of government finances. For instance, the bill highlights that government departments have been forced to dip into the Treasurer’s advance. The Legislature, a department under the responsibility of Mr Speaker, has dipped into the Treasurer’s advance to the tune of $1.3 million, including $230,000 for catering services.

Mr Knight: You had better declare an interest.

Mr BROGDEN: We should all declare an interest. I understand that today the Premier will use the catering services of this building for a media announcement. It will be interesting to see whether the Premier will attack the Parliament and you, Mr Speaker, for your administration of the catering services in an attempt to hide yet another one of the Government’s areas of gross financial mismanagement. In the Premier’s portfolio, $1.45 million of the Treasurer’s advance was spent on the Office of Information Technology. In the Attorney General’s portfolio, information and management services have been forced to dip into the Treasurer’s advance to the tune of $12.5 million. Therefore, almost $14 million of extra expenditure has been incurred in the area of information technology.

The tragedy of the bill is that it highlights the Government’s poor management and planning in essential areas such as information technology. New South Wales should take the lead in this area, but it is lagging behind, as demonstrated by investment in other States, particularly Victoria. The bill raises other areas of concern. An advance of $672,000 has been made to the Casino Control Authority. Why, in such an essential area of government administration, is the Casino Control Authority forced to dip into an advance to the tune of $672,000? What is going wrong? Where is the management of these departments and the financial control by the Treasury? They are non-existent.

The culture within this Government is such that if a department runs out of money it approaches Michael Egan, who gives it the money. He sorts out the problems later by introducing legislation to appropriate an additional $85,032,000 to cover a massive hole in government expenditure across all portfolios. The amount of $260,000 has been advanced to the Waterways Authority for marine safety and environment, despite the Government’s recent announcement that fees for boat owners will be increased. Within the Treasurer’s portfolio, the Office of State Revenue will receive an advance of $295,000 to assist in collection of land tax.

I am sure my colleague the shadow treasurer will agree that in about six months the coalition will be able to assist the Office of State Revenue in its collection of land tax by removing its collection on family homes. We hope that that $295,000 will be returned to Treasury. Extra expenditure to assist tax collection in the form of land taxes is targeted at those who own family homes. It is tragic that this bill is before the Parliament today. Its proportions are frightening. The bill will put the last nail in the coffin of any attempt by the Government in almost four years to present itself as financially responsible.

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In the first year of the Carr Government the strings of the Government - policy, finances and administration - were well and truly controlled by the Treasurer. But because of the political problems caused by his budget in the first year, caucus and the ministry chose to take from him the opportunity to control his budget. They decided to take control of it and to well and truly start pork-barrelling. That decision is reflected in a bill that reveals a black hole of $85 million in the Treasurer’s portfolio alone. The greatest concern about the legislation was voiced by the Minister when he said in his second reading speech:
      Notwithstanding these measures taken by the Government, the Auditor-General notified the Government that he intended to qualify the 1997-98 financial statements of 69 agencies and the State public accounts because of breaches of the statutory provisions. The primary cause of the breaches is the timing of necessary approvals. As a consequence, payments of $85.032 million charged against the Treasurer’s advance, capital payments of $17.820 million approved by the Treasurer on the basis of offsetting savings under other programs, transfer of $3,126 million approved under section 24 of the Public Finance and Audit Act, and various interprogram transfers effected by agencies are technically invalid and the expenditure involved not properly authorised.

In any other organisation one would be gaoled for such behaviour, but in the Labor Party one is promoted. The Government has flagrantly broken the law and the Auditor-General has come down on it like a ton of bricks. It is frightening that the Government believes it can wander in here with a guilty confession and a small note of apology to the people of New South Wales for its massive financial mismanagement and overexpenditure of budgets. The Government’s answer is to fix it up afterwards.

