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House of Assembly - Fifty-Fourth Parliament, First Session (54-1)
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Public Finance and Audit (Miscellaneous) Amendment Bill

Second Reading

The Hon. V.A. CHAPMAN (Bragg—Deputy Premier, Attorney-General) (11:56): I move:

That this bill be now read a second time.

This bill proposes to improve the timeliness and effectiveness of reporting by the Auditor-General and to simplify publication and administration. I place on the record my appreciation for the work of the Auditor-General and his office in service to this parliament and, of course, to ensure that we are kept informed as to his work and that of his office and, in addition to that, how we might improve his statute.

Currently, the Auditor-General's Report must be tabled on the next sitting day and then only after the report is tabled can it be published. The bill proposes to allow the Auditor-General to publish a report after it has been delivered to the President of the Legislative Council and the Speaker of the House of Assembly. If either the President of the Legislative Council or the Speaker of the House of Assembly is absent, the bill proposes to allow the Clerk of the relevant house to receive a report on behalf of the President or the Speaker, as the case may be.

I interrupt myself to say that I do not think I have actually specifically consulted with the Clerk about this onerous new responsibility that we are giving him or her in that position, but I am sure that they will welcome it.

The effect of this amendment is that the Auditor-General will be able to publish a report, regardless of whether or not the parliament is sitting. This addresses a key concern of the Auditor-General, documented in his annual report tabled in parliament on 17 October 2017. This bill follows a bill that covered similar matters in the Public Finance and Audit (Auditor-General's Reports) Amendment Bill 2017, which I introduced when in opposition and which sought to address the Auditor-General's concerns. That bill was not passed before the parliament was prorogued, more is the pity, but, nevertheless, we are back here to remedy that.

The bill also proposes a number of simplification measures and I will quickly outline those. The first measure will allow the Auditor-General to annex documents to its report, which will reduce the burden of publishing his annual report to parliament, which currently can be in excess of 3,000 pages. Under the proposed amendments, these annexures will be available to parliament on a website determined by the Auditor-General.

The second measure will require the Auditor-General to publish on a website audited financial statements of the public authorities and the financial statements of the administrative unit established to assist the Auditor-General. This is a significant accountability measure that ensures that all audited financial statements of public authority will, for the first time, be available on a website determined by the Auditor-General.

The third measure will allow the Treasurer to delegate his power under the Public Finance and Audit Act to open, close and maintain deposit, special deposit and imprest accounts. This administrative function is considered low risk and will enable more efficient administration to support machinery of government and other strategic decisions of government.

As a matter of housekeeping and at the request of the Auditor-General, the bill proposes to adopt terminology about audit that is consistent with current auditing standards in Australia and New Zealand. The term 'efficiency and economy' in the context of undertaking an audit has been redefined in auditing standards and other audit acts across Australia and New Zealand as 'efficiency, economy, and/or effectiveness'. This change has been included in the bill, noting that the 'and/or' device is not used in legislative drafting and that, in the context in which the phrase is used in this bill, the use of 'and' is sufficient.

In preparation of these proposed amendments, the government has consulted with the Auditor-General, who supports the amendments. The government considers that these proposed amendments will ensure that this government is transparent in its financial reporting and further provide the Auditor-General with the appropriate legislative framework to ensure timely and full disclosure of the results of their inquiries to the people of South Australia.

I seek the opposition's support for these amendments, which will ultimately improve the relevance of the Auditor-General's annual report to parliament and ensure that timely access to this information and agency financial statements is available to parliament and all South Australians. I am sure members would be aware that this is a bill which has already passed the Legislative Council, and we thank them for their consideration of the bill and passage of the same. I seek leave to have the explanation of clauses inserted without my reading it.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

3—Amendment provisions

These clauses are formal.

Part 2—Amendment of Public Finance and Audit Act 1987

4—Amendment of long title

This clause amends the long title to delete the phrase 'efficiency and economy' and instead refer to 'efficiency, economy and effectiveness'.

5—Amendment of section 8—Special deposit accounts

This clause amends section 8 so that the power of the Treasurer to establish and maintain a special deposit account, and the power to approve a purpose of, or relating to, a government department for the purposes of section 8, can be delegated by the Treasurer.

6—Amendment of section 9—Imprest accounts

This clause amends section 9 so that the power of the Treasurer to establish an imprest account can be delegated by the Treasurer.

7—Amendment of section 21—Deposits

Section 21 provides that money accepted by the Treasurer on deposit from a person must be recorded in a separate account maintained by the Treasurer. This clause amends the section to enable the Treasurer to delegate the power to establish and maintain accounts.

8—Amendment of section 31—Audit of public accounts etc

This clause amends section 31 to delete the phrase 'efficiency and economy' and instead refer to 'efficiency, economy and effectiveness'.

