Chapter 2
Parliamentary departments and portfolio issues
2.1
This chapter summarises some of the matters raised during the
committee's hearings on the Budget Estimates 2013–14.
Parliamentary departments
Department of the Senate
2.2
The committee thanks the Department of the Senate for again providing,
in advance of the hearings, a report on recent trends in committee workload.
This report indicated continuing high levels of workload in the committee
office, and which were comparable to the levels in the previous parliament. In
response to questions on the committee office workload, the Clerk of the Senate
advised the committee that there had been a modest increase in committee resources.
In addition, moving staff and distributing work across committee office staff is
also used to address the demands of the increased and uneven workloads across
committee secretariats.[1]
2.3
The committee followed-up on what appeared to be a discrepancy between
earlier evidence of the Department of the Senate and the Department of
Parliamentary Services (DPS) concerning consultation with the Parliament House
architect on the new Senate meeting rooms.[2]
This was later clarified by DPS which confirmed that formal moral rights
consultation had been undertaken with Mr Romaldo Giurgola.[3]
2.4
Other areas of interest to the committee included the contract for the
rolling refurbishment program for furniture in senators' suites, and staff
movements and rotations.[4]
Parliamentary Budget Office
2.5
Prior to the hearing, the Parliamentary Budget Office (PBO) provided the
committee with a report on the office's key performance and staffing data. The
committee welcomes PBO's advice that it proposes to provide a report of this
nature before each estimates hearing.[5]
2.6
The committee commenced examination of the PBO with requests for an
update on staffing and workloads in the office.[6]
In response to questions concerning the PBO's access to information from
departments and agencies, the Parliamentary Budget Officer advised that there
has been a positive response and is continuing to improve.[7]
However, he noted restrictions in accessing detailed taxpayer-protected
confidential information from the Australian Taxation Office (ATO). At present,
the PBO can only obtain a one per cent de-identified sample, compared to a 16
per cent de-identified sample available to the Treasury. He further advised
that legislation is currently before the Parliament which would provide the PBO
with the same access to ATO information as the Treasury and noted that '[i]t is
important for us to have that access if our costings are going to be as
credible as the Treasury revenue costings.'[8]
2.7
The PBO was also questioned on the report, Estimates of the
structural budget balance of the Australian Government 2001–02 to 2016–17 released by the
PBO on 22 May 2013. Senators sought details concerning the timing of the
release, modelling and the peer review process.[9]
Department of Parliamentary
Services
2.8
The Secretary of DPS provided a detailed opening statement to the
committee which included an update on the finalisation of the senior management
team, the reforms to governance arrangements, and the implementation of
cultural change.[10]
2.9
The committee was advised of the trial, beginning in the sitting period
commencing 17 June 2013, of removing Hansard editors from the two main chambers
other than for question time. The Secretary of DPS explained that this would
remove the need for staff to walk to and from the chambers, and therefore
reduce overtime requirements each day by approximately one hour. There would
also be a benefit to work health and safety.[11]
Senators sought further information on the reasons for the trial, the timing of
the trial and lack of consultation with the Hansard reporters and editors who
undertake this work. The committee was advised that senior Hansard staff were
of the view that the trial was best conducted in a busy time to provide the
most effective test of this change.[12]
2.10
DPS was also questioned on the reconfiguration of editor booths in the
Hansard area to create offices and meeting rooms in order to accommodate other
sections of the department which have vacated space for staff of the PBO.
Senators again asked about the level of consultation with staff on these
changes and the Secretary advised that some consultation had occurred but
undertook to provide on notice the exact level.[13]
2.11
Given the importance of Hansard to the Parliament, the committee subsequently
undertook a tour of the Hansard offices to observe the progress of the trial
and reconfiguration of the office space.
2.12
In light of the evidence that visitor numbers to Parliament House were up
30,000 from the same period last year, the committee sought reasons on the need
for the current review of visitor services costing $245,000. The Secretary of
DPS responded:
The review we are undertaking at the moment has two elements.
One is that we have created, as part of our restructure, a new Parliamentary
Experience Branch, which will include Visitor Services staff within it. But we
are also doing a much broader review of other ways we can expand the visitor
experience in Parliament House. Included in that is looking at our arts
services programs, our event management and so on.[14]
2.13
In response to questioning about the cost of the review, the Secretary
assured the committee that:
I am very confident that we will gain revenue benefit from
this review that will more than compensate for the cost of it...
