The Hon. Rob Lucas MLC

The Hon

Rob Lucas MLC

Treasurer

Speeches

Budget and Finance Committee

Wednesday, 19 October 2011

BUDGET AND FINANCE COMMITTEE

The Hon. R.I. LUCAS (17:41): I move:

That the report on the operations of the Budget and Finance Committee 2010-11 be noted.

In speaking briefly to this report, I firstly thank the hardworking members of the Budget and Finance Committee, both current and past (over the 12 months we have had some changes in committee membership), and also the hardworking staff working to the committee.

It is a hardworking committee: I think it met on 23 occasions during the financial year 2010‑11, generally on a fortnightly basis, with a break during the summer break. The work of the committee has continued largely in line with its work over the first two or so years of its operation. It continues to seek to hold government, government departments and public servants to account in terms of budgets and finance-related matters.

As one example, in just the last two months it was the work of the committee that brought to light the significant problems, or scandal, in relation to the purchasing of printer cartridges in government departments and agencies. Public servants were purchasing printer cartridges at inflated prices, with taxpayers' money obviously, and at the same time receiving personal benefits—such as vouchers for the purchase of goods from Coles-Myer outlets, Harvey Norman outlets, Liquorland, JB Hi-Fi and a variety of other retail outlets—being provided through the particular suppliers.

This was first raised just in September with the Department of the Premier and Cabinet. The chief executive of that department—the Premier's own department, I note—Mr Jim Hallion, indicated that he was unaware of any such practice within his department. After the meeting, the Budget and Finance Committee went back and looked at the evidence that had been raised in the committee meeting. One staff member was suspended, and the matter was referred firstly to the Crown Solicitor's office, then to the police and the Auditor-General.

Subsequently, we have become aware in evidence only in the last week that in the Department of Health there have been four further examples of similar problems, with possibly one staff member having resigned and certainly at least three staff members being suspended pending further inquiries in relation to the matters that have been raised. I said on the first day after the budget and finance meeting to interested members of the media that it was my view at that time that it would not be limited just to the Department of the Premier and Cabinet. It was highly likely that a number of other government departments and agencies would discover similar problems within their own departments and agencies. Thus far, the Budget and Finance Committee has established two such agencies and I am sure that, over the coming period, there will be revelations of further problems with other government departments and agencies.

There is an issue that the current investigations are limited to eight related companies from Victoria because those companies were identified in the Victorian Ombudsman's report and in the West Australian crime and conduct commission report. The current inquiries by departments are related to invoices from those particular companies, but there are other interstate companies and, indeed, some South Australian-based companies that do offer these similar incentive schemes, and so the potential does exist for similar problems which relate to companies other than these eight identified Victorian-based companies and the current investigations of course will not establish whether there are concerns or problems there.

That is why a wider, more comprehensive inquiry involving the Auditor-General is essential, and I must admit that I was extraordinarily disappointed to look at the Auditor-General's Report yesterday (which was tabled) and there is no mention at all of this particular scandal which has obviously been going on for a year or two within government departments and agencies. I would have thought that, given the number of tomes or volumes that the Auditor-General tables in terms of the annual audit of departments and agencies, something as significant and potentially widespread as this should have been audited and reported upon by the Auditor-General's office.

It is certainly my view that, if the Auditor-General will not undertake a comprehensive inquiry, then the government, through the Treasurer, should ensure that it occurs because the Treasurer under section 32 of the Public Finance and Audit Act has the capacity to direct the Auditor-General to conduct particular inquiries.

The other argument for an independent inquiry—that is, independent of chief executives of departments looking at it for themselves—is that in Victoria, the Victorian Ombudsman went to the supply companies and got from them a list of their customers within government departments and agencies within the Victorian Public Service. I assume the Ombudsman was also able to get from those suppliers the details of those individuals who undertook the transactions as public servants who were offered and received personal benefits—or benefits because, to be fair, in some cases in relation to schools, if they received a television set, an iPod or something like that, the officers identified that and they were used as an auction item for the school or were used in some way for the benefit of the school.

It was not a personal benefit taken home by the individual officer, and that of course is possible in relation to the circumstances here in South Australia. There may still be breaches of various government guidelines and only the Auditor-General could establish that, but it may well be that some of the officers may well not have taken the personal benefits home for their own personal benefit but possibly, if it is a school, they might have been kept for the benefit of the school.

