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Legislative Council - Fifty-Fourth Parliament, Second Session (54-2)
2021-10-26 Daily Xml
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Bills

Statutes Amendment (Budget Measures 2021) Bill

Committee Stage

In committee.

Clause 1.

The Hon. R.I. LUCAS: I want to take the opportunity to share information with members of the committee on clause 1. There is one set of amendments which the Hon. Mr Pangallo has moved which directly relate to provisions in the budget measures bill, and there are two proposed packages of amendments which are unrelated to the budget measures bill but have been incorporated for debate during the committee stage of the chamber.

I want to read onto the public record a letter I have received dated 20 October. This is in relation to the series of amendments moved by the Hon. Mr Simms in relation to government advertising. On 20 October, I received a letter from the Auditor-General, and I propose, for the benefit of committee members, to read the Auditor-General's response to the proposed action before we get into the substantive issues of debate on that package of amendments. The letter is dated 20 October:

Dear Treasurer

Statutes Amendment (Budget Measures 2021) Bill 2021 (the Bill)

Thank you for the opportunity to provide feedback on the proposed amendments to the Public Finance and Audit Act 1987 contained in the Bill.

I wish to make it absolutely clear that I consider these amendments to be completely inappropriate for the role of the Auditor-General. The Bill, in requiring an Auditor-General to approve expenditure in line with legislation, while the same legislation requires the Auditor-General to audit that expenditure as part of their annual functions, creates a fundamental conflict.

The Bill fails on the following matters:

It directs the Auditor-General to carry out an activity, approval of government expenditure, which is inimical to the role.

It means the Auditor-General is exposed to a conflict of duties as the mandated, statutory auditor of the public accounts.

It inappropriately interrupts procurement practices designed to achieve public procurement objectives.

It directs the Auditor-General to carry out an activity, approval of government expenditure, which is inimical to the role

The Bill inappropriately assigns an executive expenditure approval function to the Auditor-General by requiring the Auditor-General to approve Executive government expenditure for certain government advertising. The Auditor-General should never be in a position to approve any Executive government expenditure.

The Auditor-General should only ever be empowered to approve expenditure for the Auditor-General's purposes of the PFAA [Public Finance and Audit Act] to independently audit, examine or review and report to the Parliament about expenditure approved by Executive government.

Government advertising expenditure is clearly not expenditure for an auditing purpose.

This proposal to be an approver of Executive government expenditure is completely at odds with the independent Auditor-General role and detrimental to the inherent independence from the Executive which underpins the position of the Auditor-General.

The Auditor-General is exposed to a conflict of duties as the mandated, statutory auditor of the public accounts

The Auditor-General audits the public accounts—section 31. Section 31 provides:

(1) The Auditor-General must—

(a) audit the public accounts in respect of each financial year;

(b) audit the accounts of each public authority in respect of the financial year of each authority.

Government advertising expenditure must come from the public accounts. The implication is the Auditor-General must audit expenditure the Auditor-General has approved. This is unsound.

The principal that the Auditor-General cannot audit their own decisions is enshrined in the PFFA. Specifically, Section 31(3):

The Auditor-General will not audit the accounts of the administrative unit established to assist the Auditor-General in carrying out his or her functions under this Act. In effect the Auditor-General cannot audit their own accounts nor the expenditure they are incurring in discharging their statutory audit functions. The Public Finance and Audit Act requires the Governor to appoint an independent external auditor to review the Auditor-General's activities.

The [Public Finance and Audit Act] prescribes the functions of the Auditor-General are to perform audits, examinations and reviews and be the Chief Executive of the Auditor-General's Department and approving Executive government expenditure is inconsistent with these functions.

It is not a function of the Auditor-General to conduct government advertising. Having an approval role in Executive government procurement and expenditure involves the Auditor-General in such conduct.

Inappropriately interrupts procurement practices designed to achieve public procurement objective

The Executive government issues the procurement rules.

Government expenditure is all subject to procurement rules established through Treasurer's Instruction 18 Procurement. Procurement involves multiple steps to achieve the State procurement objectives:

to promote good governance, contract management, transparency and recordkeeping by public authorities in relation to procurement

to promote compliance with whole-of-government procurement policies.

Agencies responsible for Executive government expenditure must apply reasonable practices and controls to ensure appropriate public administration practices are used to plan, procure and deliver public expenditure objectives.

The proposed provisions fail to be consistent with these rules by interjecting an approval role completely outside of the systems and practices responsible for initiating and conducting the Executive government expenditure.

Amending the Bill to require the Auditor-General to conduct audits of government advertising

If during the Parliamentary debate of the draft Bill, amendments are proposed requiring the Auditor-General to conduct audits of government advertising, in my opinion this is unnecessary. The Auditor-General has existing sufficient powers to conduct audits of government advertising expenditure. In past debate on this role, I have noted the [Public Finance and Audit Act] provides:

[section] 24(6)

The Auditor-General is not subject to the direction of any person as to—

(a) the manner in which functions are carried out or powers are exercised by the Auditor-General under this Act; or

(b) the priority that he or she gives to a particular matter in carrying out functions under this Act.

Whether such an audit is performed is, as the PFFA stands, a matter for the discretion of the Auditor-General against the overall activities of government which roundly involve annual expenditure of $24 billion.

Other comments on the Bill

Expenditure is necessary for the proper functions of government test

The Bill sets the standard to be applied that the Auditor-General decide if the expenditure is necessary for the proper functions of government.

The Macquarie Dictionary defines necessary as something that is indispensable, an imperative requirement or need. This seems a difficult test to pass. It suggests that most expenditure would fail this test and the Auditor-General be obliged to assess such expenditure as improper as defined in the Bill.

Primary purpose test

The Bill states the assessment is to be based on the Auditor-General being satisfied that the primary purpose of the government advertising is to communicate information relating to the following:

(a) public health and public safety;

(b) road and public transport works or interruptions;

(c) emergencies;

(d) legal or statutory matters;

(e) electoral material published under the authority of the Electoral Commissioner;

(f) the engagement or employment of persons in the service of the government;

(g) attendance at an event;

(h) tourism;

(i) auctions and other sales of property, goods and services;

(j) courses at tertiary educational institutions.

Essentially these are all activities of government. The criteria are too vague to allow an efficient and effective audit. It is likely that most expenditure would pass this test.

Auditor-General have powers under section 34

The Bill states:

(8) The Auditor-General may exercise the Auditor-General's powers under section 34 of this Act for the purposes of determining whether or not to grant a section 41B approval and section 34 applies as if—

(a) a reference the conduct of an audit or review, or the making of an examination; and

(b) a reference to an audit, review or examination, were a reference to the determination whether or not to grant a section 41B approval.

Section 34 deals with the powers of Auditor-General to obtain information. The powers include coercive powers:

(1) The Auditor-General or an authorised officer may, in order to conduct an audit or review, or make an examination, under this Act—

(a) by summons, require the appearance of any persons or the production of any relevant accounts, records or other documents;

(c) require a person who has access to information that is, in the opinion of the Auditor-General or the authorised officer, relevant to the audit, review or examination, to provide that information to the Auditor-General or the authorised officer in writing;

(d) require a person appearing before him or her to make an oath or affirmation (which the Auditor-General or authorised officer may administer) to answer truthfully all questions relating to an audit, review or examination under this Act and to any accounts, records or other documents that are the subject of, or are related to, an audit, review or examination under this Act;

These are necessary powers for the Auditor-General.

These powers are unlikely to be reasonably exercised within the timeframes provided in the Bill, monthly reporting and certainly before an election.

All audit work and reporting is subject to procedural fairness. This means giving reasonable opportunity to those subject to audit. This test is higher where coercive powers are exercised.

Monthly reporting

The Bill states the Auditor-General must, within 7 days of the end of each month that falls in a relevant election period, publish a report on the details of each section 41B approval granted during the month to which the report relates.

This imposes a regular review function throughout the period of the provisions namely, the relevant election period commencing on 1 July in the year immediately before a general election.

All such expenditure for the eight months leading to the March election will need review.

This either displaces other risk-based priority work the Auditor-General would do or would need to be properly resourced to ensure this new activity did not detract from the other functions of the Auditor-General. Importantly in the period 1 July to 30 September the Auditor-General's resources are always fully committed to the production of the Auditor-General's Annual report to Parliament.

Any displacement of the discretionary, risk-based role of the Auditor-General reduces the effectiveness the Auditor-General may have in any reporting period.

In this regard, I have reported to parliament twice that I consider the $4 million threshold in the Passenger Transport Act 1994 that limits the discretionary audits the Auditor-General can do in a reporting period warrants consideration by Parliament.

Principal officer

The Bill states:

principle officer, in relation to a government agency, means—

(a) if the agency consists of a single person (including a corporation sole but not any other body corporate)—that person;

(b) if the agency consists of an unincorporated board or committee—the presiding officer;

(c) in any other case—the chief executive officer of the agency or a person determined by the Auditor-General to be the principal officer of the agency;

This provision again means the Auditor-General is given a role in Executive government administration.

It is inimical to the independent role of the Auditor-General to audit the Executive government and report to the Parliament.

If you or your officers require further information with respect to this matter, please contact me on [a telephone number].