9—Amendment of section 32—Examination of publicly funded bodies and projects and local government indemnity schemes

This clause amends section 32 to delete the phrases 'efficiency and economy' and 'efficiency and cost-effectiveness' and instead refer to 'efficiency, economy and effectiveness'.

10—Amendment of section 33—Audit of other accounts

This clause amends section 33 to delete the phrase 'efficiency and economy' and instead refer to 'efficiency, economy and effectiveness'.

11—Amendment of section 36—Auditor-General's annual report

This clause allows the Auditor-General to annex documents to the annual report (including the documents that are currently provided to Parliament with the annual report) and to annex them by including a reference to a website on which they are, or are to be, published. The reference in subsection (3) to a single supplementary report is changed to allow for multiple other reports. The provision also allows for the Clerk of a House of Parliament to receive a report on behalf of the President or the Speaker (as the case may be).

12—Amendment of section 37—Recommendations by Auditor-General

This clause amends section 37 to delete the phrase 'efficiency and economy' and instead refer to 'efficiency, economy and effectiveness'.

13—Amendment of section 38—Reports and other documents to be tabled before Parliament and published

Section 38 is amended to make consequential amendments and to allow the Auditor-General to publish a report on a website, or in some other manner, once it has been delivered to the President of the Legislative Council and the Speaker of the House of Assembly under the Part. If, however, the day after delivery of the report is a Parliamentary sitting day, the Auditor-General must not publish it until the report has been laid before a House of the Parliament. The proposed amendments also require that the Auditor-General ensure that audited financial statements that were not annexed to the annual report are published as soon as reasonably practicable after the annual report has been laid before a House of the Parliament.

14—Insertion of section 42

Proposed section 42 applies where the Treasurer delegates a power under the Act. The delegation—

may be to a specified person or to a person occupying or acting in a specified position; and

must be in writing; and

may be absolute or conditional; and

does not derogate from the power of the Treasurer to act in a matter; and

is revocable at will by the Treasurer.

The ACTING SPEAKER (Mr Pederick): Member for Lee, I assume that you are the lead speaker.

Mr MULLIGHAN (Lee) (12:03): Yes, I am, Mr Acting Speaker. I thank the Attorney-General for her explanation of this bill. It is a relatively brief bill and seeks to do the four key things that she outlined. I will not repeat those in any great detail. The opposition supports this bill as, certainly, the Deputy Premier and Attorney-General would know from her time in this place, and as I have come to know, the annual Auditor-General's Report is a critical report for members of parliament, and in particular for the opposition, by which to hold the government of the day to account.

There have been many occasions in the relatively brief period over the last 15 or so years that I have been closely following proceedings in this place when the Auditor-General's work and his report have been of keen interest to members, particularly early in the life of the former Labor government in the portfolio that the Attorney-General now superintends, she might recall. It is an important document.

I thought I might flag some concerns with the bill, minor as they are. It will not change the opposition's support for it, but I want to place them on the record because, despite the consistency in the office of the Auditor-General, the audit work, the production of these reports and the furnishing of the reports to the parliament, over time there has been a gradual and subtle but important change to how the reports have been provided.

I have managed to find at quick notice parts of the Auditor-General's Report covering most of the last year of the former Liberal government and the similar documents for the year ending 30 June 2017. By holding them up, we get a pretty quick indication of why the Auditor-General and the Treasurer are seeking to make the change that will be the focus of my comments to this place, that is, the annexure of part of the reports, the financial statements and such related information.

Some 16 or so years ago when these reports were produced, an agency would have its audit commentary followed immediately by the financial statements, which were provided by the agency to the Auditor-General. It enabled a member of parliament, or indeed anybody else who managed to procure a copy of the report, the opportunity to see the audit commentary from the Auditor-General and make reference to those parts of the financial statements that the Auditor-General has highlighted or that may be of interest to them on an ongoing basis.

The Auditor-General's Report was usually tabled on a Tuesday. We would prepare for the Wednesday morning radio story from 6am about the number of employees remunerated at a level above $100,000 a year and the amounts spent on consultancies, contractors and so on. That detail, even looking at the most recent Auditor-General's Report for the Attorney-General's Department, is provided in the financial statements part of the report.

The Hon. V.A. Chapman: And overseas trips.

Mr MULLIGHAN: And overseas trips—always a topic of interest to this place, as I am reminded by the Deputy Premier. She has been of great assistance to me this morning.

The ACTING SPEAKER (Mr Pederick): We have been very collaborative in the parliament today.

