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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2008-11-12 Daily Xml
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Parliamentary Committees

BUDGET AND FINANCE COMMITTEE: OPERATIONS REPORT

The Hon. R.I. LUCAS (16:10): I move:

That the 2007-08 operations report be noted.

In speaking to this motion, at the outset I thank the various members of the committee who have served on the Budget and Finance Committee for its first full year of 2007-08 and also the staff members Chris Schwarz and part-time contract research officer Kay Bennett for the work that they have undertaken.

The work of the committee has essentially revolved around the five members of the committee but, as with the original motion to establish the committee, other members of the Legislative Council were encouraged to attend when they were interested, and a protocol was established very early on to allow the participation of other members. As I look around the chamber, I see approximately six to eight other members of the Legislative Council who, at various stages through the past 12 months or so, have attended on a number of occasions. In particular, I thank the interest and attention of the Hon. Mr Darley, who has been a regular attendee at the committee meetings, but also I thank other members who have attended hearings that have been of particular interest to them for their interest.

At the outset I say that, certainly in my judgment, the work of the committee has shown that it has been an active committee. It has generality met (or tried to meet) every two weeks where that has been possible on a Monday morning from 10.30 until 12.30, and I hope that, through the work of its first year, it has demonstrated not only the worth of the Budget and Finance Committee of the Legislative Council but, more importantly, it has demonstrated the worth and importance of the Legislative Council as a chamber and as a part of our democratic institutions in South Australia.

The debate about the Legislative Council will be conducted in other motions on other occasions, and I do not intend to debate the differences between the parties here; with one party committed to abolition and another party or other parties obviously supporting the importance and the worth of the Legislative Council in the work that it does. I would hope that those who do support an ongoing role for the Legislative Council are encouraged by the work of the Legislative Council Budget and Finance Committee.

Without referring to all media and public commentary of the Legislative Council Budget and Finance Committee, I do refer to one particular commentary from Greg Kelton (a respected political commentator in South Australia), who was commenting really, I guess, on the arguments for and against the Economic and Finance Committee in the House of Assembly and the Budget and Finance Committee in the council. Under the headline of 'Watchdog loses its fear factor', Greg Kelton wrote:

The once powerful Economic and Finance Committee of parliament has become a toothless tiger under the Rann government. The committee which operated without fear or favour for years now suffers in comparison with the upper house's Budget and Finance Committee. This committee established despite much opposition from the government is getting to the nitty-gritty of government spending and putting departmental budgets under the microscope.

He wrote further:

The significant revelations about government spending and lack of accountability now come out of the Budget and Finance Committee.

Without quoting of his all article, he did go on to highlight the work of the former chairs of the Economic and Finance Committee, or its predecessor, called the public accounts committee.

He referred to the work done by a Liberal MP, Heini Becker, who was a committee member and also the committee chair for a period of time, and the work that he and that committee undertook even when there was a period of Liberal government—

The Hon. Sandra Kanck interjecting:

The Hon. R.I. LUCAS: Yes; the Hon. Sandra Kanck speaks flatteringly of Mr Becker. I am sure he would be delighted to hear that, and the committee from that time.

The Hon. Sandra Kanck interjecting:

The Hon. R.I. LUCAS: Yes; exactly. I think we would all do that. Greg Kelton highlights the work of that particular committee at the time that Heini Becker was on it. As I said, it did highlight the capacity of the committee, if properly chaired. I think one of my criticisms of the Economic and Finance Committee is that not only is it a toothless tiger (as Mr Kelton has talked about) but, in essence, it is chaired by that person I often refer to as the welsher from the west. I think the member for West Torrens (to give him his correct title) was really just a captive of the Labor Right and the government and, essentially, does what the government and the ministers wish him to do—and I think that is a shame. I am highlighting, first, the importance of the Legislative Council as an institution and, secondly, the importance of committees like the Budget and Finance Committee.

I do not want to canvass all of the issues but I do want to highlight 10 or so of the issues that have been canvassed during hearings of the committee. They include: the ongoing debate about shared services savings—the supposed savings coming from that; the related issue of dead rent being paid by the government in buildings around the CBD such as Westpac House and 77 Grenfell Street, etc.; the significant ongoing issues in relation to the future ICT program and the accuracy of claimed savings made by the government of $30 million a year; the savings tasked by many agencies which were outlined by the Treasurer and which are not being met and the reasons for those—but I will not go into the detail of all of them; the revelation that the government spent $100,000 for a party to open the tram, which attracted a lot of media attention; the government consultancies for Stuart O'Grady, in particular, and Darren Lehman—again, as I say, we are not criticising the two gentlemen concerned but the government processes in relation to that and the criticisms that were made, even by a senior public servant, about the Stuart O'Grady contract; and IT projects like RISTEC in the Treasurer's own department and the massive blow-out from just over $20 million to $43 million, and the fact that the project is still being negotiated. They have had to move from one proposed successful tenderer to another, and the time for implementation of that project has now gone out to at least 2011. The project first started in 2002 so, potentially, it will have taken nine years to bring an IT program within the Treasurer's own department to a conclusion.