Yours sincerely, Andrew Richardson, Auditor-General.

I seek leave to table a copy of that letter from the Auditor-General to me for the benefit of members.

Leave granted.

The Hon. R.I. LUCAS: In addressing that, I know we will come to the honourable member's amendments later on and will address some of the other details and the practicality of the particular provisions the honourable member has moved in this place. I note that they are either identical or very similar to the amendments moved by the member for Lee, Mr Mullighan, by way of a separate bill in the House of Assembly.

I can only assume that either Mr Mullighan or the Labor Party produced the amendments and provided a copy to the honourable member or vice versa. The Hon. Mr Simms is the initiator, and he provided a copy to the member for Lee and got him, on the Greens' behalf, to move this bill in the House of Assembly. But I will leave that to the honourable member and others to speculate on. It is neither here nor there; we have the budget measures bill and this series of amendments being moved here.

I will address the specific issues when we get to the particular clause in the bill. I read the Auditor-General's letter to put it on the record because, in my long experience in this chamber, it is very rare for the Auditor-General to take the action that he has taken in relation to this particular bill and these particular amendments.

He, I think all members would acknowledge, is a fiercely independent officer and person/individual. He is not prone to public profile, and we are all aware of other independent officers who perhaps might be more attracted to a public profile. I do not think anyone could accuse our Auditor-General of ever succumbing to those particular deficiencies. Therefore, for him to write this particular letter indicates the depth of feeling he has in relation to what he is going to be asked to do.

I will not reiterate the individual details of what I have just read onto the public record until we get to the individual stages of the debate, but I do put the context that this is a most unusual occurrence, that the Auditor-General would speak out, and speak out so strongly, on this particular issue. I would urge members to give due consideration to the views of the Auditor-General in relation to this issue. The practicalities we will come to on the particular amendments later on, but as I said it is almost unprecedented to see his intervention in this way.

I will just make some brief comments in relation to a couple of other general issues. When we come to the issues in the Hon. Mr Pangallo's amendments, in principle I have no great concerns about guidelines being turned into regulations. I note that much of the financial assistance that we provide by way of land tax is done by way of administrative action and government guidelines. For example, in relation to Treasury, all of the money that we have been giving away in relation to COVID assistance grants has been done through administrative decision by me as Treasurer and through Treasury. It is the normal course of events. In New South Wales, similarly, they have used a process of guidelines. I think in Victoria they use a process of guidelines as well.

The cautionary note I put on the record—and we will debate this when we get to the clauses—is that I have now been advised that if this amendment goes through in the way that it is intended it will delay by, potentially, eight months to 10 months the prospect of any build-to-rent schemes in South Australia being initiated. The advice that I have received is that if it is required to be done by regulation, as members will know, there are a statutory number of sitting days that are required between the issuing of the regulation and for a member—the Hon. Mr Pangallo or someone else—to move a disallowance. They only have to move the disallowance within that statutory period. They can then delay the actual vote on the bill for as long as they have the numbers in the house to prevail.

The advice I have received is that if we have to do it by regulation because of the juxtaposition of the end of a parliamentary session and an election coming up and the inevitable delay before a new parliament can be convened—if it is a close election, there will be recounting of votes and all those sorts of things that will have to go on, and then the inevitable delay before the new parliament is established—then the remaining days would expire in relation to a potential disallowance motion and no build-to-rent scheme would be able to be up and actioned until that particular period has expired. However, if it is done by way of guidelines, then all of the necessary action can occur for the concession to take effect from 1 July of next year.

The government's view is that with housing affordability being a significant issue leading into the election we are trying to encourage people to invest in build-to-rent schemes so there are more rental accommodation options in South Australia. If the Labor Party and crossbenchers are minded to, in essence, delay the potential for this housing affordability option being implemented within the time period that we are looking at, then so be it. It will just mean it will potentially delay, until the expiry of a disallowance motion, consideration by the parliament to occur and then it can be considered by developers after that particular period. It is the government's preference to get up and going and provide the option sooner rather than later, but ultimately if the majority in the parliament has a different view then so be it, that would be the end result of it.

Finally, the Australian Labor Party asking us to pay $1.5 million of taxpayers' money to help them cost their policies, particularly at a time when we are all struggling to find every last dollar, is a bit rich, we think. The whole notion that the taxpayer should pay the Australian Labor Party to cost their policies, as I said, is a bit rich. It is not something that we are supportive of and it is certainly our very strong view that that particular expenditure of up to, potentially, $1½ million, can only be estimated. If there are an excessive number of requests for consideration it might be more or it could be less, depending on what sort of demand.

Certainly, the cost of it last time cannot be used as a guide because the then opposition, the Liberal Party, did not want to use taxpayers' money to fund the costing of their promises. They were prepared to use their own money to fund the costing of the promises. Therefore, the expenditure last time is no useful guide because clearly the Labor Party are desperate to have the taxpayers cost their particular policy promises. When we come to those amendments, we will be opposing them as well.

Clause passed.

Clauses 2 and 3 passed.

Clause 4.

The Hon. F. PANGALLO: I move:

Amendment No 1 [Pangallo–1]—

Page 3, lines 15 and 16 [clause 4, inserted section 7A(1)(c)]—Delete 'guidelines approved by the Treasurer for the purposes of this section' and substitute 'the regulations'

The Hon. K.J. MAHER: A brief contribution on the amendment being moved by the Hon. Frank Pangallo. The opposition is minded to support the Hon. Frank Pangallo's amendment. We have listened with interest to the arguments the Treasurer has put on a range of things and we are a little dismayed.

Last sitting week, when this bill was the government's number one priority, the most important thing for them to pass during the week, the fact that there was new information on that day that needed to be considered meant that the government did not want to pass the bill on that day. We have the Treasurer coming into this chamber, giving new information to members of this chamber and wanting the bill to be passed on that day, exactly what the government rallied against last time.

The problem is, with the amount of scheduled sitting days we have left, if we do not get on and deal with this bill we are in grave danger of it not passing at all. We are prepared to pass the amendments that the Hon. Frank Pangallo has put forward, in exactly the same vein that we are prepared to pass the amendments that the Hon. Robert Simms has put forward, notwithstanding the new information the Treasurer has revealed today.

We do stand ready though, as I am sure other crossbenchers would, in discussions between the chambers, to see if there is genuine concern, from what the Treasurer has raised today, to make those changes between the houses as this bill finds its way back down. I think, with the Hon. Frank Pangallo's amendments and certainly with the Hon. Robert Simms' amendments, if we just concede, 'We need to pass it now. The Treasurer has come in with new information at the very last second. We should not pass any of the these amendments,' we do ourselves out of the possibility of these surviving in any way, shape or form.

We are prepared to pass this bill today because where we are in the sitting calendar it needs to be passed today to have any chance of coming into effect. But we are open to looking at the arguments that the Treasurer has only put forward at the last minute, in contradiction to the feigned outrage of the Treasurer last week when the same thing happened with new information being put forward on the day.

The Treasurer may have some points that are worthy of looking at, and we will be prepared to look at them between the houses, but we are not prepared, as the Treasurer waltzes in here at the very last minute to put new information on the record, for that (a) to be a basis not to keep the possibility of these amendments alive and (b) for that to be the basis of further holding up this bill as one of the two things the Treasurer is seeking to do, one of the two ploys that he is seeking to do today. It may be that in relation to the approval for certain types of government advertising that seeks to reduce political advertising that there may be someone better than the Auditor-General to approve it.

I will place on the record that we are happy to work with the government between the houses, but if we vote down the Hon. Robert Simms' amendment, we have no possibility of keeping that alive. Between the houses we are more than happy to look at and take into account the information that has only just been provided, just in the last few minutes, to this chamber.

We are happy to look at that information to see if there is a possibility that there is a more appropriate official or someone from the outside to take the role that is prescribed to the Auditor-General in here to make those changes in the lower house. We stand ready to do that, but what we do not stand ready for is the Treasurer to come in at the last minute, as he rallied against last sitting week, with changes. We are happy to look at those between the houses.

The Hon. R.I. LUCAS: What an extraordinary response from the Leader of the Opposition. I think the date of this particular amendment filed was the 13th, which, with a quick check, was the last Wednesday of the sitting. The government knew nothing about these amendments until the Australian Labor Party waltzed into the House of Assembly and suspended standing orders, I believe, and moved a bill to this particular effect. I do not know whether it was the same day or the day afterwards that the Hon. Mr Simms filed or indicated amendments to this particular bill.

The government knew nothing about these particular amendments. It was an extraordinary response from Leader of the Opposition to say that the government is waltzing in at the last moment with new information. This is actually an attachment to a bill, which has nothing to do with the bill, nothing to do with a budget measure. It is an endeavour from the Australian Labor Party and, in this chamber, from the Greens, to attach a new issue. Issues can be and these issues are being pursued by way of separate bills in the past so they are issues that can be raised and when they are they can be addressed, but this has been tacked on to a budget measures bill.

For the Leader of the Opposition to try to indicate that in some way it is the government responding to an amendment, which was dumped onto this chamber in the last sitting week, completely unrelated to the bill, that we actually do perhaps what the Australian Labor Party should have done, and if you are going to ask someone to actually do an audit you might actually ask them. Clearly, the Australian Labor Party, in crafting these particular amendments, just blithely went about drafting the amendments without even contemplating consulting the independent officer of the parliament that they are going to place these particular responsibilities upon.