Mr MULLIGHAN: I am pleased to advise the house that my staff have informed me that Fanta awaits me back in my office for the lunch break—thank you to the Deputy Premier. It is not just overseas travel, employee remuneration, consultancies and contracts but things like grants; receivables and doubtful debts; boards and committees, including which members are entitled to remuneration for their presence and work on those boards and committees; and, something I am sure is of topical interest in the Attorney-General's Department, trust accounts. This is the sort of information that perhaps may seem to a member of the public to be grotty, impenetrable detail within financial statements, but it is of keen interest to members of this place and members of the other place.

It is with some trepidation that the opposition supports the government's bill in amending this act because there are very worthy other parts of this bill. I take on their word those members of the Department of Treasury and Finance and the Treasurer's office who were good enough to spend some time with me walking me through the bill and the change to accounting standard definitions and why we should from time to time update the definition in the Public Finance and Audit Act and, hence, also give the Auditor-General the opportunity to perhaps change as far as necessary the scope of his work and also the more timely tabling of these reports. It is really the separation of those financial statements and the sort of detail that I made reference to therein which is of some concern to the opposition.

I will not take up much time in the committee stage of this bill, but I will put a couple of questions to the Deputy Premier about what the Auditor intends with that amendment to the Public Finance and Audit Act, what the experience will be, particularly for members of parliament, the President and the Speaker, and, indeed, how that might differ from other members of the public who would have an interest in accessing a copy of the report.

There was one other matter which I wanted to mention. I had sought some information from the Department of Treasury and Finance and the Treasurer's office, which I am still looking forward to receiving, about some general information about the number of special deposit accounts and imprest accounts held by the Treasurer. During the course of that discussion, for the benefit of the house, I did raise questions about whether there were any concerns about the delegation of the creation of those accounts and the separation of the creation of those accounts away from the Treasurer, as it has always been, because that provides a level of executive oversight which is important. Given that I have already mentioned things like trust accounts, I am sure the Deputy Premier could understand why the oversight of particular types of accounts at the executive level can be very important. I will leave my comments there, and I look forward to asking the Deputy Premier some questions in the committee stage of this bill.

Bill read a second time.

Committee Stage

In committee.

The ACTING CHAIR (Mr Pederick): We have 14 clauses. Where would you like to start, member for Lee?

Mr MULLIGHAN: I have already made reference to the information I sought about clause 5, about the number and type, and associated details, of special deposit accounts. I do not seek any further information on that.

Clauses 1 to 4 passed.

Clause 5.

Mr MULLIGHAN: Just to finish off that comment, for clauses 5 to 7 if the department or the Treasurer's office were able to provide the information as discussed, that would be terrific, but I certainly will not hold up the bill to any extent while I wait for that.

The Hon. V.A. CHAPMAN: I have been provided with some information which I think covers the matters which were sought. Firstly, in relation to how many special deposit accounts exist, as at 30 June 2017, Treasurer's Statements, Statement F, showed there were 117 special deposit accounts established under section 8 of the Public Finance and Audit Act 1987. They are on page 15—Treasurer's Statements, Statement F—of one of the many volumes that exist, as the member has pointed out. I love this section of the Auditor-General's Report because, along with the special deposit accounts, this is where all the money is hidden, in all these little funds that exist, and they keep accumulating.

There are a couple of funds I especially look at. One is the Victims of Crime Fund, which had well over $200 million in it at the time of the change of government. We have exercised taking a fair slice out for the Redress Scheme for those victims of child sexual abuse. The other one is the boat levy fund, which changes its name. It was the marine facilities fund, or something, at one stage, which I am sure the member would remember as minister. That seems to keep accumulating.

There is an open space public fund, which has all the developers' money in it. If they want to build apartments with no grounds, they commit funds to go into the public space fund. These funds are really important for all members to keep an eye on to make sure that they are accounted for, and that the details are listed in the Auditor-General's Report—the only time they are listed. They do not show up in all the detail or even as to how they are applied during the year in the budget papers, but they do turn up in the Auditor-General's Report. God bless him, he has them all there, and there are 117 of those.

In relation to the deposit accounts, as at 30 June to 2017 the Treasurer's Statement G shows there were 105 deposit accounts established under section 21 of the Public Finance and Audit Act 1987. That was at page 29. Deposits are lodged with the Treasurer. They cover everything from the money that the Adelaide and Mount Lofty Ranges Natural Resources Management Board have sitting there for them to apply and recover when they need it to the Museum Board Account and the like. In certain circumstances, money has to be held in these Treasury accounts. Treasury's careful husbandry looks after them, but they are able to be called upon by the relevant boards that operate those. So we have some interesting little moneys in there.

There is also the unclaimed salaries and wages account. We should check that to see if there are any little moneys that should be coming out of that. In any event, it is an important process and there is a level of accountability each year when we read the annual report. I trust that answers the member's question.