It will look at ways in which we can best structure
ourselves, but it is principally around revenue raising and ensuring that we
provide a contemporary service to people who use this building—in terms of
individual visitors but also people who attend events. [15]
2.14
One particular area of interest was the tender process for the contract
for the review of visitor services. The committee was advised that 12
applications were submitted and the tender evaluation panel made its assessment
against the documentation provided by the tenderers and no interviews were
conducted.[16]
The committee will closely monitor the outcome of this review.
2.15
The committee sought an update on the progress of completion of the
document, The
Architect's Design Intent for Parliament House Canberra: Central Reference
Document (Central
Reference Document–CRD). It was advised that, although it was viewed by
the department as a critical document, because of resourcing and prioritisation
issues, DPS has prioritised the completion of conservation management plan
(CMP). The Secretary stated:
We see a very direct link between the material that is
available in the existing central reference document, the original tender
documents, a lot of the papers and materials that were developed during the
construction period of the building, the plans we hold, and other material,
such as speeches and articles by Mr Giurgola. These all form part of the basis
of material that will be used by the consultants in writing the conservation
management plan.
If, in doing that plan, they find particular limitations in
any areas, that might be enhanced by the central reference document. We would
potentially reprioritise those particular elements. But at this stage the first
and foremost exercise is to develop the conservation management plan.[17]
2.16
As the committee indicated in its final report on the inquiry into the performance
of DPS, it acknowledges the importance of the CMP, but it reiterates its
support for the completion of the CRD.[18]
The committee will continue to monitor the progress toward completion of the
CRD document.
2.17
Other areas of interest to the committee during examination of DPS were the
transfer of information and communication technology (ICT) from the Department
of Finance and Deregulation to DPS, events relating to the 25th
anniversary of Parliament House, possible introduction of paid parking in the
Parliament House car park, recent recruitment of staff in the department, and
an update on the condition of the marble façade.
Prime Minister and Cabinet Portfolio
Department of the Prime Minister
and Cabinet
2.18
The committee revisited the topic of the newly established Australian
Cyber Security Centre and requested an update on progress. The committee heard
that the centre's board of governance has been established, a coordinator from
the Defence Signals Directorate has been appointed, and a decision on the
centre's location was expected to be made by mid-June.[19]
In relation to its functions, it was confirmed that its operations were
defensive only and aimed at protecting Australian networks.[20]
2.19
The committee sought information on aspects of the National Disability
Insurance Scheme (NDIS), including details of consultation processes between
the Commonwealth and other jurisdictions with regard to board appointments, the
processes leading to the proposal to increase the Medicare levy to part-fund
the NDIS, and progress on the finalisation of the NDIS rules.[21]
2.20
The Department of the Prime Minister and Cabinet (PM&C) was also questioned
in some detail on the case of the Australian citizens, Mr Matt Joyce and Mr Marcus
Lee, who faced charges in the United Arab Emirates. In particular, senators
sought details of briefings for, and representations by, the Prime Minister.
Questioning on this topic was covered over both days of PM&C's appearance.[22]
2.21
Senators also questioned PM&C about the processes, including
consultation with the Prime Minister, around the re-appointment of two office
holders. In the first instance, the committee sought details on the re-appointment
the Australian Electoral Commissioner, which was announced on 12 April 2013. The
expiry of the Commissioner's current term was noted as being 4 January 2014 and
questioning focussed on the timing of the re-appointment. The processes leading
to the re-appointment of the Chief Executive Officer (CEO) of the Indigenous
Land Corporation were also canvassed.[23]
2.22
A range of other topics were also pursued during the committee's
examination of PM&C, including the programs and expenditure for the social
inclusion unit; funding for independent schools under the National Plan for
School Improvement; the blocking of Australian websites under section 313 of
the Telecommunications Act 1997; security clearance processes for staff
of the Prime Minister's Office; the cost and size of the delegation to the
Rio+20 United Nations Conference; and the staffing, costs and forward agenda of
the Council of Australian Governments.
Office of the Official Secretary to
the Governor-General
2.23
The Official Secretary to the Governor-General provided a summary of the
work undertaken by the Governor-General since the last estimates hearing in
February. The committee then briefly examined the Office and focussed questioning
on the timing of the appointment of the new Governor-General.[24]
2.24
The Official Secretary advised the committee:
My office is not involved in any way in the selection of a
new Governor-General. There is no prescribed time frame for that. I think it would
be beyond my terms of reference to comment.[25]
Australian National Audit Office
2.25
During examination of the Australian National Audit Office (ANAO), the
committee canvassed issues associated with the Public Governance, Performance
and Accountability Bill 2013. The Chair noted at the beginning of questions
that the Bill has been referred to the committee and that it is general
practice not to allow questioning on bills currently before committees.