Do not be cute and try to indicate that the government, in coming back and responding to an amendment which had been dumped on the table without notice in the last week, actually does what the Leader of the Opposition and the Labor Party should have done, that is, consulted a wide range of people in relation to their particular stunt and try to attach to this particular bill.

Any criticism rests entirely with the Australian Labor Party and/or the Greens, depending on who initiated it. I know where my suspicions lie, and they lie with the Australian Labor Party. They are the ones who constructed this, and they should have consulted a variety of people before they dumped this amendment and convinced other people it is a great idea to either move and/or support this particular amendment in this particular chamber.

You actually need to do the work and think through the implications of amendments that you are going to move. If the Labor Party seek to convince crossbenchers or others in this chamber about the merit of otherwise, they will be found wanting if, on so many occasions, they indicate to other members of this chamber, 'Hey, this is a good way to do it,' and set them up and then have the Auditor-General, or indeed somebody else, come down and say, 'Hey, this doesn't make any sense at all. We are trenchantly opposed.'

It is cute for the Leader of the Opposition in this chamber because it is the Hon. Mr Simms as the new member who has been asked to move this particular amendment in this particular chamber. I think the Leader of the Opposition is fortunate that he has his mask on at the moment. If there is to be an embarrassment in relation to the management of this particular issue, it rests entirely with the Australian Labor Party and the Leader of the Opposition in this particular chamber.

All we have done, once that one was dumped, was actually respond to it. I am minded that the Leader of the Opposition is addressing an amendment later on. We should be addressing the Hon. Mr Pangallo's amendment, which is in relation to the issue of the build-to-rent scheme, and I will return to that.

As I said, if we were not in the situation where we might be running into this logjam of an election, the principle of whether it is a guideline or regulation is not something I would die in a ditch over. I think it makes sense. All previous governments and interstate governments do it by guidelines. This is actually providing a concession. It is not as if we are providing punitive action on somebody. We are actually providing a concession to try to attract, in the interests of housing affordability, people with money to invest in build-to-rent schemes.

I think I might have indicated this when asked a question in this house. Soon after we announced this, a prominent developer from another state said, 'It's about time. The Eastern States are doing these schemes. We are now interested in coming and investing significant sums of money in South Australia in a build-to-rent scheme,' which is terrific.

In terms of housing affordability, everyone says, 'Hey, we've got a problem.' The government is seeking to address it. What we are potentially being asked to do now is to put in a barrier which might delay a potential developer in a build-to-rent scheme by a period of eight, nine, 10, 11 months, depending on how long. If in the next parliament the Hon. Mr Pangallo moves to disallow the regulations but then he doesn't bring it to a vote for a period of time, because there is no limit on how long an individual private member can delay the vote on a disallowance motion, it could go on interminably for 12 months or 18 months.

I am sure that, if someone is going to move a disallowance, they felt so strongly about it, hopefully they would not go down that particular path. But if you are an investor, you are not going to invest until you know whether or not that is going to get the approval and will not be disallowed by either house of parliament.

If there was a particular concern about the government, on behalf of taxpayers, providing an incentive for people to build-to-rent schemes, I could perhaps understand it. A number of the non-government organisations that are active in terms of community housing, social welfare housing, the homelessness issue, without exception, even though they might be critical of other aspects of the government's policies, have been supportive or endorsing this particular build-to-rent option.

We will not be supporting this. I think it would be disappointing if the Australian Labor Party, who profess that they are concerned about homelessness, affordable housing, rental accommodation, take a deliberate decision knowing what the implications might be to support this, as the Leader of the Opposition in this chamber has indicated he is going to do.

The government is not introducing new information here in relation to it. Any sensible opposition party could have consulted either parliamentary counsel, lawyers, or indeed anybody else who is involved in this particular area, once these amendments were flagged by the Hon. Mr Pangallo to form their own particular view on the issue. So again, the government is not introducing new information in relation to this. This is information that anyone would be aware of if they took the trouble to actually consult and consider the particular issues that are there.

We will be strongly opposing the first amendment. We will take the first amendment as a test vote of all five amendments. If the Australian Labor Party and the crossbenchers win the first vote, we will certainly be dividing on it. If the Australian Labor Party and the crossbenchers win the first vote then we will still oppose the remaining ones but will not be seeking to divide on the remaining amendments 2 to 5. We will take them as having been determined by the test vote on amendment No.1.

The Hon. K.J. MAHER: I want to just reflect on a couple of comments, not just made in the Treasurer's contribution just now but comments that have been made since this debate began. The Treasurer seems to impute some suspicion or nefarious purpose if the Greens and the South Australian Labor Party occasionally come to the same view on things. Well, I can tell the Treasurer we do that sometimes. I know that the Hon. Tammy Franks and I both introduced almost identical legislation on a legislated custody notification scheme to require the Aboriginal Legal Service in South Australia to be notified when an Aboriginal person is taken into custody.

Just this morning, I think it was the member for Lee—whom the Treasurer has mentioned before—gave notice to introduce legislation into the lower house to ensure a public holiday on Christmas Day as well as the one on the next week. In fact, I think that bill is identical to one that the Hon. Tammy Franks gave notice of weeks before.

The CHAIR: I will just remind the Leader of the Opposition that we are dealing with the amendment moved by the Hon. Mr Pangallo.

The Hon. K.J. MAHER: Certainly, sir.

The CHAIR: I have been pretty tolerant on both sides, I think, in that we have strayed a bit from that amendment. I understand it is relative to the entire bill but I think we ought to move on.

The Hon. K.J. MAHER: I will finish up very shortly, sir. It is of no surprise that we disagree on some things but occasionally we will agree on things, and the use of political government advertising, which we will get to later, is one of those things. The other reflection that the Treasurer talked about was how dare we even contemplate doing something that someone who holds a statutory office has written in to give their views about.

Well, I will tell you what, sir, this government, when they had carriage of the Hon. Frank Pangallo's ICAC bill through the lower house, knew exactly what the ICAC commissioner's view of that was but parliament decided to do that because that is parliament's role to decide, to make laws. That didn't stop the Attorney-General—who had carriage of this bill in the lower house, knowing what the ICAC commissioner's views were—passing those.

I will not be mischaracterised by the Treasurer. I have said and I will say it again so there can be no misunderstanding that, with these measures if the new information that the Treasurer has brought to this chamber today continues to carry weight and persuades us, we are open to reviewing, changing or doing things differently between the houses.

So for the Treasurer to grandstand here today and say, 'The Labor opposition, the South Australian Greens, SA-Best or the Hon. John Darley will be doing this,' well, we have made it clear that not just the opposition but I am sure crossbenchers can continue to contribute to the public debate on this between the chambers.

The committee divided on the suggested amendment:

Ayes 12

Noes 9

Majority 3

AYES
Bonaros, C. Bourke, E.S. Franks, T.A.
Hanson, J.E. Hunter, I.K. Maher, K.J.
Ngo, T.T. Pangallo, F. (teller) Pnevmatikos, I.
Scriven, C.M. Simms, R.A. Wortley, R.P.
NOES
Centofanti, N.J. Darley, J.A. Girolamo, H.M.
Hood, D.G.E. Lee, J.S. Lensink, J.M.A.
Lucas, R.I. (teller) Stephens, T.J. Wade, S.G.

The CHAIR: The Hon. Mr Pangallo, you have four more suggested amendments, which I understand are consequential.

The Hon. F. PANGALLO: Yes, they are.

The CHAIR: You will move them en bloc?

The Hon. F. PANGALLO: Yes, I will move them in a block, and thank you, Mr Chairman. In relation to this clause, I move:

Amendment No 2 [Pangallo–1]—

Page 3, line 20 [clause 4, inserted section 7A(2)]—Delete 'The guidelines' and substitute:

Regulations made for the purposes of this section

Amendment No 3 [Pangallo–1]—

Page 3, line 37 [clause 4, inserted section 7A(3)]—Delete 'A guideline' and substitute:

Regulations made for the purposes of this section

Amendment No 4 [Pangallo–1]—

Page 4, line 5 [clause 4, inserted section 7A(4)]—Delete 'guidelines' and substitute 'regulations'

Amendment No 5 [Pangallo–1]—

Page 4, lines 10 and 11 [clause 4, inserted section 7A(5)]—Delete 'guidelines approved by the Treasurer for the purposes of this section' and substitute 'the regulations'

I note what the Treasurer said in relation to that, but I think by having them in regulations there is a fail-safe mechanism in there, there is something that is built in there in case there are issues down the track, or something, with that. There is no intention from SA-Best, and I am sure there would not be from Labor or even the Greens, to detract—

Members interjecting:

The Hon. F. PANGALLO: Even the Greens. Well, in fact, or the Greens. Well, in fact, especially the Greens.

The CHAIR: Order!

The Hon. F. PANGALLO: I will correct myself, when it comes to housing for the lower income sector.

Suggested amendments carried; clause as suggested to be amended passed.

Clauses 5 to 11 passed.