Mr MULLIGHAN: It does, and I thank the Deputy Premier for providing that detail to the house and for giving those examples. It may be worth having the Deputy Premier place on record, given the new dislocation that will be created between the Treasurer and the creation, if not the superintendence of these accounts, will there be any annual or periodical process by which the ruler will be run over the accounts to determine whether they are still required or whether their balances are appropriate and whether movements into and out of those accounts has been appropriate?

The ACTING CHAIR (Mr Pederick): This is just in relation to clause 5, member for Lee?

Mr MULLIGHAN: Yes, or perhaps five, six and seven.

The ACTING CHAIR (Mr Pederick): Deputy Premier, you could combine elements of five, six and seven.

The Hon. V.A. CHAPMAN: I am reliably informed that these special deposits and impressed accounts are continually audited, and that includes moneys in and out. Obviously, that is not just to ensure that they are applied to the relevant agency or expense but also that money is coming into them, is being placed in the right account and is the full amount required. Excellent work from the Auditor-General's office.

Mr MULLIGHAN: And the first two concerns I raised in my question were about periodic review as to the necessity of the existence of those accounts or the balance of those accounts.

The Hon. V.A. CHAPMAN: Yes, my understanding is that in relation to the overall question as to the review of whether these accounts are still needed or required, or whether there is a repeal of the legislation or if it is to be applied differently, those matters are under continuous review by Treasury. I assume that they work with the relevant agency. If they come from another portfolio area, there would be some process to consult with the relevant minister.

Often, it is either the Attorney-General's Department or the portfolio ministry that identifies that something is now surplus to requirements or they would like to have something changed. If the process is going to change, then the application of those moneys may be to a different entity. The Treasurer, and therefore the Auditor-General, really are responsible for the investment, management and auditing of these moneys.

As the member knows, the Auditor-General is also responsible to the Treasurer, and it is only the Treasurer and this parliament that can direct him or her to undertake investigations. It did not stop me writing regularly to the Auditor-General, when in opposition, to ask him to investigate various matters, but of course that was entirely at their discretion as to whether they thought the matter was worthy of investigation.

Mr MULLIGHAN: Thank you; I appreciate that explanation, although perhaps prior to March the Deputy Premier might have thought that the Auditor-General was responsible to the parliament, rather than just to the Treasurer—

The ACTING CHAIR (Mr Pederick): The question, member for Lee.

Mr MULLIGHAN: Clause 11. Could the Deputy Premier—

The ACTING CHAIR (Mr Pederick): Hang on, are you going to clause 11? Have you finished with clauses Nos 5 to 7?

Mr MULLIGHAN: Yes.

The ACTING CHAIR (Mr Pederick): Where is your next question, member for Lee? Is it clause 11, amendment of section 36?

Mr MULLIGHAN: Yes.

Clause passed.

Clauses 6 to 10 passed.

Clause 11.

Mr MULLIGHAN: Could the Deputy Premier perhaps outline in what form the reports will likely be presented to the parliament? What will members be furnished with upon the tabling of these reports?

The Hon. V.A. CHAPMAN: I think there are two aspects of this which I hope will assist the committee and the member. Firstly, the Auditor's annual report will be presented as usual, to the extent that there will be the helpful summary of matters of concern, a listing the agencies which have been audited, and everything that you usually get except for the agency folders which are full of the financial accounts.

The financial summaries are to go online and, in addition to the normal agencies, these will include all agencies of government—some of which are not in the annual report. I think it is going from something like 70-odd to 150 full agencies, units and enterprises of government, which will have all of their financial accounts placed online. It is a website of the Auditor-General's choosing because I do not think he actually has one at the moment—he does? Excellent; how modern. So it all seems ready to go.

We are cutting down forests to publish these annual agency reports, along with the Auditor-General's Report. They are at least a complete audited account of the financials of the agencies (mainly the departments) that we have at the moment. That is fine, because at budget time we get a whole lot of estimates, because they are prepared prior to the end of the financial year.

It is a very helpful financial audited set of accounts which needs to be available for viewing and scrutiny. This is a way that we can save the trees and increase transparency. When I looked back to 1970, when Don Dunstan introduced the first budget that hit $1 billion, this was very controversial at the time.

Mr Mullighan interjecting:

The Hon. V.A. CHAPMAN: No, the member has forgotten that in 1966 we changed from pounds, shillings and pence to dollars. So, even in South Australia, we were up to speed by 1970 and had dollars and cents. That $1 billion budget is a very interesting thing to have a look at because it shows you the level of contribution, for example, that was made to primary industry and agriculture in the state and the infrastructure for that. Hospitals were of course largely run by local government at that stage so they were not a big player in the budget, but there was a very significant increase of money going to some of the agencies, which was quite controversial because we were going to hit a state government budget of $1 billion.