It is interesting that the Minister for the Olympics is at the table representing the Treasurer. One can only wonder what the International Olympic Committee and the other organisations dealing with Australia and New South Wales think of this legislation. How could they deal with us responsibly and seek to deal with the Sydney Organising Committee for the Olympic Games responsibly when in other areas the Government looks after its finances by cleaning up the mess afterwards? What a mess it is! The mess involves all portfolios and demonstrates a frightening level of mismanagement by Ministers, their chief executive officers, departments and agencies across the board.

The culture of the Government is quite clear: do not worry, spend the money; we will look after it afterwards. That approach would chill a responsible individual to the core. In recent years Australia has undergone a revolution in government accountability. Such a revolution was forced upon some governments and accepted by others. It came from the grassroots of our communities. That necessary revolution will assist in the long term to restore public confidence in public institutions, such as the Parliament. But what confidence can the public have in this Parliament or in this Government when the Minister and the Treasurer in the other place ask us to clean up a financial mess of the proportions indicated in the bill?

It is frightening that the Government is asking me, as a member of Parliament, to approve the cover-up indicated in the bill. We discussed in our party room whether we should support the Government in this sort of behaviour. Why should we support a government that so outrageously seeks to cook the books of the State’s finances that the Auditor-General - who, I hasten to add, is no friend of any government - has sought to qualify the accounts of 69 agencies and the State public accounts because of breaches of statutory provisions? The legislation indicates a collapse in the Government’s attempt to offer itself as any sort of financial manager. I do not know who is running the Government.

Mr Oakeshott: The far right.

Mr BROGDEN: I do not know whether it is being run from the top down or the bottom up. However it is being run, it is being run into the ground with a loose and fast Treasury policy. It is being run from the far right, although any attempts the Treasurer may have made to run a tight budget seem to have been excluded. The budget is out of control. If the Government is willing to clean up such a mess after massive expenditure, what will happen in the next five or six months before the election, when it will seek to look after its marginal seats - seats it will target to win the election - other black holes in the budget, and the black holes that continue to surface in the Olympics budget?

How desperate will the Government be to continue to fund its political aims at the real expense of the budget of New South Wales, the financial viability of New South Wales and the financial viability of the citizenry of New South Wales. If, God forbid, this Government is successful in six months, the real concern is that we will be asked to deal with similar legislation, which will make this bill seem like a walk in the park. If this legislation is a reflection of what the Government has done to its budget six months shy of an election, I shudder to think what it will do in the next six months to buy the votes of the people of New South Wales. One must wonder about its standards, when it introduces legislation that uncovers such massive financial mismanagement.

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Frankly, I am reluctant to support the legislation. As the shadow treasurer said, the coalition supports this legislation with reservations in the knowledge that it is in the best interests of the good running of the State to keep the dollars flowing and the government departments working. However, let the Government be fully aware that when it loses the next election and when the new Treasurer is handed the accounts on the following Monday he will be looking for more great cover-ups, and he will find them.

Mr Phillips: We will be prosecuting them.

Mr BROGDEN: As the shadow treasurer said, we will prosecute the Ministers responsible for cover-ups. When the coalition wins government there is no way it will wear the blame for this Government’s financial mismanagement. We will be stringent in ensuring that the people know, today and after the next election, how this Government operates: it runs finances into the ground and throws money back and forth between government departments as if it were Monopoly money. The coalition is confident that with this sort of legislation the Government’s financial credentials are destroyed, the Treasurer will be the joke of all Treasurers in this country and the Government will be defeated because of its financial mismanagement.

Mr OAKESHOTT (Port Macquarie) [10.41 a.m.]: In my short time in this place I have never seen legislation that puts up the guilty sign on economic mismanagement as much as the Appropriation (1997-98 Budget Variations) Bill (No 2) does. Nothing irks the community more than knowing there is one rule for some and another rule for others. The Government should live by the law, and when it breaks the law it should be punished. The broader community would regard the Government’s argument that this is a technical breach of the law as extraordinary. A person driving a car could not say, "I was speeding, but it was only a technical offence," and a bank robber could not say, "I wandered in and accidentally robbed the bank, but it was only a technical breach." In this State there is one set of laws, and the Government must abide by those laws - after all, it established them. The objects of this bill are:
      (a) to appropriate additional amounts totalling $85,032,000 from the Consolidated Fund in adjustment of the vote "Advance to Treasurer", 1997-98 for supplementary charges made during the year 1997-98 for the ordinary annual services of the Government, and
      (b) to confirm the validity of certain payments of the kind referred to in section 28 of the Appropriation Act 1997 and section 24 of the Public Finance and Audit Act 1983, and
      (c) to validate the financial reporting of certain authorities.