New clauses 11A and 11B.

The Hon. K.J. MAHER: I move:

Amendment No 1 [Maher–1]—

Page 7, after line 20—Insert:

Part 5A—Amendment of Public Finance and Audit Act 1987

11A—Insertion of Part 3A

After section 39 insert:

Part 3A—Parliamentary Budget Advisory Service

39A—Establishment of Parliamentary Budget Advisory Service

(1) The Treasurer must, in each relevant election period, establish and maintain a Parliamentary Budget Advisory Service (PBAS) in accordance with this section.

(2) The PBAS is to be established under the Public Sector Act 2009 as an attached office to a government department administered by the Treasurer.

(3) The function of the PBAS established in a relevant election period is to provide independent and consistent costings of policies developed by registered political parties and other candidates for the relevant general election in a timely manner and in a form which is useful to the candidates for informing the public in advance of the election.

(4) The Treasurer must ensure that—

(a) the level of funding provided for the PBAS is sufficient to enable it to act with all due speed in relation to requests for costings and to deal with multiple such requests at the same time; and

(b) the PBAS is managed by an executive employee of a public sector agency (within the meaning of the Public Sector Act 2009); and

(c) the general staffing and administrative arrangements for the PBAS will allow it to properly carry out its function; and

(d) the PBAS remains available to deal with requests for costings throughout the whole of the relevant election period.

(5) Except as may be necessary for the purpose of providing a costing to a registered political party or candidate, a person carrying out official functions of, or in relation to, the PBAS must not disclose any information obtained in the performance of those functions to any person who isn't carrying out official functions of, or in relation to, the PBAS and, in particular, must not directly or indirectly disclose such information to—

(a) any other registered political party or candidate (not being the registered political party or candidate that requested the costing); or

(b) any Minister or Ministerial staff.

Maximum penalty: $2 500 or imprisonment for 6 months.

(6) The PBAS established in a relevant election period must provide a report on its operations to the Treasurer by 30 April in the year of the relevant general election.

(7) The Treasurer must, within 12 sitting days after receipt of a report under this section, cause copies of the report to be laid before each House of Parliament.

(8) The copy of the report to be laid before Parliament must set out in a prominent position the date on which it was presented to the Treasurer and if the report is presented to the Treasurer after the end of the period allowed under this section, the report must be accompanied by a written statement of the reasons for the delay and the statement must be laid before each House of Parliament together with the report.

(9) In this section—

relevant election period means the period commencing on 1 July in the year immediately before a general election of members of the House of Assembly is held in accordance with section 28(1) of the Constitution Act 1934 and ending on the day of that general election (and includes, if this section comes into operation during a relevant election period, the remainder of that relevant election period).

11B—Transitional provision

For the avoidance of doubt, Part 3A of the Public Finance and Audit Act 1987 (as inserted by this Act) applies (on and after the commencement of Part 3A) for the remainder of the relevant election period that commenced on 1 July 2021.

I note the somewhat gratuitous reference the Treasurer made to this maybe costing the taxpayers up to $1.5 million a year, which is a tiny fraction of the portion of political government advertising that the Hon. Robert Simms' amendment seeks to rein in during an election campaign.

It is somewhat ironic and quite frankly outrageous that the Treasurer rails against a relatively small amount of money in the context of the whole South Australian budget, which seeks to ensure that we can have a greater deal of accuracy when it comes to the contest of ideas that is involved in an election by having a parliamentary budget office, but thinks it is just fine and dandy and a great idea to allow completely unrestricted government advertising that is not of a functional nature during the relevant date of an election campaign as defined by the Electoral Act.

I note the Treasurer indicated that he was not prepared when he was shadow treasurer to put his costings under scrutiny from a parliamentary budget office. Fine, he does not have to, but this is something that existed at a state level at the last state election and it is something that for quite some time has existed at a federal level. Regarding the Treasurer's somewhat disingenuous arguments about the relative cost of this when compared to the cost of other things that this is seeking to do, this will be many times over offset by the reining in of government advertising. It is a somewhat ridiculous suggestion from the Treasurer.

The Hon. R.A. SIMMS: On behalf of the Greens, I rise in support of this amendment from the Labor Party. Having been in the federal parliament, I can attest to the value of an independent parliamentary budget office. Indeed, my colleagues, prior to me starting in the Senate in the Greens, had negotiated this outcome as part of the power sharing arrangement with the previous Labor government, I understand, and the outcome was a very good one: an independent body that provided advice to all political parties on their respective policy priorities.

That information could be made publicly available so that every member of the community knew that the ruler had been run over the policy priorities of the respective political parties. I know the Treasurer seems to have a view that, unless you have the deep pockets to be able to fund Deloitte to do a financial audit of your policies, you should not be able to have these costed. That is not really very fair.

That is not a fair thing for our democracy that unless you have the deep pockets of the Liberal Party, funded by large corporate donations—unless you have those deep pockets, you do not have a right to have your policies costed, and that there is no independent body that can look over the policies of the political parties heading into an election.

It has always struck me that not having this in South Australia has been a real omission. I understand it was in place for a short period of time and was then discontinued. As we head into the election period, it is only fair that all parliamentarians should have access to that vital resource, and it is only fair that members of the public should have confidence that there is an independent body that is running the ruler over the policy priorities of the different political parties rather than saying, 'Let's just outsource that work to the corporate sector. Let's just send it all off to wealthy corporations, rather than have it sit under the public purview.'

The Hon. F. PANGALLO: I rise to say that SA-Best will be supporting this amendment. Just to echo the words of the honourable Greens member, I think it is appropriate that we do have this service and that it is available to all members to be able to scrutinise policy costings going into an election period. Again, I endorse the words of the Hon. Robert Simms and say that we will be supporting this amendment.

The Hon. R.I. LUCAS: The government is strongly opposing this particular amendment and will continue to do so. We will seek to divide on the amendment as well. The Leader of the Opposition's comments I think probably better relate to the government advertising provision, so I will defer my response to his comments to that particular clause.

In relation to this provision, our position is as I outlined earlier; that is, the Australian Labor Party, through this particular device, are seeking to have the taxpayers of South Australia fund the costing of their election promises. I think, having seen some of the purported costings they have issued on some of their policies, there might be some in the community who might think that this may be of benefit, but the issue is frankly whether or not the taxpayer should be, at this particular time, funding the Australian Labor Party to do something that they should fund themselves.

It is not as if they can cry poor. They are very generously funded by the shoppies union and most other unions in South Australia. The Electoral Commission makes it quite clear that they have access to considerable resources in terms of being able to fund the costing of their own policy documents. They have clearly, I assume, used somebody or some organisation thus far to fund the costing of the promises they have announced over the last few days, because the parliamentary budget office obviously has not existed and they have, nevertheless, issued purported costings of those documents.

As I said, the government will be opposing this. I am pleased to say that the House of Assembly rejected this amendment; that is, the government members and a number of the crossbench members defeated this particular amendment in the House of Assembly. Should it pass the Legislative Council, I would hope that the House of Assembly would maintain their position in relation to this amendment. So for the reasons that we have outlined, we continue to remain strongly opposed to this particular provision.

The Hon. J.A. DARLEY: For the record, I will be supporting this amendment.

The Hon. T.A. FRANKS: I rise to support this amendment, and I note the words of my colleague the Hon. Robert Simms in support of this measure. A parliamentary budget office is something the Greens have long held to be of value not just to our side of politics, as in minor parties or coalition government minor parties, as we are in the ACT.

At a federal level, of course, it operates day in, day out, and we have the ability to cost policies and pronouncements, regardless of an election cycle. In the last election it was the Weatherill government that made it possible that, finally, South Australia had a parliamentary budget office, and that was something that we welcomed and that we used. We may have found a few areas to be not as effective or good as we would have liked, and we would see that the way to address that, though, is not to abolish the parliamentary budget office but to enhance and improve it.

I am very surprised that the Hon. Rob Lucas comes to this place so opposed to such a facility. I guess 39 years in parliament does change your views somewhat, and perhaps if he were in a minor or opposition party he may have very different views. Indeed, he did have very different views. I refer members to his parliamentary travel report of his visit to the United States back in 2007—26 December 2007 through to 4 February 2008, some 41 days in the United States, some 12 recommendations, some 27 very well spaced, large-fonted words in this report. Recommendation No. 4 reads:

A number of state legislatures have provided independent professional advice in relation to budget issues. Individual legislators need access to this sort of expertise to try and redress the power disparity or knowledge disparity between the executive arm of government and the legislature.

That is recommendation No. 4. Recommendation No. 5 does warn of the dangers of abolishing the Legislative Council, I am happy to see. I also note that recommendation No. 8, although we have now visited this well and truly in this debate, notes that:

The Auditor-General's office in Ontario in the government advertising department is a worthwhile model, although not perfect to consider replicating in South Australia, to try and reduce the extent of political partisanship in government advertising.

A worthy goal that, when in opposition, the now Treasurer held firm. When one is in a minor party or an opposition party, one does not have access to not just the processes that would be afforded to us by a parliamentary budget office and the costings, but of course to that government advertising. To make our democracy fair and accountable in this state, I urge all members of government and opposition in this chamber to now support this particular amendment.