I would urge all members to have a look at it; it is an interesting read. You can see the media around it at the time. We also had an Auditor-General's Report back then, which was a volume not much thicker than a comic book, if you can remember what a comic book is. We really have moved to an abundance of information, some of which is probably replicated too often and is a bit wordy.

It is important to appreciate that we here in the parliament rely on the Auditor-General's office and Treasury and Finance to know that we have agencies that are spending their money wisely and effectively now, under this new definition. When we look at these annual reports, we see things like the EPAS contract—that money pit that we had to deal with in opposition, and that, as a new government, we have had to inherit and try to sort out—so it is important that the Auditor-General is going to take on this new role to look at the effectiveness of the financial application of funds in the state.

I want to correct one matter that the member raised more by way of commentary I think, which is that we should understand that the Auditor-General and his office are actually accountable to the Treasurer and not the parliament. That is not right. The Auditor-General is accountable to this parliament—absolutely to the parliament. The fact that only the Treasurer has a capacity to refer matters for investigation, and not the rest of us individually, does not mean that he is in charge of the Auditor-General's office. There is a statutory protection on that.

So, just in case there was any misunderstanding, the Auditor-General is an officer and his office works for us here in the parliament to make sure that we are able to identify risks, deal with matters on a statutory basis if there needs to be some remedy, and bring governments and their agencies, which are there to support the people and provide services to them, to account. That is his job and it is an important one.

It is without interference from others, and long may that be the case, because we have seen a situation, certainly in the 16 years I have been here, where there have been multiple reports to the parliament that, firstly, have had no statutory capacity to be tabled outside of session except, I think, for the Adelaide Oval development, which continues to provide quarterly reports by statute until the end of next year. We regularly get those, and I think members should keep an eye on these because they are very helpful in understanding the progress of major public assets.

Secondly, there are the multiple Auditor-General reports we have had outside the annual report, which have dealt with controversies of the time. In recent years, they have included the Gillman land sale. The Auditor-General reviewed the process of unsolicited bids to governments and as a result of that provided a significant report to the parliament. There were other integrity bodies looking at this as well, but this was one that specifically related to process and unsolicited bids. As a consequence of that, the then premier came in and tabled his approved new process that would be applied for future unsolicited bids of his government.

What was disappointing was that a few years later we then had the Festival Plaza report, which also related to a process upon which one entity was able to secure the tenancy for the purposes of a redevelopment of a car park and many other things at the back of Parliament House. Again, a report came through from the Auditor-General. He made it very clear that he was frustrated in being able to make a number of findings as a result of the then government's withdrawal of the right to look at things in relation to documentation.

In fact, in that regard an example was that he made comment about how unwise it was, if I can put it as kindly as that, to take projects that involve public money and public assets and take them off grid and just slip them through the cabinet process. He was scathing of that. Again, this is very helpful for us to understand as members in the parliament as to how responsible governments should act and also our responsibility as members of the parliament to provide statutory protections if we need to. I thank the member for his question and I hope that covers it.

Mr MULLIGHAN: I thank the deputy leader for her lengthy response. I did gamble that I could run outside and gather some reports and the Deputy Premier would still be going. What do you know? I was right.

The ACTING CHAIR (Mr Pederick): Your question, member for Lee.

Mr MULLIGHAN: A grievance I have with the deputy leader's response is that it did not actually answer the question. Perhaps if I put the question to her again: can she describe to the house what will be furnished to members in the future at the tabling of the Auditor-General's Report to this place?

The Hon. V.A. CHAPMAN: Everything but the financials. When the financials go on the website, you get 150 entities not just 70. I thought I said that in the opening line.

Mr MULLIGHAN: Just to be clear, this is the most recent Auditor-General's Report—

The ACTING CHAIR (Mr Pederick): Sorry, member for Lee, this is your third question on this clause.

Mr MULLIGHAN: Thank you. I will try not to make it as lengthy as the previous one. This is Part A, Executive summary, to which I think, amongst other comments, the Deputy Premier briefly referred. And this is Part B, Agency audit reports, which, if the Deputy Premier is right, is the 70-odd public sector agencies which are audited. And this is the remainder; these are the financial statements and what are referred to in the bill as annexures. We would be in receipt of this and not in receipt of that. I can imagine if you had a particular care for—

The ACTING CHAIR (Mr Pederick): Member for Lee, just for the sake of Hansard, can you perhaps relate the number of volumes?

Mr MULLIGHAN: Indeed. We have Part A, which runs to approximately 120 pages, and Part B, which runs to 560 pages, versus roughly 2,500 pages in the five appendix volumes which are now to be annexed to the report. My question more specifically is whether it will be just these two which are provided to members of parliament. What is actually provided to the Speaker of the House of Assembly and the President of the Legislative Council?

