Government Operations Committee on May 31st, 2016

[Lembit Suur]

In relation to performance information, we have been in close consultation with our Joint Committee of Public Accounts and Audit over the last two years in developing a new performance framework for the Australian government and in trying to improve the quality of performance information that is provided to the Parliament as part of the estimates process and through annual reports.

I think it's fair to say that our Parliament is dissatisfied with the overall quality of performance information produced by the system. It wants more clarity, a better performance story, and a better idea of how public monies are being spent.

Frankly, we have struggled with providing that as a system. We have a new set of reforms that are designed to improve the quality of performance information, and to give better clarity around what is done with public money and what is achieved with public money. That will be contained in the annual performance statement, which is a new artifact in our system, if you like, which Dr. Helgeby referred to previously.

[The Chair, Conservative, Tom Lukiwski]

You have about three minutes, Mr. McCauley.

[Kelly McCauley, Conservative, Edmonton West, AB]

What's involved in these reforms? Do you believe they will make Parliament happy?

[Stein Helgeby]

The task of making Parliament happy is always evolving.

[Some hon. members]

Oh, oh!

[Stein Helgeby]

The reforms are trying to build on the PGPA. The PGPA says it's important to focus on performance and it's important to focus on risk and all of these sorts of things.

What we're doing is taking each of the key elements and building those out. We started by building out the performance side of it. We've had for 30 years various cuts of performance information, and the reforms we're making now are about recognizing the gaps, if you like, and recognizing the limitations of what we've done. We went, if I can—

[Kelly McCauley, Conservative, Edmonton West, AB]

Can I interrupt? Who's coming up with the reforms? Is it back-office folks? Is it Parliament? Is it a bipartisan committee?

[Stein Helgeby]

The origin of this wave in many ways is bipartisan. It started under a government back in 2010. It was passed through Parliament after a change of government. We've had several years of parliamentary committees looking at all of those things.

It's really a combination of recognizing the dissatisfactions that Parliament has, the complexities that we see from inside the system, and the weaknesses that the audits and other types of scrutiny have revealed. In many ways, it's navigating a path where there are different interests being brought together on the reform process, where governments of, in our case, both political persuasions have seen there's something to do here, and where Parliaments have encouraged us to do things even though they might different on the detail.

[Lembit Suur]

In our reform process, we've consulted very widely. We've spoken to our state governments, peak organizations, and the business community and major businesses. We've spoken to and consulted with academe. We've worked with our Auditor General's office. We've worked with all Commonwealth government entities to try to come up with a scheme that not only satisfies all of the players but is likely to make a difference to the way in which we work.

The Parliament has been an important partner through that, especially through the Joint Committee of Public Accounts and Audit. We would have conversations with them every two to three months about some aspects of the reforms.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Before we go to our next intervenor, Mr. Greenslade, I understand that you may have to leave in the next moment or two.

[Alan Greenslade]

Yes, in about five minutes.

[The Chair, Conservative, Tom Lukiwski]

We have eight minutes left for questions.

[Alan Greenslade]

Well, I can probably hang on for the eight minutes, Mr. Chair.

[The Chair, Conservative, Tom Lukiwski]

All right. Thank you so much for that.

Madame Ratansi, please, for five minutes.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you again.

Following up on what Mr. McCauley asked you, in 2008 Australia undertook “Operation Sunlight”, out of which there were 45 recommendations. Ten were implemented, 21 were rejected, and then there are others at play. We all want to ensure that when public money is being spent there is clarity, so I need to ask you a question on the reports you provide Parliament. How simple are they to read for a non-accounting person? Even accountants have fun reading those reports, and they have to go through their debits and credits and trying to mix things up....

Number two, what sort of transparency or level of disclosure do you provide in the reports? What is allowed and what is not allowed in terms of what the government may make decisions on?

Number three, as you know, we always face problems when monies lapse in a program or a budget. People like to use those monies; they really go into a spending frenzy. How do you ensure that doesn't happen?

Thank you.

[Stein Helgeby]

Very briefly, the information is too dense. I don't think the information is presented in a way that is simple enough. That's one of our challenges. We have a lot of stuff there that is cut so many different ways. People still struggle, and Parliament tells us they struggle, with finding what they're after. I think that's an ongoing challenge for us. One of the thoughts we have is that maybe we should embrace the digital age to make it easier for material to be discoverable in a way that Parliament and others want.

We prepare all our financial statements and all our financial material on an accounting standards basis, so we are governed by an independent set of standards set outside our requirements. That puts constraints on what governments do and can do. That's a key part of our system.

In terms of...? Sorry.

[Lembit Suur]

It's about controlling the drawdown, the spending frenzy.

[Stein Helgeby]

Yes. On controlling the drawdown, we find that the controls that Mr. Suur and Mr. Greenslade have talked about are effective at the aggregate level. We have the appropriations that lapse, and we have this requirement that you need to apply to run an operating loss. We have a daily sweeping of cash to make sure that cash isn't just sitting there for people to use. These things work at the aggregate level.

We still find a pattern of activity over the course of the year that still peaks a bit towards the end of the financial year, but largely it reflects the fact that people are cautious in the first half of the year. It's not that they're blowing the budget in the last couple of months; it's that they are being very careful in the first six months and then finding that they don't need to be as careful but rather that they have to play catch-up in the last few months. We still get some peak in spending activity towards the end of the financial year.

[Lembit Suur]

Ms. Ratansi, I might make the point that because our departmental appropriations don't lapse, the incentive to try to push that money out the door at the end of the year has disappeared. People know that they can carry over amounts from one year to the next in relation to their operating expenses.

[Stein Helgeby]

Yes, subject to the approval of the Minister for Finance.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I have a quick question then. The thing I was talking about in terms of transparency is the level of disclosure that the government makes. The Department of Finance may decide not to make that transparency...I mean, when you have disclosure. The Auditor General does not review the financial statements of the government. It always does program reviews or reviews of what monies have been sent to the programs. How does it work in yours?

[Stein Helgeby]

Our Auditor General does review and audit our consolidated financial statements each year. That's a whole-of-government document. That covers not just the budget-funded parts of government, it covers all the non-budget parts of government as well. That's a fully audited document. We have a lot of fun, as you would, in any audit process any given year.

I think it is a key assurance mechanism in our system that the Auditor General goes down to that level and not just into programs.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Our final three-minute intervention will come from Mr. Weir.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thanks again.

A difference between the Australian and Canadian budgetary process is the role of the Senate. You have an elected Senate that enjoys a high degree of democratic legitimacy. The Canadian Senate does not enjoy the same legitimacy. Some of us believe it should be abolished. Even those of us who want to keep it and reform it I don't think would advocate that it should play a major role in our budgetary process.

For the sake of comparison, I wonder if you could explain what role the Australian Senate plays in your system.

[Stein Helgeby]

The Senate formally has a power to reject some of our annual appropriation bills. That's obviously an extreme situation. It only happened once, in 1975, when it caused a constitutional crisis. But that power exists. It also has the ability to modify some others. On the whole, the primary role of the Senate is a scrutiny role. We all enjoy, as officials, turning up three times a year to be intensively grilled on our particular topics by Senate committees.

At budget time, the Senate sits in committee form for two weeks, going through everything that's in the budget, or everything they want to take an interest in. They do that again toward the end of the year, about November, and they do it again in February. They have a very strong role in scrutiny. Effectively, that is the Senate being able to ask questions of officials directly. While representative ministers are there, very often the attention is in the direct interrogation or the direct questioning by Senators of individual bureaucrats about what they are up to.

That's a very strong role, and it is one that has long standing in our system.