The Hon. R.I. LUCAS: Just quickly in relation to it, I am not sure whether they still exist, but in legislatures like the Washington legislature and others the access to budget and finance-related information is that the legislatures there actually have a state economist who does modelling in terms of job implications. So they have access to, in essence an economist—it may not be the right word—who has access to modelling.

If an individual member in the state legislature there wishes to model the impact of particular policies on jobs, and what the impact might be on the economy, they are in a position to provide feedback in relation to that or to second-guess the job impact modelling that might be done by the incumbent government of that particular state legislature, so it is not exactly the same model that is being proposed here in relation to access to budget and finance information.

The model in some of the state legislatures does merit consideration in relation to their particular circumstance, where you have a whole series of virtually independent members all seeking their own personal bills. The discipline of parties, at least at that particular time—which was 15 or 16 years ago; I suspect it is still the same, I do not know—was almost non-existent in some of these state legislatures, so some of the individual members of parliament came up with their own bright ideas, and they went on to get modelling done to announce their particular bill or proposal, which they had some support and assistance for.

The Hon. T.A. FRANKS: I note that the Treasurer has now been in government for 1,319 days and he has had 1,319 days to have brought that model to this place. The model that we have before us is the one that we will vote on today.

The committee divided on the new clauses:

Ayes 13

Noes 8

Majority 5

AYES
Bonaros, C. Bourke, E.S. Darley, J.A.
Franks, T.A. Hanson, J.E. Hunter, I.K.
Maher, K.J. (teller) Ngo, T.T. Pangallo, F.
Pnevmatikos, I. Scriven, C.M. Simms, R.A.
Wortley, R.P.
NOES
Centofanti, N.J. Girolamo, H.M. Hood, D.G.E.
Lee, J.S. Lensink, J.M.A. Lucas, R.I. (teller)
Stephens, T.J. Wade, S.G.

New clauses thus inserted.

New clauses 11A and 11B.

The Hon. R.A. SIMMS: I move:

Amendment No 1 [Simms–1]—

Page 7, after line 20—Insert:

Part 5A—Amendment of Public Finance and Audit Act 1987

11A—Insertion of section 41B

After section 41A insert:

41B—Approval of Auditor-General required for certain government advertising expenditure

(1) The principal officer of a government agency must ensure that the agency does not expend or incur expenditure of more than $10,000 on government advertising published or caused to be published by the government agency during a relevant election period, unless the government advertising is approved by the Auditor-General or by resolution passed by both Houses of Parliament.

(2) The Auditor-General may only grant an approval for the purposes of subsection (1) (a section 41B approval) if satisfied that the government advertising is necessary for the proper functions of government.

(3) For the purposes of subsection (2), government advertising will be taken to be necessary for the proper functions of government if the Auditor-General is satisfied that the primary purpose of the government advertising is to communicate information relating to the following:

(a) public health and public safety;

(b) road and public transport works or interruptions;

(c) emergencies;

(d) legal or statutory matters;

(e) electoral material published under the authority of the Electoral Commissioner;

(f) the engagement or employment of persons in the service of the government;

(g) attendance at an event;

(h) tourism;

(i) auctions and other sales of property, goods and services;

(j) courses at tertiary educational institutions.

Note—

Government advertising for the purposes of generally promoting government programs or achievements, government spending or the future delivery of infrastructure projects or initiatives is not to be regarded as necessary for the proper functions of government.

(4) The Auditor-General must, within 7 days of the end of each month that falls in a relevant election period, publish a report on the details of each section 41B approval granted during the month to which the report relates.

(5) Notice of a motion for a resolution under subsection (1) must be given at least 3 sitting days before the motion is passed.

(6) In this section—

government advertising means advertising by a government agency (whether comprised of a single advertisement or a series of advertisements) and includes a promotional campaign;

government agency means—

(a) a Minister; or

(b) an administrative unit of the Public Service; or

(c) an agency or instrumentality of the Crown; or

(d) any other person or body declared under the Public Sector Act 2009 to be a public sector agency;

principal officer, in relation to a government agency, means—

(a) if the agency consists of a single person (including a corporation sole but not any other body corporate)—that person;

(b) if the agency consists of an unincorporated board or committee—the presiding officer;

(c) in any other case—the chief executive officer of the agency or a person determined by the Auditor-General to be the principal officer of the agency;

relevant election period means the period commencing on 1 July in the year immediately before a general election of members of the House of Assembly is held in accordance with section 28(1) of the Constitution Act 1934 and ending on the day of that general election (and includes, if this section comes into operation during a relevant election period, the remainder of that relevant election period).

(7) For the purposes of this section, a reference to advertising published or caused to be published by a government agency includes a reference to advertising that the government agency pays for or arranges the placement of.

(8) The Auditor-General may exercise the Auditor-General's powers under section 34 of this Act for the purposes of determining whether or not to grant a section 41B approval and section 34 applies as if—

(a) a reference to the conduct of an audit or review, or the making of an examination; and

(b) a reference to an audit, review or examination,

were a reference to the determination whether or not to grant a section 41B approval.

11B—Transitional provision

(1) For the avoidance of doubt, section 41B of the Public Finance and Audit Act 1987 (as inserted by section 11A of this Act) applies (on and after the commencement of section 11A) for the remainder of the relevant election period that commenced on 1 July 2021 to government advertising published or caused to be published on or after that commencement, including government advertising under a contract or arrangement entered into before the commencement of section 11A.

(2) If government advertising under a contract or arrangement of a kind referred to in subsection (1) is not approved under section 41B of the Public Finance and Audit Act 1987, the government agency remains liable for any amounts payable under the contract (as if the government advertising were published in accordance with the contract).

Mr Chairman, before commenting on the detail of the amendment that is before you, I will respond to the tabling of the letter from the Auditor-General by the Treasurer. I welcome that information. It would have been helpful to have had that provided to us a little bit earlier than it being tabled in parliament. I do want to point out, Chair, that when we were last here together, and I moved to insert this amendment and we were going to progress this to a vote, the Treasurer spoke quite passionately about how unfair it was for the matter to be sprung on him and he talked about the lack of engagement with the government around my amendment.

I was persuaded by that, as I think the crossbenchers were, and more time was provided to the government. We adjourned the debate and now we have come back two weeks later. It is disappointing to see a letter relating to the amendment being tabled in this fashion without giving anybody the opportunity to take that into consideration as part of the debate.

I will point out, though, that there is an opportunity for amendments to be made should this pass this chamber, for further amendments and finessing to occur between the houses. If there is a significant issue that needs to be addressed, there will be an opportunity to do that.

This is a fairly straightforward amendment. It is what I consider to be a very important transparency measure and really what it does is ensure that the Auditor-General is required to provide approval for advertising in certain circumstances. It adds a really important transparency measure, I think, in terms of ensuring that the Auditor-General is required to approve certain government advertising, and that is advertising in particular circumstances and during the election period.

The government may be concerned that this is going to impact on advertising that they consider to be essential. The amendment makes it very clear that government advertising will be taken to be necessary for the proper functions of government if the Auditor-General is satisfied that the primary purpose of the government advertising is to communicate information relating to the following, and these things are stipulated.

I will not read them all, but they relate to public health and public safety, road and public transport, emergencies, legal or statutory matters, electoral material published under the authority of the Electoral Commissioner, and a range of other things. If anything has been missed that is considered essential, I am sure that that can be added in as part of the engagement between the two houses.

It is important to understand why this is so vitally important, and I think the Treasurer has talked a lot about his concerns around the spending of taxpayers' money in terms of setting up an independent budget office. He must then be aghast at the eye-watering advertising bill of his Liberal government, because it has been really quite outrageous.

It is worth remembering that, back in 2019, the Government Communications Advisory Committee was formed in July and it scaled back its public reporting on communication campaigns cost and effectiveness by the year 2020. As of June 2020, that body had published just one evaluation report for the financial year and in the previous financial year the government had reported monthly on campaigns on their costs and their effectiveness.

On 1 September 2020, this group changed its official guidelines and in addition to the rules requiring public reporting of the total cost and evaluation summary for each approved communications initiative, which was usually done after completion, the GCAC would now publish the cost of each campaign as it begins. Well, that was what was meant to happen, but the new guidelines did not specify a time frame for the reporting campaigns and therefore there was a significant lag in reporting.

Indeed, InDaily reported on this last year and it was noted that, despite numerous reporting campaigns being approved in September, there had been no reporting on the Department of the Premier and Cabinet website as required by the new guidelines. That is very disappointing.

The GCAC report for September 2020, made available at the end of October 2020, contains some information which I think is relevant to highlight here. There were at least six campaigns approved, worth a total of more than $8.8 million. The bulk of spending, more than $5 million, was for interstate and intrastate tourism campaigns, and $1.5 million was approved on 1 September for a campaign to attract New Zealand tourists.

Controversially, the government launched a $1.195 million taxpayer-funded campaign called Building What Matters, which was across various media platforms, promoting an infrastructure program in the wake of last year's state budget. That was scheduled to run until June 2021. This campaign does not explicitly include politicians, but in interviews and media politicians have referenced the campaign, a campaign that is paid for by the South Australian taxpayer.