The Hon. V.A. CHAPMAN: The two volumes the member has referred to will have information for both houses in the report that is tabled. In addition to that, if he reads some of these attachments, the member may find that the certificate in relation to each of the agencies is in the front of each of those agency financial documents. My understanding is that small part of that information in respect of the agency will be in the main report but that the actual financial accounts are what is going online.

The ACTING CHAIR (Mr Pederick): Member for Lee, have you finished with that clause?

Mr MULLIGHAN: I had one other question.

The ACTING CHAIR (Mr Pederick): I will allow one more, as I am in a compliant mood today.

Mr MULLIGHAN: You are most generous, Acting Chair. Just to be clear, on the tabling of the hard copy reports, without appendices and, more particularly, financial statements, the Deputy Premier I think made reference to the fact that within these hard copy reports there will be some reference to a website, presumably something in the order of audit.sa.gov.au or similar. Beyond that, is it correct that there is no legal requirement for the Auditor-General to furnish to either presiding officer a full report to the parliament?

The Hon. V.A. CHAPMAN: Yes, and that is covered by clause 11(1)(1a) and, as indicated though, that provides the opportunity to publish the financial accounts audited by his department online and then is required under subclause (2) to provide the rest in his annual report. If the member is looking at the aid for the purposes of illustrating his point and picks up one of those agency documents—usually each of the big departments have one of their own and there are others like the universities that all find their way into one volume, with multiple agencies in some of those volumes—they will have a certificate with them and a summary in relation to each of those agencies.

That information will be added into the annual report. As you will see when you pick up those volumes, there is actually information in the front, I think, although I have not looked at one since about November last year. It is not very much. Most of that document is the actual financial accounts and if the member were to think in the last 16 years of how many forests we have chopped down—not our own any more, of course, because the former government sold our forests—

Mr Mullighan: They keep growing back.

The Hon. V.A. CHAPMAN: Yes, you have sold the rounds, I am afraid.

The Hon. D.J. Speirs: 99 years.

The Hon. V.A. CHAPMAN: Yes, 99 years, the minister reminds me—a number of rounds, grossly under the amount they should have been sold for, too, but I digress. I think that was just one more nasty little piece of history under the Labor administration that we have to both audit and suffer.

There have been mountains of documents. Personally, I quite like to look through them, mark them up and note what I am going to ask at the Auditor-General's inquiry into these matters. I have done that for the last 16 years and quite enjoyed it, but then not everybody has the same interest in these matters that I do. I would think that there are large numbers of these volumes sitting in departments or MPs' offices and that probably many, many pages have never seen the light of day. It was probably a bit remiss of the former government in the last 16 years actually not to do this type of legislation themselves or pass my bill last year to try to make sure that we could remedy this. But nevertheless—

Mr Mullighan interjecting:

The ACTING CHAIR (Mr Pederick): Order!

The Hon. V.A. CHAPMAN: —I appreciate that the member is indicating the opposition's support for the bill and so, in the interests of preserving our trees, I appreciate their support.

Clause passed.

Clause 12.

Mr MULLIGHAN: My understanding is that section 37 of the Public Finance and Audit Act gives the Auditor-General the opportunity to prepare audit reports or statements in relation to matters that are of particular interest to him. Amongst the unalloyed pleasure of sitting through the Deputy Premier's comments earlier about how desirable it would be to revisit the 1970 budget papers, or indeed the audit report, which counted, I am surprised to learn, the tick-over to a $1 billion state budget, she makes reference to the fact that, at the very least, in the last 16 years, there have been matters that the Auditor-General has specifically referred to.

I would be interested to know, for example, if we are changing the scope of what the Auditor-General can look at away from efficiency and economy to efficiency, economy and effectiveness, in consistency with the current Australian accounting standards definitions or the appropriate nomenclature. Would that change how some of those supplementary reports or supplementary investigations are done? Perhaps it is getting close to lunch and the Deputy Premier, starting out so benignly, has now become perhaps a bit more pointed in her comments—

The ACTING CHAIR (Mr Pederick): Just ask the question, member for Lee.

Mr MULLIGHAN: Thank you for your guidance. I cannot remember the supplementary reports that the Deputy Premier was referring to, but the ones that jump to my mind are the sale of the ports corporation, the sale of the SA TAB for less than one year's annual profit, the printing service, the state government insurance commission or, indeed a favourite, speaking of consultancies, the $70 million of taxpayers' money that was spent in the course of the sale of ETSA. Would it change any of those particular avenues of investigation that are matters of interest, as it says in the Public Finance and Audit Act, to the Auditor-General?