In his second reading speech the Minister said that these are somewhat technical breaches. But why on earth has the Auditor-General withheld payment in relation to those so-called technical breaches? If they are technical breaches why has the Government done nothing about them? To protect Executive Government, Ministers and potential Ministers why has the Government not introduced guidelines or legislation to avoid being trapped by so-called technical breaches? The laws of this State should be abided by.

The Government’s only argument relates to accountability - even though it has been caught and is guilty of 69 breaches of the laws of this State. It offered the weak defence that even though it is not responsible, at least it is accountable. A bill as extraordinary as this deserves an extraordinary reaction. The Opposition would normally quote from sources other than government sources. However, in this case I am happy to quote from the Minister’s second reading speech. That speech damned the Government for its actions and exposed it as guilty of economic mismanagement. The Minister stated in his second reading speech:
      The Government has a strong commitment to accountability in financial management.

That is fine, but what about the key area of economics? What about responsibility in relation to financial management? It is clear that there is no responsibility in financial management of government expenditure. The Minister stated further:
      Under longstanding practice followed by successive governments . . . Treasury seeks to offset overexpenditures on programs against savings from underexpenditures on other programs.

That begs the question: if it is only technical in nature and has been a so-called longstanding practice, why has the Government not done something to address the problem of exposing Ministers to legal breaches? The Ministers have left themselves wide open and broken the law. When someone breaks the law they deserve to receive the full punishment. The Minister also stated:
      When reporting to Parliament in recent years the Auditor-General has drawn attention to the desirability of reducing the incidence of expenditures not properly authorised prior to 30 June.

That more than anything highlights the fact that the Government was forewarned by the Auditor-General about potential problems in regard to actions it decided to undertake this year, yet it decided to go
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ahead. Now it seems that the Government is wondering why the Auditor-General is withholding payment. The Government is in an extraordinary situation, and we will be asked to vote on extraordinary legislation about economic management. I am astounded that the broader community is screaming for accountability in government as well as value for money and responsibility in government.

In conclusion, the big guilt sign is posted on the State Government for its economic mismanagement. The bill highlights what the Government has done, not only this year but in its three years in government. It has known for some time that potential problems exist in regard to legalities and so-called technical breaches, yet it has left itself open to those technical breaches. The Government should be damned not only for its economic mismanagement but also for its role in management in not picking up this so-called technical breach. What will the Government say to the people when it has one rule for the broader community and another for itself?

Dr MACDONALD (Manly) [10.48 a.m.]: In opposing the bill I do not wish to partake in a point-scoring exercise between the two sides of Parliament, but to draw attention to the issues raised in the legislation and perhaps the opportunities that arise as a result. The Auditor-General has said that it was unlawful for departments to make payments from the Consolidated Fund without proper authorisation, and intends to issue qualifications on the financial statements of 69 budgets and dependent agencies. Indeed, the Government has breached section 45 of the Constitution Act 1902 and the Audit Act 1983.

It is worth mentioning the extent of these significant breaches: payments of $85 million charged against the Treasurer’s advance, capital payments of $17 million approved by the Treasurer on the basis of offsetting savings under other programs, and transfers of over $3 billion approved under section 24 of the Public Finance and Audit Act. This bill seeks to validate those authorisations. I wish to talk briefly and in general terms about the budgetary process. This is an opportunity for honourable members to try to come to grips with it. The budgetary process is shrouded in secrecy and has been for many years. Frankly, the role that we play in this Parliament in attempting to come to grips with the budget is totally meaningless.