However, the Chair further advised that as the committee has indicated that it
will not be undertaking an inquiry into this Bill, questions pertaining to the
Bill would be permitted.[26]
2.26
In particular, the committee sought the Auditor-General's views about
the adequacy of the consultation period for the Bill. The Auditor General
responded:
I guess I was making the point that, perhaps in different
circumstances, some more time for consultation in respect of a draft bill would
have been, I think, helpful to increase the awareness of the proposals within
it and to bring everyone on board with the new approach. There are some good
ideas in it as well, which I mentioned. I appreciate these matters of timing
are matters for the government at the end of the day, but I was just comparing
it, essentially, with prior cases where Finance has had the opportunity to
consult more broadly on legislative provisions.
...
I think it could be made to work, and my point was that, if
we had a bit more time, it could be refined to further the objectives which the
government is seeking to achieve through the legislation.
...
...I would have thought that a further six months to allow
consultation on the specific legislation would have been desirable to get the
feedback, because there will be many bodies who will not have seen the
legislation in detail ahead of when it was introduced into the parliament.[27]
2.27
The committee also questioned the ANAO on the performance audits of
Treasury's preparation of tax expenditure statements and the methodology used.[28]
Australian Public Service
Commission
2.28
The committee pursued a range of topics during examination of the
Australian Public Service Commission, including the level of data collected by
agencies on unscheduled absences, costs associated with unscheduled absences, the
handling of a complaint by Ms Melinda Tankard Reist concerning a tweet by an officer
of the ATO, the number and trends of APS employees, employee engagement, levels
of bullying and harassment, and the Public Governance, Performance and
Accountability Bill 2013. In addition, the committee canvassed the
implementation of the recommendations of the report, Ahead of the game:
Blueprint for the reform of the Australian government administration
concerning an APS culture of continuous improvement.[29]
National Mental Health Commission
2.29
The committee acknowledged the contribution of Ms Robyn Kruk AM, the
founding CEO of the National Mental Health Commission (NMHC) after she noted
her imminent retirement.[30]
2.30
The NMHC was briefly examined on a range of issues, including the
appointment process for a new CEO, the role of commissioners, the role and
level of involvement of the NMHC in recent government mental health
initiatives, and an update on the progress of implementation of recommendations
of the national report card.[31]
Office of National Assessments
2.31
The committee questioned the Office of National Assessments (ONA) about
the convention not to release content of assessments, citing an example where
information previously sought by the committee, was not provided on this basis.
The Director-General of ONA confirmed the continuation of the longstanding
practice of successive directors-general of not commenting on intelligence
issues in public.[32]
In light of this advice, the committee then questioned ONA about its annual
exchange with the Lowy Institute for International Policy and asked whether there
was inconsistency with the practice of not releasing content of assessments.
The Director-General responded:
I understand the point you are making. I think there is a
distinction. I am not trying to split hairs here. To take the example of the
question you asked earlier, it was a very specific question about an ONA view
about a specific issue. That would go directly to the contents of ONA
assessments which are provided to the government and we would not discuss those
with Lowy in that form. We just would not.
...
We do not have discussions with Lowy about ONA assessments
and do not talk to Lowy about the analytical judgements that we are providing
to government. I will fall back upon the example I provided. It is possible to
have a discussion about the global economy and where it is headed with experts
outside of government without crossing those lines.[33]
Finance and Deregulation Portfolio
Department of Finance and
Deregulation
2.32
The committee questioned officers from the Department of Finance and
Deregulation (Finance) on a range of areas within the Budget documentation.
Clarification was sought on the expense measures figure, decisions taken but
not yet announced in the Budget, and savings expected over a 10 year period as
a result of not proceeding with the 2012–13
Budget measure, Spreading the Benefits of the Boom.[34]
The department also provided detailed year-by-year gross figure costs of the NDIS.[35]
2.33
The committee asked about the implementation processes for the new
Commonwealth Grant Guidelines which come into effect on 1 June 2013, and sought
and update on the progress on the AusGrant initiative.[36]
2.34
Referring to the department's most recent annual report, the committee
sought an explanation of the 3.1 per cent variation between the original budget
estimate of expenses and the final budget outcome (FBO) for 2011–12. This compared to the
key performance indicator of a maximum difference between the original estimate
and the FBO, on an accrual basis, of 1.5 per cent. The Secretary of the
Department advised the committee:
I can talk in general terms about what we tried to do to
ensure the accuracy of the estimates, and I think we have been through some of
this before. The way I see it is that it is basically a continuous improvement
exercise. We try and work very hard with agencies who are responsible for the
estimates to ensure that they have the best available models for modelling
expenditure. It is a particular difficult task in relation to demand-driven
programs, which generally tend to be the large ones. Those are things like the
age pension, family tax benefit and so forth. They are big programs, and very
small changes in the number of people eligible or the average rates of payments
can have very major financial consequences.