The campaign promotes the government's infrastructure spend rather than giving direct information about individual projects. There have even been reports of cold marketing campaigns. This was reported by the ABC back on 26 March, indeed my birthday. I can tell you, it would not have been a welcome birthday present for me to receive one of these calls. According to this media report, members of the South Australian community were receiving phone calls promoting this Building What Matters campaign, a campaign funded by the South Australian taxpayer. The ABC has included an example of one of the voicemails which was left, and I will read it to you:

Good evening…I'm calling on behalf of the Premier, Steven Marshall—

it is like Amway—

and the state Liberal team to get your thoughts about the $16.7 billion infrastructure spend which will deliver safer roads, ensure that you have access to better healthcare closer to home and will deliver world-class schools for our kids.

That sounds like an ad to me. Despite the caller saying they were representing the Premier—and I am reading from the ABC here—the Premier denied any knowledge of the calls when asked by the ABC. He said:

I'm not aware of that…there's nothing wrong with going out and promoting the great work of [our] government.

That [could] be something you could take up with the Liberal Party.

It is unclear whether the call was made by a third party, who was paying for it or how the information was obtained. When asked whether or not the Liberal Party was paying for it or the taxpayer, Mr Marshall said, 'It's hard to comment because I haven't heard or seen the campaign that you're referring to.'

Quite frankly, that is simply not good enough. It is not good enough for the hard-earned money of South Australians to be wasted on PR for this state government. I can understand why they would want to be undertaking PR given the scandalous period they have faced, but it is not an appropriate use of taxpayer money and it is appropriate that this money is administered in an independent way and that there is some form of independent arbiter who can make a call on what is appropriate and what is not.

I am not suggesting the Governor-General take carriage of that—that is a step too far—but the Auditor-General is an appropriate body to take carriage of that. As I say, I note the concerns that they have expressed and that is something that can be worked through within the houses. I think this is a really important transparency measure. It is one that South Australians will welcome heading into this election and I commend it.

The Hon. R.I. LUCAS: The government will be strongly opposing this particular amendment. I firstly note the hypocrisy of the Australian Labor Party on this particular issue. They went 16 years, 30 out of the last 40 years, where they did not impose any rules on their advertising. This government comes in and makes it quite clear that the excesses of the former government, where we actually had the Premier of the state, the leader of the government of the state, appearing in television and radio commercials paid by the taxpayers, would be banned. We were leading the campaign that we would ban that sort of activity by politicians in government paid advertising, and we did so.

One of the first decisions that we took was to say we are not going to abide by the standards of the Australian Labor Party, the former government, where they used taxpayers' funds to promote their politicians through paid government advertising. One of the first decisions we took was to, in essence, prevent that sort of abuse of government-funded advertising.

My understanding of the voicemail to which the Hon. Mr Simms has referred is that it was a Liberal Party funded voicemail, so I am not sure what relevance it has in relation to government-funded advertising.

The Hon. K.J. Maher interjecting:

The Hon. R.I. LUCAS: But if the Liberal Party is promoting a $16.9 billion record infrastructure spend, the Liberal Party is entitled to spend its money as it wishes. It cannot be inferred in any way in this particular debate that it was actually taxpayer-funded advertising. It was actually the Liberal Party, on my understanding, from the claimed quote from InDaily or the ABC in relation to the voicemail. I am certainly unaware of taxpayer-funded voicemails of that particular nature in relation to that particular campaign. I am having my office check that at the moment. If there is anything different, I will put it on the record, and I will happily do so.

My familiarity with the voicemails that the Liberal Party fund—and Labor Party fund with their own money, and they are entitled to—is that is the type of voicemail that they would use. There was nothing in that voicemail that was not publicly available information. The total funded public infrastructure program of a record, then, $16.9 billion and now another record $17.9 billion was publicly announced as part of the budget. Every Tom, Dick and Harriet would have been aware of that particular number when it was released, so there was nothing confidential or conspiratorial in relation to the access to that particular information.

In relation to the evaluations from GCAC, I notice that the Hon. Mr Simms referred to reports back in June, August and September. I would invite him to actually look at the record. We are actually now in October 2021. I noted that his office did not actually look at what has been done on a monthly basis ever since then. We have been true to what we indicated, which was monthly reporting. I cannot remember now how long the GCAC took—it was 12 months or 15 months or so—to be fully established. We inherited the former processes of the former government. We continued with those for a period of time until we established GCAC with its guidelines.

The honourable member is correct that we did amend the guidelines to provide even greater transparency when they were highlighted, I think, by InDaily or a section of the media in relation to it. I cannot imagine that that should be an element of any criticism. It was actually this government doing what it said it would do, albeit it took a while for us to implement our new processes in relation to the issues.

In relation to the spending to which the honourable member referred, the massive expenditure we had, I think he said $8 million. Most of that was on tourism and tourism marketing campaigns. That was just a continuation of previous initiatives from governments, Labor and Liberal, where literally millions of dollars of taxpayers' money is spent on tourism advertising campaigns internationally, interstate and intrastate to try to generate the visitor economy within South Australia.

When international borders closed we diverted a lot of the international marketing dollars into interstate marketing and intrastate marketing, so there were massive increases in expenditure which is what has helped sustain a number of our regional tourism providers and regional tourism economies. We have advertised for people to have holidays at home rather than going overseas or interstate and a number of our regional tourism providers have benefited from that sort of advertising and will be very grateful for that sort of advertising.

As I said, the major difference between this government and the former government is that we have banned the use of politicians in our paid television and radio advertising. We have done so, unlike the former government. The hypocrisy of the Labor Party is apparent on any debate in relation to government advertising. For 16 years they lived off the capacity to be able to spend taxpayers' dollars advertising their own politicians and, indeed, other government programs and others through their particular period. As soon as they end up in opposition again they say, 'This is unfair. We did it for 16 years but now there is a Liberal government they shouldn't be allowed to do it in the future.'

The other thing the Hon. Mr Simms referred to was that the Building What Matters campaign did not actually provide any information. Again, I correct the honourable member. The Building What Matters campaign referred people to a website to, in essence, highlight to prospective businesses in relation to tenders for government projects. It referred people to a website so that they were aware of the projects and programs within their local community, so that they were aware of what their hard earned dollars were being spent on in their particular community.

There has always been a view that taxpayers' money is being spent somewhere else and not being spent to benefit either the north or the south, or the east or the west, or the country. A key part of that campaign was to divert people to a website where they could go to the north, the south, the east or the west and look at what was actually being spent—their money—in terms of where it was being spent and providing information in terms of where it might be spent.

In the earlier campaigns, on my recollection, in relation to people looking for work—that is, apprentices, trainees, tradies and others who might be seeing people who are tendering for government contracts or particular contracts—there were linkages to websites that would allow them to do so.

It was driving people to websites, to provide information of various colours and persuasions to either people who wanted to bid for contracts, to people who wanted to know where their taxpayers' money was being spent and, thirdly, those who might be looking for jobs in a particular industry sector or area or perhaps even with a particular company. That, in part, was one of the key performance indicators of the Building What Matters campaign.

I want to return to, I guess, some of the practicalities of this particular amendment. It is very sad that the Australian Labor Party did not even contemplate consulting the Auditor-General before seeking to dump him in the deep end in relation to these particular contentious provisions. There is probably no other more controversial area of government expenditure than government advertising.

To seek to embroil the independent Auditor-General in all of that controversy in the nine months leading to the election and, as he says in his letter, particularly at a time when (between July and October-ish) he is trying to bring all of his main work for the whole year to a head in relation to the work that he has to do to present the audited accounts to parliament for all the statutory authorities, government departments and agencies, together with his other observations—what he is saying is, 'Well, if you are going to dump this on me, I'm going to have to divert resources away from that.'

The Hon. K.J. Maher: Well, you provide him more resources.

The Hon. R.I. LUCAS: No, he is working within a budget. He will have to divert resources away from that to concentrate on this little meandering of the Australian Labor Party and others in relation to these particular issues. The Auditor-General also highlights I guess some of the dangers in relation to this.

If I can just highlight sometimes the urgency of government programs, which will be imperilled by this amendment should it be passed, during the worst parts of the COVID outbreak last year—in and around, I am assuming, that second quarter of last year, maybe moving into the third quarter—SA Health were moving to change their government-funded advertising campaigns, and let's be honest about this: advertising agencies and budgets don't get out of bed for $10,000, so we are talking about a very low level of expenditure in terms of what is going to be caught up by this.

SA Health in particular on a day-to-day basis were amending and altering their government-funded advertising campaigns. Through some weekends, as the chair of GCAC I was having to approve up to midnight on a Saturday night changes to government-funded advertising campaigns which were commencing late on a Sunday or on a Monday. These were urgent health messages that needed to be got out to the community at either the depths or the height of the pandemic, however you want to portray that. They were urgent health messages that needed to be transmitted and publicised, and these were changing on a regular basis.

What the prosecutors of these particular amendments do not realise is that you do not actually approve a government advertising campaign and then that is it. You actually approve broad concepts. Not just in relation to COVID but particularly in relation to COVID, on any number of occasions at very short notice they come back and actually say to you, 'We're now having to change the messaging in relation to this. We need a new authorisation or a new approval. We've got another round of commercials.' A simple ad in the weekend or weekday newspaper might cost more than $10,000, a full-page ad. So every one of those would have to go off for an authorisation to the Auditor-General.

