Estimates committees no longer exist as a separate category of committee, but the estimates scrutiny functions they performed are carried out by the legislative and general purpose standing committees. When performing those functions the committees are still commonly referred to as estimates committees. Like legislative and general purpose standing committees, estimates committees came into existence on 11 June 1970 as part of the modern committee system in the Senate. The estimates scrutiny role of the committees is provided by standing order 26, under which the old estimates committees used to be established.
Estimates scrutiny is an important part of the Senate's calendar and a key element of the Senate's role as a check on government. The estimates process provides the major opportunity for the Senate to assess the performance of the public service and its administration of government policy and programs. It has evolved from early efforts by senators to elicit basic information about government expenditure to inform their decisions about appropriation bills, to a wide-ranging examination of expenditure with an increasing focus on performance. Its effect is cumulative, in that an individual question may not have any significant impact, but the sum of questions and the process as a whole, as it has developed, help to keep executive government accountable and place a great deal of information on the public record on which judgments may be based.
Procedures currently applying to the consideration of estimates are as follows. Twice each year, particulars of proposed expenditure and tax expenditure statements are referred to the committees. The particulars are derived from the two sets of appropriation bills normally introduced twice each year. Portfolio Budget Statements, tabled in May, and Portfolio Additional Estimates Statements, tabled in February, assist the committees in their examination of the particulars. Statements of expenditure from the Advance to the Minister for Finance are also referred to the committees. For the consideration of additional estimates in February, committees also have access to other budget statements such as the final budget outcome for the previous financial year. Annual reports of agencies, required to be tabled by 31 October, are also available for consideration in the context of an agency's performance over the previous financial year.
Supporting documentation provided by departments is significant to the estimates scrutiny process, and has evolved with the process. From the early 1970s, departments provided explanatory notes to the committees examining estimates. These notes were rudimentary at first and were provided informally to members of estimates committees. As a result of pressure from committees the documents were formally tabled in the Senate from 1976. The introduction of program budgeting in the public sector in the 1980s saw the documents transformed from explanatory notes to program performance statements which provided explanations according to the new program structure and which were also promoted by the Department of Finance as an accountability tool, used for improving program management and evaluation, as well as for providing information to the Senate. Documentation underwent a further change in 1994, when the movement of the Budget from August to May meant that documentation provided for Budget estimates (Portfolio Budget Statements) could not provide the extent of performance information that the Senate was used to. Performance information is now found in annual reports of agencies, required to be tabled by 31 October each year, and which may be examined by the committees when considering estimates. The move to output-based accrual budgeting reinforced the requirement for detailed explanatory material on departmental activities. The committees considering estimates have thus encouraged improvements in the quality, nature and transparency of information presented to Parliament.
Committees hold initial hearings at which the responsible minister, or representative, and officers appear to answer questions on their respective programs. Although the Senate permitted parliamentary secretaries to appear before estimates committees in the past, an increase in the number of ministers in the Senate following the 1993 election led the Senate to agree to an order ending this practice. This prohibition was subsequently relaxed to allow parliamentary secretaries to represent ministers other than Senate ministers in relation to the latter's own responsibilities. Although it is desirable that a minister be present at the hearings, it is not required by standing orders.
Days are set aside for examination of the estimates and on such days the Senate usually does not sit (in earlier years it adjourned early) to enable the committees to meet. On occasions committees considering estimates have been authorised to meet while the Senate was sitting. When the Senate was "recalled" under standing order 55 on 3 November 2005, scheduled estimates hearings were authorised to proceed.
The committees are free to set additional times for estimates hearings if they so choose. Any such additional hearings would have to occur before the time set by the Senate for the committees to report. As there is no requirement for the committees to report after the supplementary hearings (see below) such additional hearings could be held at any time up to the next round of regular hearings. Thus, in the supplementary hearings in early November 2006, the Economics Committee decided to hold an additional hearing later in November.
Committees have been directed by the Senate to hold supplementary hearings on estimates. In 2008 the Community Affairs Committee was directed to hold "cross-portfolio" estimates hearings on Indigenous affairs. Such hearings are now a regular feature of the estimates cycle.
The committees have power to call for persons and documents and may also move from place to place, although no committee considering estimates has yet done so.