All honourable members receive a number of printed documents. They then make 30-minute speeches in this House in the belief that they are making some sort of contribution. They are not. I have read in this House and I have circulated to all honourable members a discussion paper on a proposal to establish a parliamentary expenditure and revenue standing committee. I have asked all honourable members to give that matter further consideration. This legislation is about the Parliament versus the Executive; it is not about political parties. The Parliament must have a meaningful role. A core role of this Parliament is to ensure proper scrutiny of the Government’s expenditure.

At the moment that does not happen. It is impossible to get the necessary details in the budget documentation to establish whether the allocations are meeting policy objectives. Annual reports from various agencies are a total waste of time; they are merely glossy documents that justify certain expenditure. A voluntary research officer has been working in my office for some years trying to come to grips with this problem. We have concluded that the only way to deal with the budgetary process is to establish a standing committee which will enable the Parliament, in a bipartisan way, to keep Treasury and the Executive accountable. Such a committee would look at revenue opportunities and at expenditures to determine whether they can be justified, and would assist the government of the day in crafting the budget.

Governments have been doing that for years. Opposition members feign shock and horror and say, "Isn’t it awful; the world is about to end! This heinous Government has introduced legislation to make something lawful." I ask honourable members not to indulge in cheap political point scoring. This legislation highlights the fact that members of Parliament have been impotent in their endeavours to keep accountable members on the Treasury benches - whether they be Labor or Liberal. It is currently hard to do. It so happens that we have an independent and courageous Auditor-General who is not a mouthpiece of the Executive or the Government.

Much to the ire of all honourable members he has spoken out and disclosed the fact that there is a problem. He is no friend of either side of politics. The Auditor-General has said, "I am not prepared to sign off on this. I want to make qualifications to the audited statements." The Government has responded by introducing this legislation. Let us stand back and look at this legislation in the broader context of Parliament verses the Executive and the need to expand opportunities in the scrutiny of the budgetary process.

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Mr WINDSOR (Tamworth) [10.54 a.m.]: I speak briefly in debate on this legislation and reiterate to some extent what was said by the honourable member for Manly. Not many of us spend the time that we should spend each year in trying to analyse the appropriation bills and the budget papers. I am pleased that the Auditor-General has taken the time to review some of the transfers that have taken place and the inadequacies of the system that this legislation is picking up retrospectively. I and many other honourable members are concerned that this has been allowed to happen in the past - a matter identified in the Minister’s second reading speech. That is the reason for this legislation. It indicates some broader problems relating to the transparency of the budget papers.

Even though I am slightly outside the leave of the bill, this debate will enable some discussion about the transparency of the budget papers. I have been involved with a group of country people called Country Summit. That group has been attempting to analyse capital flows and determine where the State’s money is being spent, electorate by electorate and in specific portfolio areas. It is difficult to access that information in the public domain. It is difficult for me, as a member of Parliament, to painstakingly dig through documentation to obtain those figures. It took this group about four months to go through that process. I say to the Minister for the Olympics, who is representing the Treasurer, that those figures are freely available in Treasury’s computers.

We must have real transparency and be able to establish what the government of the day is doing, and in saying that I am not being critical of this Government or the previous Government. The Treasury computers that contain those figures are used to determine the capital works budgets and to summarise the figures contained in the budget papers. Information that is available in the inner sanctums of Treasury is not available to members of Parliament or the general public. Even though I am slightly outside the leave of this bill I made that statement to indicate the lack of transparency in the budgetary process.

I listened with interest to the comments made earlier by the shadow treasurer. Many discussions took place when the Deputy Leader of the Opposition was Minister for Health in the previous Government. It was estimated that the dismantling of the regional health structure would result in savings of about $40 million, which would be transferred to patient care, in particular in country areas. When I did some homework on that issue some time after the event it was difficult to determine whether that money had been transferred to patient care in particular in those areas. The demolition of the regional education structure is an example of the current Government making a promise which it has not fulfilled.

Mr Knight: You are a long way from the leave of the bill.