The Hon. V.A. CHAPMAN: The expectation, I am advised, is that it will not actually change what the Auditor-General is already doing. As the member has pointed out, the recommendation of the Auditor-General in this regard is really to come up with a contemporary description of what they are doing, as per Australian and New Zealand accountancy standards. But I think it is fair to say that the Auditor-General—certainly in the reports I have read since I have been here—has come up with a number of recommendations in relation to what is being progressed, for example, projects, sales and the like, and has not seemed to have been impeded in his expression of a view as to whether there has been just the assessment and auditing of the financial and economic issues or also the effectiveness.

I think it is fair to say that the investigations undertaken by the Auditor-General are not just whether the money has gone in and out of accounts that it should have or whether the money that has been allocated for certain projects been acquitted for that purpose. His office looks at all sorts of policies, plans and strategies in relation to departmental operations and will consider them in light of whether they have been complied with, or whether they need to be reviewed, and will sometimes give recommendations.

For example, the protocols around a government receiving an unsolicited bid came under the scrutiny of the Auditor-General after the Gillman fiasco, when the government attempted to provide an option to sell a valuable piece of land at Gillman to a consortium at the time, Adelaide Capital Partners.

The process by which the government had undertaken the development of that deal was under the scrutiny of the Auditor-General. He provided a separate report to his Auditor-General's annual report to the parliament to say, 'In my view, having investigated this matter, this is what happened, this is its shortcomings, this is where it failed to even comply with its own rules and this is what I recommend it should do in respect of protocols in the future.'

In the time that I have been here, his office does not appear to have been backward in coming forward in making sure that if there is a deficiency—not just a lack of accountability of a certain amount of money, but a deficiency in a practice, protocol or guidelines under which government is purporting to operate—and if it affects the economy or the effectiveness in which funds are applied for the purposes of taxpayer assets or enterprises, then he will have a say about it and he has done so. We as a parliament are the better for it, to be informed about this and to bring our governments to account. As a parliament, because we are sitting here, all the same—we are all members of parliament here in this forum—we need to look at the statutory and regulatory management that we have.

Yes, it is a change of definition. From my assessment, it does not appear to actually change a lot of what the Auditor-General is already doing—and I thank him for it—but it brings into contemporary standards in the language the obligations under our committed Australian and New Zealand standards.

Mr MULLIGHAN: Arising out of the discussion around this clause, as the Deputy Premier says quite rightly, the Auditor-General is not just constrained to auditing the finances and financial interactions of public sector agencies but is also able to investigate particular matters and report on them. In doing so, and perhaps using that additional scope which is outlined in the amendment to section 37 of 'efficiency, economy and effectiveness', we previously established that this is what members are likely to receive when the report is tabled or, obviously, the updated version thereof. Under this bill, these particular audit reports of interest to the Auditor-General would not specifically be required to be tabled. That is correct, isn't it?

The Hon. V.A. CHAPMAN: Subclause (2) provides:

(2) Section 36(3)—delete 'a supplementary report (and annex documents to it) relating to a matter required to be dealt with in an annual report and deliver the' and substitute:

other reports (and annex documents to them) relating to matters required to be dealt with in an annual report and deliver each such

My understanding of this is that those reports still come in and annexures to those are still online. That is the way I have read it.

Mr MULLIGHAN: Am I correct in thinking that some of these annexed reports, which are described as supplementary reports to the annual report, and matters of particular inquiry and investigation by the Auditor-General are referred to as annexures or annexed reports in this bill?

The Hon. V.A. CHAPMAN: No, the position is that they are extra reports. They are not the annual report; they are other reports and they come throughout the year, as the member knows. The process at the moment is that they are impeded in being able to be available for publication and viewing outside of parliamentary sitting. Therefore, the other aspect under reform in this bill is to enable that process to occur out of session.

Even when the Speaker or the President is not available, the clerks will have a role in expediting the formal receipt and publication—not tabling—out of session. The classic example is the Gillman report because we wanted to view that some years ago. I know that some matters were raised at the time in relation to the Oakden inquiry, including by another integrity body, and that was resolved because the commissioner in that entity was able to publish out of session.

A number of times, I wrote to the then Speaker, the Hon. Michael Atkinson, to inquire whether he had received the Auditor-General's Report and whether there was any capacity for publication prior to the resumption of parliament the following year. This bill means that I will not need to do that anymore. We are such an efficient new government that we will not need to do that anyway, but this act will allow the parliament to have access to that material forthwith, and it will be easily accessible as it will be online.

Clause passed.

Clause 13.

Mr MULLIGHAN: It seems to me that clause 13, the amendment of section 38, provides the capacity of the Auditor-General to publish supplementary reports as well as annexures online on a website rather than be required to table them in this house; is that correct?