Estimates hearings are required to be in public and the committees when considering estimates are not empowered to receive confidential material in the absence of a specific resolution of the Senate to that effect. All such material received by a committee is automatically published. Although the Senate in 1981 agreed to consider whether estimates committees should be able to take evidence in camera, the Procedure Committee has on several occasions recommended against such a change, and the Senate has accepted those recommendations.
Similarly, because estimates hearings are required by standing order 26 to proceed by way of calling on items of proposed expenditure and seeking explanations from ministers and officers, the committees are not empowered, in the course of estimates inquiries, to adopt inquiry techniques which are available to them in their other activities, such as showing video recordings, participating in product demonstrations or undertaking on-site inspections.
No more than four committees may meet in public simultaneously. This provision is intended reasonably to accommodate the interests of senators in the estimates of several departments.
Procedures applying to Senate committees generally apply to estimates hearings in so far as those procedures are consistent with standing order 26. For example, the procedures for the protection of witnesses in Senate Privilege Resolution No. 1 apply to estimates hearings, but as standing order 26 requires that estimates hearings be held in public, the provisions in those procedures relating to taking evidence in camera cannot apply to estimates hearings. Similarly, standing order 25(13) which discourages legislative and general purpose standing committees from inquiring into matters being examined by select committees cannot prevent questions being asked at estimates hearings about such matters because such questions are not, in themselves, inquiries and the estimates hearings are intended to cover "particulars of proposed expenditure", subject only to the test of relevance.
At each hearing, the committee chair calls on the items of proposed expenditure, usually by reference to the programs and subprograms for which funding is described in the Portfolio Budget Statements or Portfolio Additional Estimates Statements. The estimates are then open for examination. Committees may also consider the annual reports of departments and budget-funded agencies in conjunction with their consideration of estimates.
Questions taken on notice at estimates hearings
Most questions are answered at the hearings, but witnesses may also choose to take questions on notice and provide written responses after the hearing. Members and participating members may also place questions on notice. Such questions are lodged with the secretaries of the committees, and are distributed to members of the committees and to relevant departments. As any senator may participate in estimates proceedings, any senator may place questions on notice. Once questions are lodged they are in the possession of the committees and cannot be withdrawn by the senators who lodged them. There is limited time for estimates questions on notice to be lodged, and the withdrawal of questions after they are lodged could deprive other senators of the right to have the questions answered.
Questions may be lodged only while there are estimates proceedings in process, that is, from the time of the reference of the main or additional estimates to the committees to the time when the committees report, or, in the case of the supplementary hearings on the main estimates (see below), from the expiration of the deadline for the notification of matters to the time when the committees conclude their hearings or report if they present reports. Questions lodged during the supplementary hearings must relate to matters notified for consideration in those hearings.
A senator, on any day after question time in the Senate, may seek an explanation of, and initiate a debate on, any failure to answer an estimates question on notice within 30 days after the deadline set by the committee for answering such questions.
In November 2004 the Senate adopted a special procedure whereby questions on notice were substituted for supplementary estimates hearings.
The committees when considering estimates are authorised to ask for explanations from ministers in the Senate, or officers, relating to the items of proposed expenditure. Usually the committees leave it to the minister to determine which witnesses attend, although they have the power to call particular witnesses if they so choose. On many occasions in the past, however, ministers have cooperated with committees in agreeing to the attendance of particular witnesses.
Scope of questions at estimates hearings
Although the reference in standing order 26(5) to ministers or officers might be taken to limit estimates hearings to public bodies and office-holders, nongovernment bodies in receipt of public funds have appeared by agreement to answer questions.
The only substantive rule of the Senate relating to the scope of questions is that questions must be relevant to the matters referred to the committees, namely the estimates of expenditure. Any questions going to the operations or financial positions of departments or agencies are relevant questions. The Senate on 22 November 1999 endorsed the views of the Procedure Committee on the relevance of questions at estimates hearings. This followed earlier disputes between committee members and ministers about relevance of questions. The Procedure Committee adopted advices provided to those members by the Clerk of the Senate. As the estimates represent departments' and agencies' claims on the Commonwealth for funds, any questions going to the operations or financial positions of the departments and agencies which shape those claims are relevant. Annual reports are statements to Parliament of the manner in which departments use the resources made available to them, and therefore references to annual reports are relevant. When the budget cycle was changed so that the main estimates were presented in May instead of August, this necessarily involved the most relevant annual reports not being available at the time of the main estimates hearings but becoming available at the time of the additional estimates hearings. It was therefore accepted that annual reports would be referred to during the additional estimates hearings. In effect, annual reports disclose the financial positions of departments and their activities leading to their financial positions at the very time when departments are seeking additional funds as a result of their financial positions.
