Posted 02/06/2014 by Philip Hamilton
Since the report of the National Commission of Audit and the handing down of the government’s Budget 2014‒15, media coverage has highlighted measures that will reduce the number of government bodies and the number of public servants.
Less well-known is that, from 1 July 2014, the financial and reporting framework applicable to government bodies will undergo its most comprehensive overhaul since 1998. The Parliament’s Joint Committee of Public Accounts and Audit (the JCPAA) has described the new framework as ‘a significant initiative, aimed at encouraging fundamental cultural change in the way government does business.’
The foundation of the new framework is the Public Governance, Performance and Accountability Act 2013 (the PGPA Act), which was given Royal Assent on 29 June 2013. The substantive provisions of the Act must come into effect on 1 July 2014, replacing the existing models for financial management established through the Financial Management and Accountability Act 1997 (the FMA Act) and the Commonwealth Authorities and Companies Act 1997 (the CAC Act).
The Department of Finance has foreshadowed that implementation of the PGPA framework from 1 July 2014 will require the enactment in June of five bills for the purposes of minor amendments, transitional and consequential provisions, and appropriation modifications.
The first of these, the PGPA Amendment Bill 2014 (the Amendment Bill), was tabled in the House on 29 May 2014. The government has noted that provisions in the Amendment Bill include:
- an amendment to put beyond doubt the continuing powers of the Auditor-General to conduct a performance audit of a Commonwealth entity at any time;
- amendments to correct drafting errors;
- technical amendments to improve the operation of the PGPA Act's provisions as a result of more detailed consideration since June 2013; and
- adjustments to ensure that the rules that support the PGPA Act are able to operate as effectively as possible (the PGPA Act sets out essential structure and principles; regulatory detail will be contained in ‘rules’ issued by the Minister for Finance).
The PGPA (Consequential & Transitional Provisions) Bill 2014 (the C&T Bill) is likely to be introduced to Parliament in the week commencing 2 June. The Department of Finance has advised that, if enacted, the C&T Bill will establish transitional arrangements that include:
- repealing the CAC Act;
- repealing most provisions in the FMA Act, while retaining some powers in a renamed act, the Financial Framework (Supplementary Powers) Act 1997; and
- replacing references in more than 250 Commonwealth Acts to the FMA and CAC Acts with the equivalent provisions in the PGPA Act.
The Department of Finance has also advised that, along with the PGPA (C&T) Bill, three appropriation modification bills will be introduced. The bills relate to Appropriation Acts passed by the Parliament in relation to the 2012‒13 and 2013‒14 financial years and, subject to their passage, the 2014‒15 Appropriation Bills when they become Acts. This recent appropriation legislation was prepared on the basis that the FMA and CAC Acts are still in force, and rely on features of those Acts in terms of the operation of appropriation arrangements. Without modification to this appropriation legislation to recognise the commencement of the PGPA Act from 1 July 2014, there is a risk that Commonwealth entities may not be able to access the amounts appropriated.
The Parliamentary Library will produce bills digests for the above bills as they become available.