25 February 2010
Mr MORRIS (Mornington) — The Public Finance and Accountability Bill, if it is passed, will change totally the manner in which the government and the public sector account to the Parliament and to the community. It turns on its head entirely the notion of the independence of the Victorian public service, and it concentrates power even further in the hands of the Minister for Finance, WorkCover and the Transport Accident Commission. It will lock in an accountability framework that is simply not up to the task.
There is lots of loose talk about outcomes, and there is lots of waffle. There is no mention of appropriate performance measures and no proper benchmarks or targets. The bill fails to address the constant changes we see in program components and the constant removal of embarrassing performance indicators — or, quite often, the lack of sensible performance indicators entirely. It does absolutely nothing to address the muddled and unaccountable structure of public administration in this state, and it ensures that the decision‑making process will be even more opaque than the entirely non‑transparent regime we currently have in place.
This bill, as the minister noted in his second‑reading speech, is the third tranche of what he described as reforms. While the rhetoric is all about improving governance and strengthening democracy, the reality is that the outcome has been almost entirely the reverse. If there is a consistent thread in all the changes this government has made, from the major changes that were made to the Constitution Act onwards, it is a clear and deliberate intent to reduce clarity when it comes to responsibility.
When it is about members of Parliament — and particularly when it is about ministers — there is a consistent approach: it is about fudging responsibility and accountability, and seeking to remove responsibility for politically unattractive aspects of portfolios. There is a refusal to accept that with office comes an obligation to deliver for the people of Victoria — or to move on.
We have seen a plethora of third‑party organisations and offices set up in this state to distance members of the government from the need to make their own decisions or, when they do have to make decisions, to provide political cover or to take the heat when things go wrong. That has been the pattern over the last 10 years.
We had the former Minister for Public Transport, who did not want to take responsibility for running a train system, blaming the operators every time something went wrong, when quite often the only person who was able to fix the issue was in fact the minister herself. We have the Minister for Police and Emergency Services, who I am happy to say does a fantastic job going around opening police stations and new fire stations — he is very good at it — but on the day we had a real crisis in this state, a day when he needed to be on the job making decisions, he was nowhere to be seen.
The bill under discussion today is entirely consistent with the form we have seen develop over the last 10 years. Some parts are good; indeed, many parts of the bill are worthwhile initiatives. For instance, presenting the capital works budget at the time of the annual budget is a welcome change — although I suspect that in this instance it is more about hoodwinking the public into thinking that something is actually happening in an election year than it is about genuine finance reform. Nonetheless, that is a good innovation. Unfortunately the bill also contains a lot of nasties. It is a totally unacceptable bill, and that is why it needs to be withdrawn and redrafted.
The subject matter of this bill is essentially dry. It is of interest to practitioners, to policy‑makers and probably to policy wonks around the state, and it is of interest to parliamentarians, but it is not of great interest to ordinary Victorians. However, what it is about — that is, the outcomes that will flow from this legislation — is of vital interest to Victorians.
What flows from the operation of the public sector financial management framework, the Financial Management Act, the Borrowing and Investment Powers Act, the Monetary Units Act and the Public Authorities (Dividends) Act is the assurance that the government of Victoria and all its associated entities operate at all times not for the good of the organisation, and not to serve the political interests of the party that happens to form the government of the day, but in the interests of all Victorians in delivering the necessary services, facilities and infrastructure in an efficient way and in a timely and effective manner. That has been the agreed position across the chamber for many years.
That is been the agreed position across the chamber for many years.
The public finance sector has faced a whirlwind of reforms since the 1970s. A huge amount of damage was done to the Australian economy by the Whitlam government in the 1970s, and it took decades to unravel it. If there was any upside to that whirlwind of devastation it was the reforms that flowed from it. In Victoria the situation was made even worse by the performance of the Cain government and then the Kirner government, and more than $30 billion of state debt. Unfortunately the state is heading in that direction again. According to the forward estimates, Victoria is going to be right back where it was so many years ago. In part I suspect those problems hastened the reforms, and they have been good reforms.
There has been the introduction of accrual accounting in the public sector, increased sophistication in budgeting and in particular, the introduction of program budgeting. There has been the incorporation of depreciation into accounts, instead of assuming that assets had an infinite life. There has been the development of performance reporting and much‑improved auditing. All of those things have changed the face of the public finance sector for the better.
When in government both sides of the house have advanced them and generally been supportive of these reforms. I was trying to remember when the first program budgets came through in the Cain era — I think 1986–87. It was a terrific advance and very helpful.
Under Premier Kennett there was the introduction of Financial Management Act 1994, the further development of accrual accounting and budgeting, and output management. However, this reform — or this so‑called reform — goes one step too far. The government cannot be allowed to politicise the public sector in the manner that would flow from the passage of this bill. We must have a budget that has clear, consistent performance measures, not the woolly nonsense that is proposed. We cannot possibly afford to further concentrate power behind the closed doors of the finance minister.
We need to review the existing power the government has to keep jacking up fees and charges without reference to the Parliament not, cement it even further. That is why this bill needs to be withdrawn, redrafted and put together in a manner that includes the good points that are in it, as I identified, but in a manner that does not go one step too far and totally politicise the public finance sector and the Victorian public service.
Legislative Assembly 25 February 2010
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