It is important to us and important to the government of the
day that those estimates be as accurate as they possibly can be. We do not
always get it right—quite clearly we do not. But we do reasonably well. We keep
working on the models. Where we see the final outcome varying from the
estimate—particularly if it is an estimate that was made reasonably late in the
piece—we would go back to an agency and say: 'Look, this model does not seem to
be predicting this correctly or close enough. Let's sit down jointly and work
our way through to see if we can improve the accuracy for the next time
around.' We do that on the big programs. That is a process.[37]
2.35
The committee also questioned Finance extensively on the modelling of
forward expenditure in relation to irregular maritime arrivals (IMAs). The
Secretary explained that it is a complicated system and provided a detailed
response to the committee. He began by outlining the cost drivers, which
include the number of IMAs already in Australia, the forecasts of arrivals over
the forward estimates, operational decisions as to how IMAs are placed in the
detention network, and the length of time taken to resolve asylum claims.[38]
He emphasised that the estimates of the number of arrivals is a volatile figure
and conceded that 'I would go so far as to say that this is the most difficult
part of the budget for us on the expenses side to estimate and get right.'[39]
2.36
In relation to the current budget, he explained:
You will notice that in this year's budget that there is a
large increase in the allocation for IMAs. That is driven by two things: the
number of arrivals—the stock that has come into the country in recent times—and
the estimate. We have adjusted the estimate for 2013–14 and 2014–15.
Also, because of this new model, we actually have a lower unit cost. So we have
higher numbers but a lower unit cost. That still gives you a big increase in
the estimate. That is basically the story.
The other bit that I should add is that because of this huge
volatility in the number of arrivals we have come to the view that it is really
not feasible—not sensible—to try and push the estimated number of arrivals out
too far. You will notice in that box that I talked about that is on page 6-50
in Budget Paper No. 1 that we have decided to move to a projection based
model. The first two years are estimates that go into the budget. The latter
two years of the forward estimates are projections. In effect, we use a
technical assumption for the last two years. The technical assumption that we
have adopted—because we are trying to get the trend for planning purposes—is
the 10-year moving average. That leads to those figures being derived for the
two latter years of the forward estimates.[40]
2.37
The committee asked Finance a series of questions on regulation policy.
Senators sought an update on the processes and progress of the review of the Office
of Best Practice Regulation handbook and were advised that the department was
on track to meet its target release of 1 July 2013. The committee also asked
about the treatment of election policies in the handbook, that is, whether they
are subject to a regulation impact statement (RIS). It was confirmed that
current arrangements would continue, where all policies are subject to the RIS
requirements, but only an implementation RIS is required for election
commitments.[41]
2.38
The Minister and Finance officers provided a detailed description of objectives
and intended benefits of the proposed reforms under the Public Governance,
Performance and Accountability Bill 2013.[42]
The committee again raised the issue of consultation processes and, in particular,
whether suitable time has been allocated for consideration of the legislation.
It was noted that, prior to the release of the legislation, there was a
30-month consultation period. The Minister elaborated:
If I had put out a draft bill without all of that
consultation and had longer, I would not get the criticism you are just making
but I would get criticism because the bill would not have been worked through a
consultative process before it was actually put out. You cannot dismiss 30
months of very detailed consultation, including on the proposition document,
which really was fining down what the bill would look like, and the broader
framework. I do not think it is reasonable to dismiss that process and just say
we have had five or six weeks on the bill. We have 2½ years of consultation on
this.[43]
2.39
The Secretary also addressed the timing of the legislation and the
impact on the commencement date:
My view is that we have about a year's work ahead of us if
the bill is passed to do the rules and go through the consultation around
that—bring it back to the JCPAA discussions and various other fora. We can toss
more resources at that, and we would if it were necessary. The other issue here
is that you really need to commence this at the beginning of a financial year,
otherwise you have chaos. It is either 1 July 2014 or it is July 2015–16, or whatever. That is
the key point: if we do not have it now, we lose a year, basically.[44]
2.40
Other areas of interest to the committee during examination of Outcome 1
of Finance included, progress of the COAG Business Advisory Forum, the budget
treatment of the Clean Energy Finance Corporation following the budget mandate
direction issued on 16 April 2013, forward estimates for the National Plan for
School Improvement, operations of the Independent Communications Committee and
details of two recent government advertising campaigns.