Good luck in getting the Auditor-General and his staff working all weekend at short notice with urgent deadlines to approve every expenditure over $10,000, or indeed any other independent person. Maybe in between the houses the Hon. Mr Maher might suggest that he might be nominated as the independent arbiter of this, and he will make himself available to make a judgement.

But a mere full-page ad is in most circumstances likely to cost more than this $10,000 limit, so any new element or extension of a government advertising campaign under the proposed definition and the arrangement would be going back to the Auditor-General, seeking approval. The Auditor-General highlights the processes in his letter. He says he is required to undertake, under section 34 of his act—he highlights all his powers under section 34; I will not read them again. His comment then is:

These are necessary powers for the Auditor-General.

These powers are unlikely to be reasonably exercised within the timeframes provided in the Bill, monthly reporting and certainly before an election.

All audit work and reporting is subject to procedural fairness. This means giving reasonable opportunity to those subject to audit.

What he is saying is: he is required under section 34 of his act to exercise his powers in a certain way. He has to give procedural fairness to everybody. So he comes along, the health commissioner says, 'I need urgent approval for a $50,000 campaign to change the focus of the COVID response or to roll out vaccinations in a particular area. We need an urgent response, because we need them to be run by Monday,' and this is on Saturday or Friday or whatever it is. What he is saying is if he then decides quickly, 'Well, I'm not going to do it' or 'I don't approve it', for procedural fairness he has to go back to the particular agency and provide them with an opportunity to put an alternative point of view.

Having been engaged with the Auditor-General in relation to some big government procurement operations I can say that the Auditor-General does take the whole notion of procedural fairness very seriously, as you would expect them to do—this is not this Auditor-General, it was the previous Auditor-General. Whenever they take a decision which might be opposed by somebody, they do adopt those provisions of procedural fairness under section 34 and related provisions as well.

This is just a recipe for bringing a whole series of important government information campaigns to a grinding halt. As the Auditor-General says on page 3 and 4 of his letter 'expenditure is necessary for the proper functions of government' test:

The Bill sets the standard to be applied that the Auditor-General decide if the expenditure is necessary for the proper functions of government.

He then says:

The Macquarie Dictionary defines necessary as something that is indispensable, an imperative requirement or need. This seems a difficult test to pass. It suggests that most expenditure would fail this test and the Auditor-General be obliged to assess such expenditure as improper as defined in the Bill.

What he is saying is that in the way this bill is set up, most expenditure he would have to find as improper under that particular test, and he would have to say no to it. The Hon. Mr Simms says, 'All of the public health and emergencies and legal and statutory management are all going to okay.' The Auditor-General places a question mark in relation to that. Even aside from that, the fact is before you can actually do any of these campaigns, you are going to have to go off and get an approval from the Auditor-General for any campaign which is $10,000 or more.

I cannot stress enough the changing nature of government advertising campaigns. As I said, for those who have never been there in relation to managing the detail of them—putting aside the ones that there might be some opposition to from either the Labor Party or the others, but even the ones which are hugely non-contentious or largely non-contentious—there are any number of occasions where the advertising agency and the government agency will come back and say, 'We've now looked at doing the campaign but we're now going to do it in a different way from the way that was originally approved. We now need a subsequent approval.'

They then have to load their alternative advertising materials on one of our portals and I on behalf of GCAC have to approve or not approve those particular changes. That happens on almost a daily basis. Government advertising of a non-contentious nature is being constantly changed, so road safety campaigns or campaigns trying to encourage greater take-up of apprenticeships and traineeships within South Australia in terms of our skills-based economy—all sorts of campaigns right across the board.

There have been any number of examples of what was originally approved then being changed for a whole variety of differing reasons. There have been examples where GCAC, or I on behalf of the GCAC, have not approved them, one or two of which have been the focus of questions in this chamber in relation to not approving particular campaigns proceeding, some of which had advanced in terms of the early work that the departments and agencies had done on those particular campaigns. So to place an Auditor-General or Electoral Commissioner or I am not sure who else the Labor Party might come up with in the middle of all of this in the middle of the last nine months leading into an election period is just a recipe for chaos.

For all those reasons, the government will be strongly opposing this particular amendment, as we have opposed the others. I just have to say, if this bill emerges as it looks like emerging, with these three amendments added to it, it is not my intention that the government would proceed with the budget measures bill, and some of the good elements of the budget measures bill would have to be deferred until a new parliament and after the election, which would be sad because these elements were never elements of the budget measures bill in the first place. They have been added into it for the reasons the Labor Party and others can explain. They are not there as actual budget measures outlined in our particular budget.

Certainly, my view is this is so inimical to the role of the Auditor-General. It is so unworkable. Even if they find somebody else to purport to be independent and to undertake this particular role, it would just grind government-required advertising to a halt at a critical period, particularly as, with the very good news today in terms of potentially opening up borders, we are going to be confronting again the increasing number of COVID-19 cases in our community. There is going to be the need for ongoing messaging in relation to that particular issue.

If the experiences of the last 18 months are anything to go by, there will be the need for urgent decisions made at very short notice in relation to getting the right messages out into the community, and this particular process that has been outlined here will be a recipe that will add to the chaos in terms of trying to get sensible communication messages out to the electorate, if they are all going to have to be subject to going off somewhere for somebody else to decide whether or not they should be authorised.

The CHAIR: Before calling the Leader of the Opposition, the Hon. Mr Wortley, in question time I asked you to remove the sign and I then later asked you, I think, to take it off your desk when you had put it in a different place on your desk. Subsequently, it was pointed out to me that you had it on display on the seat next to you. On all those occasions I have asked you to stop that, and the sign has re-emerged on top of the cushion next to you. I am going to ask you to desist from that action. If not, you will bring it to the table and we will look after it here and give it back to you at the end of the day.

The Hon. K.J. MAHER: The Treasurer talks about hypocrisy. In the lead-up to the last election and certainly a long time before that, there would barely have been a day go by when the then shadow treasurer was not out in the media whingeing, making points about what he saw as unnecessary government spending on a whole range of things, including advertising. For the Treasurer to come in here now and say, 'I complained when they did it, so I should be able to do it,' is the height of hypocrisy.

This will not just apply for this election; this will apply for every government of every stripe from here on in. If it is, in 15 years' time, a Greens and SA-Best coalition government after they have won seats in the lower house and between them have formed government, it will apply to the Franks-Pangallo government of the day if that is what happens. It will apply to a Labor government of the day if that is what happens. It will apply to a Liberal government of the day if that is what happens.

I will just quickly reflect. I think there are ways to sort, to fix and possibly avoid completely some of the problems the Treasurer has raised concerns about. In terms of sorting what we already have, I am sure that procedures could be looked at. The Treasurer said, 'The Auditor-General won't be able to do everything else the Auditor-General does because their budget won't allow it.' Well, Treasurer, provide the budget for what parliament says someone is supposed to do. It is the height of ridiculousness for the Treasurer to come in here and purport to tell this chamber what laws ought to be passed, because he is not prepared to fund them. Treasurer, mate, that is not the way it works. The parliament makes the laws and the government of the day gives effect to and funds what the parliament says.

The Treasurer talked about—and I made the point before—the fact that we cannot do this because concerns have been raised by a statutory officer. Well, Treasurer, you would well remember your support of an ICAC reform bill, notwithstanding what that statutory officer had to say. Treasurer, it was your government, your Attorney-General, that took that bill and had carriage of it in the lower house, notwithstanding what that statutory officer had to say about it at the time.

The Treasurer quite rightly raised concerns about the need, should we need, for some agility around COVID measures and advertising. Treasurer, you will have seen this chamber and this parliament stand ready to assist and support the government when times have called for it. In fact, on the very duties of the Auditor-General, this parliament passed legislation that changed what the Auditor-General had to do and the time frames in which the Auditor-General had to do it, with that in mind.

You have seen this parliament stand ready to make sure that, if legislation needs changing because of the very nature of COVID, we have. I can assure you that we will continue to do so in the future if that is what is warranted and needed. Come to parliament and say that the changing nature of the emergency we are facing requires these legislative changes, and we will consider it. We have done it for the Auditor-General before. We have done it for the requirements of the Auditor-General before, and I am sure if needed we can do it again.

If you are worried about parliament not sitting when it might be needed as borders open up, fine, do not prorogue parliament, leave open the possibility that parliament can come back in December, in January and in February. If that is a problem, we stand ready to come back here to take our places in parliament and make the changes necessary if that is required because of where we are in a COVID emergency.

We have already talked about, and others have mentioned, the possibility of fixing it between the chambers if there are concerns that cannot be overcome by sorting it, as I have talked about. Then we stand ready, as I am sure the crossbenchers stand ready, to participate in the debate about fixing it as we go through the chambers.

The final one is: Treasurer, you can avoid it. The provisions in the amendment—it is not only the Auditor-General, there is an either/or here. The procedures have been outlined, and the Treasurer has read out the Auditor-General's comments, or a resolution passed by both houses of parliament.

