Bills

Public Finance and Audit (Treasurer's Instructions) Amendment Bill

Committee Stage

In committee.

Clause 1.

Mr VAN HOLST PELLEKAAN: I will start with some general remarks. Regarding the term 'a chose in action', which I was not familiar with and nobody else in the chamber was familiar with at the time, I thank the Serjeant-at-Arms for his quick work in clarifying that via the internet.

The CHAIR: Can you let the house know what the result was?

Mr VAN HOLST PELLEKAAN: It had to do with property rights.

Clause passed.

Clauses 2 to 4 passed.

Clause 5.

Mr VAN HOLST PELLEKAAN: Treasurer, I understand what you were saying, and we in the opposition fully support the principles and the intent. This is, hopefully, something that can be sorted out just by clarification. With reference to your second reading explanation—and I will go back to the bit that you read just a minute ago because it was quite useful—you said:

The main purpose of the Bill is to make it clear that a general provision in an Act establishing a public authority, such as a power to enter contracts…will not override a requirement of Treasurer's instructions applying to the public authority.

We got that clearly. Then in clause 5, the amendment to section 41, new subsection (6) provides:

Treasurer's Instructions are to be interpreted as being consistent with an Act conferring functions or powers on a public authority if it is possible for the public authority to comply with both…

New subsection (7) says something very similar:

…if an Act confers on a public authority power to enter a contract or manage or apply a fund…the authority must, in exercising the power, comply with Treasurer's instructions—

unless it is not possible to do both. My question, Treasurer, concerns the comment in the second reading speech that the main purpose of a bill will not override Treasurer's Instructions, but what I thought you said in your comments just very recently was that parliament is supreme and that where there is a conflict the responsibilities and obligations of a public authority under their own act would take precedence over the Treasurer's Instructions. The bit I read out of the second reading speech seems to be different from or opposite to those last words I just used, so I am just looking for that to be clarified.

The Hon. A. KOUTSANTONIS: First of all, welcome to the midwives' association. Midwives were fantastic with my little girl when she was born prematurely and did a wonderful job. They gave me very strict instructions—and I never disobeyed a midwife's order.

Mr van Holst Pellekaan interjecting:

The Hon. A. KOUTSANTONIS: Absolutely, yes. I will give you an example: let's say that the Treasurer and the mining minister have a conflict.

An honourable member: Never!

The Hon. A. KOUTSANTONIS: True. The mining minister—a very good mining minister indeed, minister Koutsantonis—wants to change the royalty rates. Treasurer Koutsantonis says, 'Hang on a second, that will have a budget impact. You must follow Treasurer's Instructions about anything that has a budget impact.' The mining minister then says, 'Under the act, I have authority to change royalties without reference to anyone else. The parliament has given me the right to set those royalty rates.'

I, as Treasurer, cannot override an act of parliament with a Treasurer's Instruction, but I hope that the mining minister would say, 'As a guiding principle, the Treasurer's Instructions are there in place to maintain the integrity of the budget and to maintain integrity of spending.' I will have to follow a process as set out by the Treasurer's Instructions but, ultimately, I have that authority under the act.

Mr van Holst Pellekaan: The authority not to follow the Treasurer's Instructions?

The Hon. A. KOUTSANTONIS: No, I have the authority to set my own royalty rates, but that does not mean I do not have to follow Treasurer's Instructions. If I want to go through every single act where there is a very specific delegation or authority given to an individual minister, a Treasurer's Instruction cannot override it because a Treasurer's Instruction is made up by me, crown law and the department sitting together and writing it out without reference to the parliament. The parliament has specifically given an authority to an administering authority. You cannot change that outside of parliament and nor should you be able to. That is the process.

Other than the Treasurer having very stern words with the mining minister about attempting to impact his budget, what I would say should happen is that the mining minister would say, 'Yes, the act does give me the authority to set royalties, to give royalty deferrals, to give royalty exemptions and to change the royalty rate; however, Treasurer's Instruction X says this, and I should go back to cabinet and have a discussion about it.' That is the conflict you are talking about with very specific examples within the act.