Another IT program in the housing area was called Maintenance Works which, sadly for the government, did not work. There was $5 million spent trying to get that program up and going and, in the end, the whole project had to be scrapped and $5 million of precious taxpayer money was wasted. There were revelations that more than $16 million a year was being spent on hotels, motels and bed and breakfast accommodation as a result of problems within the foster care system managed by Families and Communities.

Another matter which had a lot of publicity in the early days was the Premier's slush fund where he managed to get an extra $400,000 plus out of Treasury to go into his slush fund to give to a church in his electorate with scant, if any, consideration in relation to the submission that went to the government requesting that money.

So, there are 10 or so issues, but dozens of others have been raised over the 12-month period during the course of the work of the committee. I highlight those matters only to indicate the length and breadth of the sorts of issues that are being raised by the committee members with the chief executive officers and senior finance officers who attend.

One of the advantages of the committee, again, given the fact that the Legislative Council decided it would be controlled by non-government members, was to ensure a continued flow of meetings and witnesses who attended. It also meant that the committees could not be filibustered. In the early stages, I think there was a little bit of a test, where long introductory statements were made and long answers were given to relatively innocuous questions, perhaps with the intention that if the two hours was talked out that would be the end of it.

However, very early on the committee made the very wise decision to listen politely and then say, 'Okay, well, you will come back next month.' We found in the very first round that three agencies, I believe, were required to come back again for another two-hour session. I think the chief executives soon learnt that it was sensible not to mess around, in terms of filibustering with respect to the committee, because the committee had that power—unlike the estimates committees in the House of Assembly, where there is a specified period and if someone talks that time out that is the end of it. If members have a look at the estimates committees copies of Hansard they will see that, in some of the committees, the opening statement goes as long as the questioning, in terms of where they might have only an hour with a particular witness on a particular occasion.

So, it is one of the strengths of the upper house committee that members have the capacity to say that they did not have to get into any acrimonious argument at all but, in the end, the majority of the committee just decided that there were so many questions that had not been resolved that the health department, the education department and the justice department were invited back to finalise their evidence.

I have previously spoken a little about the strength of upper house budget and finance committees around the world. I had the opportunity earlier this year to look at some upper house committees, such as our Budget and Finance Committee, in the United States and Canada. The first issue was that the strength of those committees, in my judgment, was to ensure that they were not controlled by the government of the day. The second issue was the quality and quantity of the staff resources provided to the committee—and I will speak on that briefly when I look at some conclusions or directions for the future.

Whilst this would never be possible in South Australia (and I would not be arguing for it), one upper house committee had somewhere between 150 and 200 full-time staff working for it. Through that mechanism, they were able to produce for the members of the committee a line-by-line analysis of every budget paper to assist those members, in terms of the questioning of senior bureaucrats and, in that case, some ministers as well. Of course, that sort of quantity of staff is not possible in South Australia, but it is an important issue and, as I said, I will turn to that in terms of the way ahead.

However, to summarise, I think it is important to note that the experience of legislatures in other parts of the world is very much heading in the same direction that the Legislative Council is headed, in terms of a greater say for upper houses with respect to ensuring financial accountability and scrutiny of government spending, and that is particularly possible when the government does not control the committees and the chambers.

In terms of looking at the direction ahead, I think the reality is that, given the decisions that this parliament has taken (and I certainly support it, so I do not have a problem with that), whatever happens post 2010, whichever party is elected as government, the non-government members in this chamber will ensure that there is an ongoing committee along the lines of the Budget and Finance Committee.

It is my hope and expectation, if there is a Liberal government, that there will be a hard-working upper house Budget and Finance Committee controlled by non-government members—assuming the non-government members control this chamber, which obviously will be the case in the foreseeable future in South Australia—to ensure financial accountability of the executive arm of government. No government, Liberal or Labor, I suspect will warmly welcome that. This government certainly has run 100 miles an hour from it. I hope that a future Liberal government will recognise the importance of it and, whilst it might not love it, embrace it as a policy initiative in terms of the importance of the work that this chamber and such a committee can undertake.