Treasurer, you do not have to have the Auditor-General involved whatsoever. That will be your choice—your choice and the government's choice to involve the Auditor-General—because you have decided not to have a resolution from both houses of parliament. I am sure we can look at sorting it. If there are elements that need addressing between the houses, I am sure we can fix it, but it is within your power to avoid it completely.

The Hon. F. PANGALLO: I rise on behalf of SA-Best to say that we will support this amendment, albeit with some caveats. I acknowledge the Treasurer's comments and the letter from the Auditor-General. I only saw it just before I came into the chamber; I did not have much time to absorb it, it came in so late. However, SA-Best has enormous respect for the Auditor-General, its independence, the work it has carried out, and we certainly take note of what his comments were. But I agree with the Hon. Kyam Maher, this is something that can be resolved between the two houses.

Over the years, there has been a lot of ambiguity on what constitutes legitimate government advertising and what can be disguised as a blatant promotion of the government, particularly when they go into election periods, as we are now. There has been a blur in the past, and I can see how it has crept in with this government, particularly the fact that over the last couple of years we have had to endure a pandemic, and that obviously has limited the scope of what governments have been able to do.

I think one of the most in-your-face examples of this ambiguous advertising has been what I have seen plastered over some of the trams. That is the infrastructure building projects that the Hon. Robert Simms has mentioned. Of course, ostensibly they may seem to be something that is not directly linked to the Marshall government, but when you see that you may have the radio on ABC on the morning program and Corey Wingard may be on there spouting about—

The CHAIR: The Hon. Mr Pangallo should refer to the member by his title.

The Hon. F. PANGALLO: The honourable minister, government minister, the Hon. Corey Wingard, will be parroting off a whole series of figures, as he is known to do, about all the money that the government has been spending on all these big projects. You can see that there is a juxtaposition there when you see these ads and then you hear the government, their ministers, in the media going on about all the money they are spending all over the place. I think the thing is, if it waddles like a duck, if it quacks like a duck, it is a duck. There is no doubt about that.

In saying all this, of course, Labor were maestros, prestidigitators, at this type of trickery for almost 16 years, these illusions, and they certainly used it quite effectively in their period. I am sure that we are going to see a lot more of this over the next six months leading into the election. There will probably be promotions and advertising about 'Look at the great schools that have been built by the South Australian government.'

The Hon. I.K. Hunter interjecting:

The Hon. F. PANGALLO: Yes, it is taxpayers' money, but there will be promotions for the schools build; hopefully, what is going on down at Port Adelaide with the defence build; the science and health precincts that we have; space, Premier Marshall's new frontier; Lot Fourteen, his enterprise. This type of illusory advertising definitely gives the incumbents an advantage going into an election period. I am glad to see that the amendments that have been put up by the Hon. Robert Simms certainly cover areas that would be considered necessary for advertising.

I will acknowledge the legitimate tourism spends, promotions, that have been undertaken by the government. They have been true to their word in maintaining what they spend, their monthly spend, on their website, but as for that advertising, I think I made it a point at a recent Budget and Finance Committee meeting when Mr Harrex was there. I certainly commended them on their visually attractive and effective advertising, particularly coming out of the lockdowns.

The creative in those ads was certainly quite welcome and had the desired effect, particularly in our regions, which were suffering as a result of a lack of tourism. I must say that coming from an area associated with that, I found those ads quite effective and quite slick, to be honest. I think the only exception, which I found a bit narky, was probably the 'old mate' ads.

The Treasurer covered this aspect about getting authorisations for ads at the last minute that may be required. Come on, Treasurer. Firstly, how many of these last-minute advertising campaigns need to be mounted and will fall into that category? It does not take a committee in a bureaucracy to make a quick decision. All this can be done quite quickly by people who are assigned that task to approve that advertising.

I have worked in newspapers, radio, television and magazines. I have been involved in the creation of advertising in all those areas. I have been involved in the advertising of last-minute advertising for those areas. It can be done and it does get done. The other thing that you also need to consider, if there are television ads, radio ads, newspaper ads, are deadlines.

These places also have deadlines and you actually have to say, 'Hang on, firstly, have we got the time available on radio and TV to do it? Is there the space available or what time have we got to put the ad in the newspaper?' All this needs to be taken into account by the departments that are responsible for all that.

Then, of course, you have to get to the creative side of things. These ads need to be developed, the creative needs to be expressed and produced and then you get into the production phase. All this takes time. It is not something that is done at the flick of a finger, and of course these ads, in newspapers, television, radio or whatever, are also going to require, in some cases, regulatory approval. You are going to need to get that, anyway.

I do not know what all the fuss is about, why the Treasurer says it is going to cause all these problems. I cannot see it happening. It happens every day in the real world, Treasurer. With that, SA-Best is going to support this but, as I said, with caveats. I am sure that perhaps there could well be some unintended consequences as a result of the amendment that has been placed, but I am sure that we can work something out.

The Hon. R.I. LUCAS: I think I will respond to a couple of things that Mr Pangallo has said. His version of the real world is different—

Members interjecting:

The CHAIR: Order!

The Hon. R.I. LUCAS: The real world—

Members interjecting:

The CHAIR: Order, leader!

The Hon. R.I. LUCAS: The real world to which the Hon. Mr Pangallo refers, which I have some familiarity with as well, does not require having to go through an Auditor-General process or a vote of both houses of parliament to get approval. It does not have to go through government communication guidelines and controls in relation to public expenditure.

In the real world, if you are a television station or if you are a particular business or company, you have to get regulatory approval, so that is consistent. It is much quicker these days than when the Hon. Mr Pangallo might have been involved and, indeed, when I was involved 10 years ago. The time lines for approval through the regulatory authorities are much quicker and shorter these days in relation to these things.

If you are in the real world, if you define the real world as being business and not being the public sector, you do not have the same requirements. That is, putting aside this issue of the Auditor-General approving it, you do not have the issue of parliamentary committees rightly asking questions about government advertising, or in parliament rightly asking questions about public expenditure, or rightly having to respond to a question from the Auditor-General.

In the real world, if you define the real world as business, you do not have those sorts of questions on a daily basis or a weekly basis being asked by the media in relation to: why did you spend your money on this, why did you approve 'old mate', or why did you approve this particular campaign, or the like? The real world, as described by the Hon. Mr Pangallo, is not the real world of the public sector and, appropriately, the various restrictions and guidelines that are applied by way of parliamentary oversight, Auditor-General oversight, media oversight, over government expenditure. That does not exist for an individual company unless they make a major faux pas in terms of their particular advertising content, and there has been the odd occasion where that has occurred.

But on a daily or regular basis, I can say, having had a similar position 20 years ago and a similar position for the last 3½ years, it is as I have described it. The Hon. Mr Pangallo may choose not to accept my description of the reality of public sector government-funded advertising and the need for quick decisions on a regular basis. As I said, he may choose not to accept my description but I can only say they are the facts in relation to my experience of the last 3½ years.

It is not something that I have manufactured. The examples I have used of the need at midnight on a Saturday night of approving new government website content or a change to a television commercial which is going to air Sunday evening or Monday, is a statement of fact. As I said, the Hon. Mr Pangallo may choose not to accept that it is, but it is a statement of fact.

The CHAIR: I am getting close to putting the question, but I will give the Hon. Mr Simms the final say.

The Hon. R.A. SIMMS: Just very briefly, when one considers the real world, and that is if one defines the real world as being outside the rarefied environment here in the parliament, if one considers the real world and what people in the real world think—that is, taxpayers and the electorate—I think the view they will hear very loud and clear is that they want to see maximum levels of transparency and accountability in relation to these sorts of measures.

I think, in that context, what is being proposed is really very sensible. I recognise that there are some things that need to be ironed out, but the sky is not going to fall in. Indeed, it would be a really exciting opportunity for us to put in place something that exists beyond this parliament into the future, irrespective of who is in government. I think that would be a really good win for transparency in our state.

Ayes 12

Noes 9

Majority 3

AYES
Bonaros, C. Bourke, E.S. Franks, T.A.
Hanson, J.E. Hunter, I.K. Maher, K.J.
Ngo, T.T. Pangallo, F. Pnevmatikos, I.
Scriven, C.M. Simms, R.A. (teller) Wortley, R.P.
NOES
Centofanti, N.J. Darley, J.A. Girolamo, H.M.
Hood, D.G.E. Lee, J.S. Lensink, J.M.A.
Lucas, R.I. (teller) Stephens, T.J. Wade, S.G.

Remaining clauses (12 to 14) passed.

Long title.

The Hon. K.J. MAHER: I move:

Amendment No 2 [Maher–1]—

Long title—After ‘Payroll Tax Act 2009’ insert ‘, the Public Finance and Audit Act 1987’

It is consequential on the amendments that we have passed already.

Amendment carried; long title as amended passed.

Bill reported with amendment.

Third Reading

The Hon. R.I. LUCAS (Treasurer) (17:38): I move:

That this bill be now read a third time.

Bill read a third time and passed.

The PRESIDENT: The Hon. Mr Wortley, that needs to come to the table now. I am not going to tolerate the displaying of signs. I have asked the opposition to dispense with that and this is now probably the fifth occasion. That is defiance of the Chair, and the former President should know better.

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