2.41
On the final day of hearings, the committee's questioning centred on
issues under Outcomes 2 and 3 of Finance, including requirements for
maintaining or archiving old websites, accessibility of government websites by
mobile devices, cloud computing policy and strategic direction, an update on
construction projects, parliamentarians travel entitlements, processes for
checking compliance with parliamentarians printing and communication entitlements,
and the transfer of electorate ICT service to DPS.
Future Fund Management Agency
2.42
The committee began its examination of the Future Fund Management Agency
(FFMA) with questions concerning investment performance against relevant market
performance. The FFMA reported that across its portfolio the agency was ahead
of expectations and doing well relative to market trends.[45]
2.43
The committee asked about processes leading to the decision to exclude
primary tobacco producers from the portfolio. The agency confirmed that there
was no intervention by government in taking this decision. It further advised
that during consideration of its tobacco holdings, the Board reviewed the
overall exclusions policy and determined that there would be no other
additional exclusions in addition to land mines and cluster munitions.[46]
2.44
An explanation was sought on the reason for the difference in the accounting
methodology for unfunded superannuation liability between the budget and final
budget outcome figure. It was explained to the committee the reason for the
difference in the projected figures and the ex post figures is a discount rate
issue:
The unfunded superannuation liability as at 30 June is
expected to be around $143 billion...Accounting standards require us to use the
long-term bond rate, which has been around three per cent. In looking at the
forward projections, we use the actuarially determined earnings rate on the
fund, which is around six per cent. So the variance between the final budget
outcome figure from last and the figure I have just quoted is explained in
large part by the discount rate that is being used.[47]
2.45
The committee also engaged the FFMA in discussion about its investment
policy and how it factors in differing views and predictions on the global
economy. The FFMA responded:
It is really about trying to build a portfolio that we
believe still has within it the return potential to deliver against our mandate
over the long term whilst being as protected as we can be—we cannot fully
protect the portfolio—from those sorts of outcomes. Obviously the amount of
protection that we build into the portfolio—the amount of lower risk investments
that we put in—reflects our view as to how much we believe or do not believe
that Adrian Blundell-Wignall may be right and the balance of opinion that we
strike there. But the core is to make sure that you always have a portfolio
that is as diversified as possible for those outcomes. That is really the key.[48]
2.46
The committee also raised the issue of management of conflicts of
interest, particularly in relation to senior staff leaving and returning to the
organisation,[49]
and the agency's acquisition of a share in Perth airport and the alleged
threats of legal action concerning its valuation.[50]
ComSuper and Commonwealth
Superannuation Corporation
2.47
The issue of workplace bullying within ComSuper was raised. When
questions about a specific complaint were asked, the Minister expressed concern
that estimates hearings are not the appropriate place to pursue individual
grievances. The committee then sought general details on the number of
complaints and the processes for dealing with complaints within the
organisation.[51]
2.48
Other matters raised included, the impact of the policy to increase the
tax for those earning more than $300,000 a year for defined benefits scheme
members, and management of conflicts of interest of board members with multiple
directorships across superannuation boards.[52]
Medibank Private
2.49
The CEO of Medibank Private provided a detailed opening statement which
updated the committee on current issues, including the increase of 10 per cent
in payments of benefit costs, the impact of changes to products – such as the
means testing of the rebate, the reformulation of the second brand AHM,
membership growth, the launch of Anywhere Healthcare, and the operation of
Garrison Health Services which provides services to the Australian Defence
Force.[53]
2.50
A range of topics were covered during examination of Medibank Private,
including non-health related business, the impact of the Private Health
Insurance Administration Council seeking to extend its supervisory
jurisdiction, the 24-hour nurse advice line, the Medibank community fund, and research
on mental health.[54]
Australian Electoral Commission
2.51
The committee took evidence from the Australian Electoral Commission on
a range topics, including discrepancies between donor disclosure and party
disclosure; the definition of 'associated entities' and processes for
determining if an organisation is deemed to be an associated entity,
particularly in regard to GetUp!; differing disclosure threshold amounts for
donations across different jurisdictions; an update on planning and preparations
for the federal election and referendum; automatic enrolment; the offence of
multiple voting; and the timing and processes regarding the reappointment of
the Electoral Commissioner.[55]
Senator Helen Polley
Chair
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