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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2010-07-22 Daily Xml
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LOCAL GOVERNMENT (AUDITOR-GENERAL) AMENDMENT BILL

Introduction and First Reading

The Hon. R.B. SUCH (Fisher) (10:32): 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) (10:32): I move:

That this bill be now read a second time.

Some members would recall that I have tried to bring about this legislative change previously, although the newer members would not. I think it is a very important part of what should be the government's approach, given that it has said it does not want an ICAC and it does not want ICAC house. It would be a very important element in an alternative arrangement. It allows the Auditor-General—who, currently, as we know, has oversight of the financial matters of government agencies—to have oversight of the financial affairs of councils.

It does not mean that the Auditor-General would directly audit the books of councils—that could still be done by private contractors: there is no reason why that could not be done by local audit companies or professional groups and, in fact, I think that would be a very sensible thing to do. What it would do is enable people to compare the financial performance of councils, which is very difficult at the moment; but, importantly, it would pick up early any sign or indication of inappropriate behaviour because this measure would apply to council businesses as well as the council activities themselves.

The Economic and Finance Committee has looked at this issue and I believe it has been supportive of a measure similar to this. I will quote from the Auditor-General's Report of 30 June 2006. He said:

There is a need for the responsible minister and/or parliament to have, on an annual basis, a positive, comprehensive, independent audit assurance concerning not only matters relating to the financial statements but also the adequacy of the controls and general governance issues associated with local government administrative arrangements, i.e. propriety and lawfulness considerations.

He goes on to state:

There are, in my opinion, sound reasons to suggest that this assurance should be comparable to that applicable to state government departments.

Further, he states:

In short, the audit of local government should include, in my opinion, a provision similar to section 36(1)(a)(iii) of the Public Finance and Audit Act 1987.

Finally, he says:

In my opinion, the auditor of local government should be provided with adequate powers to require accurate and timely information to be provided.

That was contained in the Auditor-General's Report for the year ended 30 June 2006.

In talking with the auditor-general who was in that position until recently, he said to me that he could not investigate local government, and that is reinforced in those comments. I am not suggesting local government is inherently bad, corrupt or evil—I am not suggesting that at all. Most of what happens in local government is excellent and done in the way it should be, and I say that as a former member of Mitcham council many years ago.

However, many councils run businesses, and I do know that in years gone by some of them have not done the right thing. I know, for example, that the Centennial Park Cemetery Trust (which is now run very efficiently and effectively by Bryan Elliott) many years ago (and it was hidden) did things that were quite inappropriate—for example, giving imported European cars to people and living a fairly extravagant lifestyle, with crayfish suppers being brought up on the catafalque. There were all sorts of things such as people tripping around the world looking at how you bury people in ice and snow which, as far as I know, rarely occurs here. That behaviour was never uncovered. It took about 10 years to get hold of the private audit report, but the Auditor-General could not look at that affair.

When I was on the Mitcham council, the outgoing town clerk was given a Holden Berlina as a going away present, and that was suppressed under staff matters. That is not the totality of what has gone on, but they are just minor examples, in a way, of what can go on if you do not have a proper oversight by someone such as the Auditor-General. When we talk about corruption that can occur, I do not believe South Australia is prone to it, but it is more likely to occur where you have developers dealing with council staff; it is probably more likely to happen there than anywhere else.

I think this is a reasonable, sensible, sound measure. I do not believe it will cost councils any more because they are already paying for a private audit. The Auditor-General could commission those people to do the same sort of work on a standardised reporting format. Even though the audit is meant to conform to the Australian auditing standard—and I am sure it does—I challenge anyone here to look at the various statements and financial reports of councils and compare one with the other, let alone try to ascertain whether there is anything happening that should not be happening.

I commend this bill to the house. I think it is fairly obvious upon reading it what it is seeking to do. It is a reasonable, legitimate measure and I ask members to support it.

Debate adjourned on motion of Mrs Geraghty.

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