Mr WINDSOR: What I am referring to has a lot to do with the transparency of the budgetary process. The Premier and the Minister for Education and Training claimed that there would be savings for the Government of $17 million, and that the result would be a more efficient and leaner operation. No-one could argue against that logic. When the Auditor-General checked the records to determine whether the $17 million had been saved - the reason for the demolition, in the words of the Government - he established that that was not the case. In fact it cost money to determine that. That is another example of the Government’s lack of accountability and lack of transparency. The community wants to know whether the Government has kept its promises. This bill highlights the fact that there have been some real accountability problems in the budgetary process. I congratulate the Auditor-General and ask him to stick to his guns on this issue. At the end of the day we may end up with a much more definite process.

My electorate is currently considering establishing a helicopter rescue service. To do so it must access patient movement data in order to assess the real cost, not to the Government but to the community, so that it may determine the viability of establishing such a service. That information should be freely available to the community, and the Minister for Health is considering that matter. However, the information is not available from the department. Further, I raised the matter personally with Treasury, which advised that the figures are not available. Those are the underlying concerns that have led to the matters to be addressed by the bills, particularly the transfer of allocations between ministries. I ask the Minister to take on board those comments. I will be supporting the bills, but I express grave concern about the way in which the matter has arisen. I congratulate the Auditor-General on the role he played in identifying the problem.

Mr KNIGHT (Campbelltown - Minister for the Olympics) [11.00 a.m.], in reply: Let me put this matter into context. This debate, stripped of the point-scoring and political game playing of the Opposition, prompts me to make two fundamental
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points. The first issue before the House is the allocation of spending within portfolios and the transfer between portfolios of money that was appropriated by this Parliament. The Government has not spent in the last financial year one cent more than was appropriated by the Parliament.

Mr Phillips: Then why is the Parliament being asked to appropriate another $84 million?

Mr KNIGHT: The Deputy Leader of the Opposition was removed from the House last week for disorderly conduct, and he will be removed again if he does not behave himself. I repeat, the Government has not spent one cent more than was appropriated by the Parliament. There has been a longstanding arrangement, which goes back to the time when the coalition was in government, regarding re-allocations within portfolios and transfer of allocations between portfolios. The principle behind that longstanding arrangement is that money saved in one area could be spent in another. The Government has not been spending additional money.

In a few cases the paperwork was not processed in the required time, and that has caused a technical breach. We do not pretend that that is an ideal situation. But, put into context, it is a small technical breach. Indeed some argue it is not a breach of the law. To remove all doubt, this Government - unlike the previous coalition Government - has come back to ask the Parliament to pass legislation that will dot the i’s and cross the t’s. Let us make sure that the matter is beyond all doubt. That is not what the former coalition Government did. Anyone who delves into the record of previous coalition Treasurers will find that not only did they not come before the Parliament to dot the i’s and cross the t’s, but that the current Leader of the Opposition, when Treasurer, on two occasions actually appropriated more money than was permitted by the Parliament.

When the Leader of the Opposition was Treasurer he authorised, after the determination of appropriations for the 1993-94 budget, overspending of $377 million. I have copies of the documents that he signed. Similarly, in 1992-93 he authorised the spending of $74 million more than had been appropriated by the Parliament. So let us not have any of this hypocrisy from honourable members opposite. The bills before the House are to dot the i’s and cross the t’s. I will have something to say in Committee about the ludicrous proposal that will be moved as an amendment by the shadow minister for finance, because his amendment would only catch his own leader.

Motion agreed to.

Bills read a second time.
In Committee

The TEMPORARY CHAIRMAN (Mr Gaudry): Order! The committee will deal first with the Appropriation (1997-98 Budget Variations) Bill (No 2).

New clause 11

Mr PHILLIPS (Miranda - Deputy Leader of the Opposition) [11.16 a.m.]: I move:
      Page 4. Insert after line 19:
      11 Criminal liability
          Nothing in this Act affects criminal liability (if any) incurred before the commencement of this Act by a Minister, officer or other person under the Public Finance and Audit Act 1983 or any other law in respect of anything done or omitted to be done before that commencement.