I hope that clarifies it for you because what I do not think we have time to do is go through and amend every single act by taking the authority out of every single act. There may be very good reasons why some acts have given specific expenditure authority to a certain person for a specific reason. As with any system, you need goodwill. You have the Treasurer's Instructions, you have the legislative authority and, hopefully, the two can work together. Nothing is going to stop someone being bloody-minded but, if you have a system, this is the best way to try to minimise any impact.

Mr VAN HOLST PELLEKAAN: So it is about really trying to establish a guiding principle that Treasurer's Instructions should be followed. I wholeheartedly accept that it is not practical to go through every act and try to deal with every potential possibility. I also accept that, typically under any government, you would expect the Treasurer and the relevant ministers, even if they were not the same person, to be working hand in hand through that cabinet process. Just for clarity, if by chance the principle were rejected by the minister, and if by chance there were some difficulty, would it be the act that took precedence?

The Hon. A. KOUTSANTONIS: Yes, the act does take precedence, I am advised.

Mr PEDERICK: Treasurer, part of the discussion around this bill was around the legal interpretation around an act that the WorkCover board was going to take. Given your latest explanation, does that mean that perhaps this does not fully encompass the issue that was trying to be encompassed in regard to getting people to comply with Treasurer's Instructions with these amendments?

The Hon. A. KOUTSANTONIS: There is a general provision within the WorkCover act to allow the board to enter into contracts: that general provision remains. This puts alongside it Treasurer's Instructions which they must take into account by notifying the Treasurer or the cabinet through a cabinet process seeking expenditure authority. It does not remove their ability to enter into contracts: it just gives them a staged process. We do not remove the general provision.

Does that mean that the WorkCover board can enter into a contract for $5 billion and then levy everyone across the state to pay it? No; that is not the parliament's intent. The parliament's intent is to allow the board to do its day-to-day running without us being there. What this does is lays alongside it a series of instructions that need to be followed, I am advised, that will give them clarity about that process. It does not stop them entering into contracts. It just says, 'You must now inform the cabinet and seek expenditure authority.'

Then if there is a problem in between, the cabinet can express its view to the board and, if need be, there are processes in place to either assist or stop that, I would imagine. That is what we are attempting to do. It is just basically to give greater control back to the elected government about expenditure authority which, I have to say, is one of the things the opposition is always banging on about with the government. They say, 'You set a budget and you exceeded that spending.' What we are attempting to do with these Treasurer's Instructions is to try to minimise that event occurring, unless it is a decision the cabinet has deliberately taken.

Mr PEDERICK: I appreciate the explanation. I could be extremely wrong but, given the previous explanation, would it still be possible for WorkCover to exceed their budget even if it is only by a small amount? Could they perhaps put in some purchase orders (or whatever they are spending on) and disregard the Treasurer's Instructions because of these clauses that talk about 'unless it is not possible' to abide by the Treasurer's Instructions?

The Hon. A. KOUTSANTONIS: I am advised that the contracts we are talking about here are over $11 million so, absolutely, they still could. They are a corporation. They are corporatised, so they are entitled to run their business. What I am saying is, I would like to know about some of the large contracts they are entering into.

There is no use getting a dog and barking yourself, is there? You have the WorkCover board: let them do their jobs and we will set the legislative framework. All I am saying is, 'I want to know what you are spending money on over a certain amount and, if you spend over a certain amount, this is the process I would like you to follow.' In the end, the board is corporatised. Yes, they can exceed their budgets. I hope they do not, and the government has recourse if they do.

Clause passed.

Schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. A. KOUTSANTONIS (West Torrens—Treasurer, Minister for Finance, Minister for State Development, Minister for Mineral Resources and Energy, Minister for Small Business) (12:54): I move:

That this bill be now read a third time.

Bill read a third time and passed.

Sitting suspended from 12:55 to 14:00.