Anyway, for those reasons the current investigations, which are just the chief executive officer inquiring of their own staff to have a look at invoices and whether there are problems, are certainly not sufficient. It relies on the honesty and accountability of individual officers to fess up in some cases that perhaps they have had a personal benefit and perhaps they had not revealed that at the time or subsequently when an inquiry was made. That is just one example, and there have been other examples of the good work of the Legislative Council Budget and Finance Committee. I do not intend to delay this motion by going through all of those, but I just give that as one example.

The only other point I want to make is that, when this committee was established after the 2010 election, this council passed a motion which indicated that the council supported not only the establishment of the committee but also the provision of a full-time research officer for the committee. It was my view on that occasion, and it has been my view on a number of occasions when I have previously addressed the need for a budget and finance committee, that if this committee is to continue to work and to be effective, it needs ongoing expertise available to the members of the committee.

This committee, in my judgement, will continue whether there is a Liberal government or a Labor government, and so it should. The Liberal Party's policy has been to establish it as a standing committee but, even if it is not established as a standing committee, I am sure that the non-government majority, however composed after the next election, will seek the establishment of a budget and finance-type committee in this chamber. The membership of that committee may or may not comprise members of parliament with either experience or expertise in budget and finance-related issues.

If this committee is to be effective in an ongoing way, it needs access to specialist and experienced finance staff. Thus far, the committee, even though the Legislative Council passed that motion for a full-time research officer, the government indicated that it was not prepared to provide the funding for that request, and the committee has continued to try to survive on the appointment of part-time or casual research staff.

The person we appointed on that basis at the start of this year, I think it was, was an outstanding applicant, someone from a management position within Treasury. But the dilemma is that, if all you are offering is part-time work on a casual basis, that is not an overly-attractive option for most people seeking work. It may be okay for a while for a transitional period, but for most people, of course, it is not going to be suitable.

At the moment, it is my view, Mr President, as you near the end of your period of service in this chamber—we understand that, perhaps, in October of next year, just 12 months away, one more President's dinner away before you leave—it would be a fitting—

The Hon. S.G. Wade: Crown?

The Hon. R.I. LUCAS: —flag in the sand, crown on the head, describe it as you will—if you, Mr President, were again to look at the motion which has been passed by the chamber over which you preside and which indicates support for a full-time research officer position.

In my judgement, as we come to the end of this year—we have two years, approximately—if the committee, consistent with that resolution passed, were able to advertise a two-year contract position to go through to the next election (clearly, at this stage, the committee will end at the time of the next election), the committee would have the chance of potentially attracting someone with a finance or business background, particularly finance, and, hopefully, someone with public sector finance background so that they understand public sector finances.

He or she would be able to work with the members of the committee and the committee in developing some experience and expertise and sharing that with the members of the committee over the period leading up to the 2014 election. I hope, in consultation with your members on the committee—sadly we do not have any rabid lefties on the committee, but we have at the moment two hardworking members of the right (and we know how fond you are of members of the right faction)—

The Hon. J.S.L. Dawkins interjecting:

The Hon. R.I. LUCAS: One was a former lefty, even though he is now a member of the right. He sold his soul for 20 pieces of silver and a seat in the house of the red leather. Be that as it may, I hope that, in consultation with those two hardworking members of the committee, you might seek their views on this issue. Certainly, if I was a government backbencher, I would appreciate having access to someone with knowledge of these issues who was able to provide assistance and advice.

Certainly the last Treasury officer we had for a brief period started writing some papers for the benefit of committee members: the way that the targeted voluntary separation package scheme operated, and had commenced work on writing a briefing paper for members on the capital works procurement system. There were a number of other options which would have been open to the research officer in terms of assisting the members on that committee with understanding public sector finance and the way budgets occur in the public sector, and assisting them in terms of the operations of the committee.

I conclude my remarks with a plea or request to you, sir, to further consider the expressed wishes of this chamber in relation to it. I am hoping you will be able to resolve it and that we do not have to then work on the incoming president this time next year when we speak to the next annual report. I hope you will show the vision to support the Legislative Council's request and that we do not have to leave it to the Hon. Mr Gazzola in October next year to work on him. With that, I urge members' support for the motion.

Debate adjourned on motion of Hon. Carmel Zollo.

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