It is one thing for a government to move in the Parliament for an appropriation of an additional $84 million, but I cannot understand the Minister saying, "This Government has not spent one cent more than was appropriated by the Parliament." If that is so, why is the Parliament being asked to appropriate another $84 million for the Minister’s portfolio? That is what this bill seeks. Time and again over the past three years the Auditor-General has expressed grave concern about the failure of the Government to take appropriate corrective action. In spite of the many warnings, the Government has continued, deliberately and repeatedly, to breach the Constitution Act and the Public Finance and Audit Act.

If this State is to have discipline of its senior public servants and Ministers, the public servants and Minister should not be precluded from criminal liability just because a breach can be corrected retrospectively. The purpose of the amendment is to ensure that, although this Parliament will give a retrospective tick to what has been done in the past, the bills will not preclude the possibility of criminal liability. Let the Government explain why and how this problem occurred. This could keep them on their toes in the future so that the problem will not recur.

Mr KNIGHT (Campbelltown - Minister for the Olympics) [11.07 a.m.]: This is a classic case of the Opposition wanting to have its cake and eat it too. Opposition members are indulging in political grandstanding in moving this amendment, for they are relying on the Government using its numbers in the Parliament to defeat the amendment. The Opposition knows that these sorts of technical breaches have occurred over a long period of time
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under governments of both political persuasions. Indeed, one of the worst offenders was the current Leader of the Opposition. However, unlike the Deputy Leader of the Opposition, I do not want to see the Leader of the Opposition prosecuted.

Question - That the amendment be agreed to - put.

The Committee divided.
Ayes, 43

Mr Armstrong Mr O’Doherty
Mr Beck Mr O’Farrell
Mr Blackmore Mr D. L. Page
Mr Brogden Mr Peacocke
Mr Chappell Mr Phillips
Mrs Chikarovski Mr Photios
Mr Cochran Mr Richardson
Mr Collins Mr Rixon
Mr Debnam Mr Rozzoli
Mr Ellis Mr Schipp
Ms Ficarra Ms Seaton
Mr Glachan Mrs Skinner
Mr Hartcher Mr Slack-Smith
Mr Hazzard Mr Small
Mr Jeffery Mr Souris
Dr Kernohan Mrs Stone
Mr Kerr Mr J. H. Turner
Mr MacCarthy Mr R. W. Turner
Dr Macdonald Mr Windsor
Mr Merton Tellers,
Ms Moore Mr Fraser
Mr Oakeshott Mr Smith
Noes, 47

Ms Allan Mr Markham
Mr Amery Mr Martin
Mr Anderson Ms Meagher
Ms Andrews Mr Mills
Mr Aquilina Mr Moss
Mrs Beamer Mr Murray
Mr Carr Mr Neilly
Mr Clough Ms Nori
Mr Crittenden Mr Price
Mr Debus Dr Refshauge
Mr Face Mr Rogan
Mr Gibson Mr Rumble
Mrs Grusovin Mr Scully
Mr Harrison Mr Shedden
Ms Harrison Mr Stewart
Mr Hunter Mr Sullivan
Mr Iemma Mr Tripodi
Mr Knight Mr Watkins
Mr Knowles Mr Whelan
Mr Langton Mr Woods
Mrs Lo Po’ Mr Yeadon
Mr Lynch Tellers,
Mr McBride Mr Beckroge
Mr McManus Mr Thompson

Mr Cruickshank Mr Nagle
Mr Tink Mr E. T. Page

Question so resolved in the negative.

Amendment negatived.

Bills reported from Committee without amendment and report adopted.
Third Reading

Mr KNIGHT (Campbelltown - Minister for the Olympics) [11.17 a.m.]: I move:
    That these bills be now read a third time.

Division called for. Standing Order 191 applied.
Noes, 2

Dr Macdonald
Ms Moore

Question so resolved in the affirmative.

Motion agreed to.

Bills read a third time.