Personally, I certainly think that the way ahead is that this Budget and Finance Committee ought to become a permanent standing committee of the Legislative Council along the lines of the Statutory Authorities Review Committee. I know some members have views about the potential rationalisation of various committees. I have no objection to that sort of discussion going on and support some rationalisation. I do not support it, however, in the context of reducing the number of solely Legislative Council-based standing committees. I see the capacity for rationalisation existing in the joint committees of the parliament, which are standing committees. On another occasion I will express some views on that, but not today.

If this Budget and Finance Committee were to be established as a standing committee, which would be my preference after the next election, whoever wins, it would assist in terms of its status as a future body. In future it is important that members of the Legislative Council see membership of it as important and sought-after positions. The possibility of being a chair of the Budget and Finance Committee or a hard-working member of the committee I would hope in future would be seen as sought after positions and that future Legislative Councillors would look on it in that way and as an important task for them to undertake on behalf of the parliament. Most members of parliament are not without ambition, but hopefully they would see it as a path ahead for members of the Legislative Council within their own parties, whether in government or opposition or on the cross benches.

As part of being a standing committee, it is important for the long-term integrity of the committee that it have permanent staff members. Given the current structure, that probably means that it will be possible to appoint two permanent staff members. It would be my view that at least 1½ of those permanent staff members' time ought to be in terms of the capacity to do research for members of the committee in preparation of questions and lines of inquiry with various government departments and agencies.

All the committees overseas are much better staffed than the committee here in the Legislative Council, but the point in future is that the strength of this committee in terms of its work ought not be dependant on just the background and experience of the current members of the Legislative Council who sit on the particular committee, because in this chamber members will come from all sorts of backgrounds, and some will have past experience in the area while others might not. The only way to ensure the ongoing strength of the committee is to have people who are prepared to work hard.

You do need permanent and ongoing staff who can develop corporate knowledge and expertise. I think we need to canvas this issue of whether or not research officers ought to be limited to, for example, only a two-year contract period for committees. In a budget and finance committee, if you are going to have only two permanent staff, you need to develop ongoing expertise over a long period of time in these issues so that you can impart that knowledge and experience to all of the members of the committee.

I will certainly be lobbying my own party, but I also lobby all members in this chamber through this contribution and others who might follow, to consider the view that it should be a standing committee. We ought to be strongly supporting the notion that have two permanent ongoing staff, and that they ought to have expertise in budget and finance issues, preferably having come from the Auditor-General's office, the Department of Treasury and Finance or some related area of discipline. As I said, they should be available to all members of the committee to provide questions and lines of inquiry for that committee.

Finally, I mention two things, the first of which is minor. The committee thus far has generally been flexible in terms of asking for departmental executives to meet a four-week turnaround time for answers to questions on notice. I would hope that the committee in its second year will, through its staff, insist on those senior executives meeting that four-week turnaround or something very close to it.

We certainly cannot allow a circumstance where the turnaround time for one department, I think, was something more than six months. That is becoming more and more like the Estimates Committee in the other place or, indeed, questions in this chamber when they are asked of ministers and the government. The committee has the capacity, in the end, if it so wishes, to demand the reappearance of a senior officer before the committee, and I think that is an option that the committee may well need to address in the future if genuine endeavours are not made by senior departmental officers.

Many senior officers who have given evidence have worked very diligently and hard to produce answers within approximately the four-week turnaround time and, certainly, it is only a small number who have erred by a significant margin in terms of meeting the four-week turnaround time. The final point I would make in terms of the way ahead is that the committee's inquiries have been on a rotational basis to meet with all of the departments and, certainly, my view is that that ought to continue in terms of the work the committee does.

One of the additional tasks that the committee might consider in the future is that, if there is a particular issue within a government department or agency which is attracting some attention, the committee may well resolve to conduct short, targeted meetings—and I certainly would strongly oppose tying up the committee for six month and 12 month inquiries like the Statute Authorities Review Committee—maybe two meetings maximum, where a range of witnesses are brought in perhaps from the middle levels of the department and maybe one or two contractors.

If it were an ICT program where $10 million was being wasted in a department, the specialist IT people within the department, not just the CEO, and the contractors who are contracting with the government or the consultants who have been employed might be called along and, rather than just the one witness, you may have in a two-hour session two or three sets of witnesses and a specific report being given by the committee on a particular issue.

That is something for future discussion by the committee. At this stage, as I said, the committee is intent for 2008-09 on continuing the process and the work that it has undertaken through the first year of 2007-08. I commend the committee's first report to the chamber.

Debate adjourned on motion of Hon. J.M. Gazzola.

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