Role of the Australian National Audit Office
An important factor is the availability of audit reports and the participation of officers of the Australian National Audit Office (ANAO) in committees' examination of programs which have been subject to efficiency and project audits by ANAO. Guidelines for provision of assistance by the Auditor-General to committees considering estimates were drawn up in 1986 following a meeting between the Auditor-General and the President and chairs of the former estimates committees. The Auditor-General produces regular reports on departments and their financial statements, on individual efficiency and project audits, and special audits. The chief assistance provided by the Auditor-General is by way of briefings for committees on reports, and throughout the estimates process if required. Although ANAO staff do not attend estimates hearings as a matter of course, it is open to committees to invite the Auditor-General to provide comment, or nominate ANAO officers to provide comment, on matters relevant to audit reports raised during committee hearings. On three occasions, this assistance has taken the form of ANAO officers appearing as witnesses before committees considering estimates, to provide comment on audits conducted within the relevant program. During its consideration of the 1993 Budget estimates, Estimates Committee A invited ANAO officers to give evidence on two separate organisations, the Australian Quarantine and Inspection Service and the Aboriginal and Torres Strait Islander Commission, both of which had been subject to recent audits. In its report to the Senate, tabled on 7 October 1993, the committee commented that the provision of public evidence by ANAO officers had been helpful to the consideration of the proposed estimates. On another occasion, in 1989, ANAO officers gave evidence to Estimates Committee E on audits conducted on the Aboriginal Development Commission and Department of Aboriginal Affairs.
Supplementary estimates hearings
After initial hearings have been completed, the committees present reports to the Senate. They are also required to set a date for receipt of answers to questions taken on notice prior to and at the hearings. In relation to the annual estimates, but not the additional estimates, the committees are required to set a date or dates for supplementary hearings to consider answers to questions on notice or any other matters relating to the proposed expenditure of which members and participating members have given notice that they wish to pursue. The date set for the commencement of supplementary meetings must not be less than 10 days after the date set for receipt of answers to questions taken on notice. In practice in recent years, the Senate has set the dates for supplementary hearings. Senators must give notice of matters they wish to pursue not less than three working days before the date for commencement of the supplementary meetings.
Matters considered at supplementary hearings are confined to those matters of which notice has been given. Committees may present further reports to the Senate containing recommendations for further action by the Senate, although they are not required to do so. There is no limit to the number of supplementary hearings a committee may hold, but after the time for giving notice of matters to be raised at supplementary meetings has expired, there is no further opportunity to give notice of additional matters. In a report on its supplementary meetings in November 1993, Estimates Committee F recommended that the Procedure Committee examine a system for giving notice of matters in respect of a particular portfolio not less than three days before the commencement of supplementary hearings on that portfolio. The recommendation was adopted by the Senate after it had been moved as a second reading amendment to the appropriation bills by the chair of Estimates Committee F. The Procedure Committee declined to recommend a change to the procedures on the grounds that the existing arrangements offered clarity and simplicity and the proposed change would make programming of supplementary meetings more difficult.
In 2001, on the recommendation of the Procedure Committee, supplementary hearings were confined to the annual appropriation bills, and abolished in respect of the additional appropriation bills. The rationale of this change was that, as the budget cycle had developed, the supplementary hearings for the additional appropriation bills were occurring very near to the main round of the annual appropriation hearings, when unlimited questioning of departments and agencies is possible.
It is not necessary for the committees to have completed their supplementary hearings before debate on the appropriation bills resumes, or, indeed, before the bills are passed. Normally, however, the hearings are completed before the bills proceed.
For the history of changes to the estimates scrutiny process, see OASP 12th ed., Chapter 13, Financial Legislation, pp. 313-16, under History of expenditure scrutiny.