LOCAL GOVERNMENT (AUDITOR-GENERAL) AMENDMENT BILL

Introduction and First Reading

The Hon. R.B. SUCH (Fisher) (11:19): Obtained leave and introduced a bill for an act to amend the Local Government Act 1999. Read a first time.

Second Reading

The Hon. R.B. SUCH (Fisher) (11:19): I move:

That this bill be now read a second time.

This is also a reintroduction of a bill that was put to the parliament on 31 May 2007. It simply provides for the Auditor-General to have oversight of the finances of local government and their business enterprises. It does not mean that the Auditor-General has to do the detailed auditing. That would normally be done by contract. There is no reason why the Auditor-General could not or would not use the existing contractors that the councils employ.

Contrary to what some people may have thought, that it will add to the cost of councils, it should not add anything in terms of cost because they would use existing auditors, but what they would do is produce their report in a format which met the requirement of the Auditor-General. So, it would be standardised across all councils. I am not suggesting that the current auditing is not in accord with Australian accounting standards, but what is happening is that it is not easy to compare one council with another and it is not possible, at the moment, for the Auditor-General to become aware of practices which may be inappropriate.

As I said, the bill allows for the Auditor-General to look at enterprises of councils and, once again, essentially, that would be contracted out. Within the LGA (Local Government Association) and amongst councils, obviously there are differing views about how to deal with the issue of inappropriate financial management and, at the most extreme end, corruption. I should say that, from my observation and experience, our councils are generally fine in the way they operate. Their staff and the elected members are dedicated—

Mrs Redmond interjecting:

The Hon. R.B. SUCH: The member for Heysen says, 'Am I suggesting there is no corruption?' I do not know. It would be silly to say that there is no corruption because, at the moment, it is not necessarily easy to detect. It can occur because of a misuse and an overuse of the suppression powers that councils have. Some councils have a reputation for secrecy. I think I have said in this place before that, in my own experience, councils have given away cars and suppressed it under confidential staff items. Whether you call that corruption or misuse of funds, I guess, we are playing with words.

The point is, at the moment, the Auditor-General cannot determine and therefore the parliament cannot easily determine whether or not the finances of a council are being inappropriately used. This bill would enable the parliament, through the Economic and Finance Committee, to look at matters arising from those audits. Obviously, that means that members of parliament could question the minister responsible for local government relations. I am aware that the LGA is proposing a governance committee to deal with issues of possible corruption and inappropriate administration. I do not agree with that; I do not think that will achieve anything: it is just another bureaucratic structure.

Let us have a simple arrangement where the Auditor-General, like he or she does in some other states, has general oversight, contracts out the auditing. It is done on the standardised format so that the business operations are also included. I think that should be part of a whole suite of measures to minimise corruption occurring in local government, and other things need to done as well which are not covered by this bill.

I think we need a revamp of the Police Complaints Authority. We need a revamp of other mechanisms and the creation of one (which I have argued before) where a QC from an independent bar can be engaged to investigate alleged corruption and so on. The Ombudsman has very significant powers, as I think we will find out when the Ombudsman reports shortly. The Ombudsman basically has the power of a royal commissioner. I think that what we need, as part of the total focus, if we do not have an ICAC, is the Auditor-General having the powers to investigate councils properly, thoroughly and in a cost-effective way.

Some councils, I think, feel that the Auditor-General might charge them an exorbitant fee. The fee structure can be determined by the government so that councils are not unfairly burdened. But I think my proposal, which I have been arguing for a long time, has merit, and I think it is in accordance with the views of people on the Economic and Finance Committee. I think the sooner we have this provision in place the better off we will all be. I think it also lifts a cloud from local government because they can say, 'With this provision we are in the same category as any other government agency and university and, therefore, are subject to the investigative powers of the Auditor-General.'

So, I commend this bill to the house. I think we should get it in place as soon as possible, and I think the LGA need not worry about setting up yet another committee. I think this bill will do the job.

Debate adjourned on motion of Ms Breuer.