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House of Assembly - Fifty-First Parliament, Second Session (51-2)
2007-10-25 Daily Xml
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PUBLIC ACCOUNTS COMMITTEE

Mr O'BRIEN (Napier) (15:38): In March this year, the Legislative Council took upon itself the role of providing to the parliament of South Australia a de facto public accounts committee called the Budget and Finance Committee. The role of this new committee is like duly constituted public accounts committees elsewhere in Australia: to monitor and scrutinise all matters relating to the state budget and the financial administration of the state. Members may be aware that South Australia is the only parliament in Australia (and probably one of the few in the western world) that does not have a public accounts committee.

The South Australian Public Accounts Committee, with all its highly focused powers of investigation over budgetary and public administration matters and close working relationship with the Auditor-General, was replaced with the more generalist Economic and Finance Committee in 1991. With the loss of our own PAC, all we were left with were estimates committees that examine forward spending but no truly dedicated parliamentary instrument for checking on the performance of previous budgets—all foresight and no hindsight.

My view, informed by a brief study of public sector finance at Harvard University, is that a public accounts committee function is essential for oversight by the legislature over the executive. The decision of an earlier parliament to dissolve the PAC and create a generalist economics and finance committee was, I believe, an extremely poor decision, predicated on less than full knowledge of public sector finance and the proper role of PACs. As they say, nature abhors a vacuum. In the absence of a public accounts committee, the Legislative Council has taken upon itself the role of providing a de facto PAC.

The action of the Legislative Council in setting up its Budget and Finance Committee is, in my opinion, a clear breach of the South Australian Constitution Act 1934, which clearly prohibits the Legislative Council any role in a money bill. Section 61 provides that money bills shall only originate in the House of Assembly, and section 62 provides that the Legislative Council cannot amend any money clause. Now, section 62(2) allows the council to make suggestions but, under subsection (4), they have to be in erased type, meaning that any suggestions they make have no import whatsoever.

These provisions of the South Australian constitution are a clear reflection of an earlier informal agreement between both houses of parliament, known as the South Australian Compact of 1857. This is the reason why members of the Legislative Council do not serve on estimates committees. They are clearly prohibited from an oversight role in the financial management of the state of South Australia. It is a restriction that was at first a voluntary compact between 1857 and 1913 and, from 1913, a feature of the state's constitution.

Should the assembly assert its control over money matters by making some challenge to the legitimacy of the Legislative Council's Budget and Finance Committee? Probably not. This is an area of contention between the houses, best addressed by simply re-establishing the constitutional role of the House of Assembly through the reformation of the public accounts committee.

If what I have said about the House of Assembly's sole constitutional responsibility for public finance sounds a little esoteric and, hence, of little consequence, I would like to direct members to the observation made by the State Editor of The Advertiser, Greg Kelton. In The Advertiser of 13 October he wrote:

Time will tell whether Budget and Finance provides good value but it appears to be going from strength to strength and could eventually replace the economics and finance committees as the most influential.

Usurped by a committee with no constitutional legitimacy.

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