The Hon. V.A. CHAPMAN: Not quite. He still has to provide his reports to the Speaker or the President. In clause 13(2), we are inserting this provision:

(2) Subject to subsection (3), the Auditor-General may, after a report has been delivered (or is taken to have been delivered)—

I assume that means he has posted it, even if it has not been opened at this end—

to the President of the Legislative Council and the Speaker of the House of Assembly under this Part…

Say, for example, he delivered it on Christmas Day or some day when they might not be here. The report has been delivered to Parliament House, but it might actually be held in somebody's postbox and not actually opened by either of those two parties. The Auditor-General may:

publish the report and any documents annexed to the report on a website determined by the Auditor-General or in such other manner as the Auditor-General thinks fit.

He has to deliver it here or purport to deliver it, but then he can put it up if he wishes to. That means that the parliament is seized of it. We might not have read it yet because we all might not be here on Christmas Day. However, he can put it up and we can go online to view it. That is the important innovation of this legislation, to ensure that it is accessible, remembering that, for those who love to read these things, they are going to have the financial accounts with the annual report for 150 entities instead of 70. It is going to be a long and happy read.

Mr MULLIGHAN: I appreciate the Deputy Premier's jocularity in response to that question, but I think we might be interested in two slightly different things. I appreciate and, of course, support the measure of timeliness that this bill includes in terms of making publicly available the reports, which are provided to the parliament's presiding officers, pretty much straightaway or, as I think the wording of the bill says, 'as soon as is practicable' or words to the same effect. My concern is not that. I think everybody can recognise that that is a good thing.

My concern is that the wording of the clauses that we have been discussing most recently, between 11 and 13 in particular, provides that supplementary reports can be considered annexures to the annual report because the wording of the Public Finance and Audit Act is, to my reading, the report itself, the Treasurer's Statements and the financial statements of public authorities and the financial statements of an administrative unit established to assist the Auditor-General in the provision of a report.

In part 3, as the Deputy Premier referred to, the Auditor-General, in the existing act, if he or she thinks fit to do so, may 'prepare a supplementary report (and annex documents to it) relating to a matter required to be dealt with in an annual report', and so on. It is not clear to me in either the existing act or in this bill that, under the terms of this bill, the supplementary reports would be provided in hard copy form to members of parliament as the report is tabled.

Instead, there is now the ability for the Auditor-General to determine that they may be published on a website or similar. Have I got that right, or is there a requirement that supplementary reports to the audit report must also be tabled in hard copy form to the parliament?

The Hon. V.A. CHAPMAN: I think the member has it half right. I think the member is confusing the annual report and supplementary reports as though the supplementary reports are annexures to the annual report and, therefore, is concerned that they will only be an electronic publication of supplementary reports and investigations. If the member reads the principal act and these amendments, he will see that the publication in parliament of the annual report will be as we have discussed and the financial accounts annexed to it will be online, but they will also be online for a whole lot more agencies.

The supplementary reports are not annexures. They are what they are: supplementary reports. They have to be tabled in this parliament, reported to the parliament and, in due course, after breaks, etc., the President and/or the Speaker publish them. We can have a hard copy of them and they will clearly be there. So we will be getting another Gillman report or another Festival Plaza report, as a supplementary report, in rolled-gold paper. The financial accounts, if they apply to that, or an annexure, which might be a contract or something of that nature, will be online.

The only exception to that is where we have the quarterly Auditor-General's reports to the parliament on the Adelaide Oval development. Members might recall, when that development was approved by this parliament, there were a number of conditions attached to the matter. There was a cap of, I think, $550 million, and there were rules about money that had to applied, with income from the new authority that was being established being given to amateur sport. All sorts of conditions were set with that and certain services had to be provided.

One of the conditions of that legislation was that the Auditor-General, for a number of years, had to give quarterly audited accounts to this parliament. Within the envelope of that legislation, the Auditor has certainly done that. Again, it is an interesting read. We get a hard copy of that, and it already has a clause in that legislation that allows the Auditor-General to do that—to send it in—and for the Speaker to make it publicly available at that time.

When we came down to Parliament House before the last election, a quarterly report would be received in the parliament. We would all get a copy of it. It was published and we could read it. We did not need to wait, necessarily, for the parliament to sit for that to be available; it was already published. In fact, usually, the first alert we had to it being published—or that I had—was that I read in the paper that X, Y, Z had not been finished, that they were a million dollars over budget on something, or they had put up the wrong goalposts, or whatever the issue was at the time. There would be a report of about 40 or 50 pages following all those matters.

Progress reported; committee to sit again.

Sitting suspended from 13:00 to 14:00.

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