Bills Digest no. 8 2006–07
Public Works Committee Amendment Bill 2006
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage History
Purpose
Background
Main Provisions
Concluding Comments
Endnotes
Contact Officer & Copyright Details
Passage History
Public Works
Committee Amendment Bill 2006
Date introduced: 21 June 2006
House: Senate
Portfolio: Finance and Administration
Commencement: On Royal Assent
The major purposes of the Bill are to:
- amend the definition of a public work to include works funded
through public private partnerships ( PPPs ) and other similar
arrangements
- increase from $6 million to $15 million the threshold value of
projects that require referral to the Parliamentary Standing
Committee on Public Works ( the Committee )
- provide for the threshold value to be varied by regulation,
and
- insert gender-neutral language into the Act.
The Public Works Committee Act 1969 ( the Act ) governs
the work of the Parliamentary Standing Committee on Public Works.
The Committee was originally established by the Commonwealth
Public Works Committee Act 1913 and first met in
1915.(1) It is one of the oldest investigative
committees of the Parliament.(2)
The Act requires that all public works for the Commonwealth
which exceed $6 million in value be referred to the Committee
by either House of the Parliament or by the Governor-General. With
some exceptions, all public works sponsored by Commonwealth
departments and major statutory authorities with large building
programs come within the ambit of the Committee s investigative
powers.(3)
The Act empowers the Committee to inquire into each public work
referred to it and then provide a report to Parliament on:
- the stated purpose of the proposed work and its suitability of
the purpose
- the need for the work
- the cost-effectiveness of the proposal
- the amount of revenue it will produce if the work is
revenue-producing, and
- the current and prospective value of the
work.(4)
The Bill amends the Act by making changes to the definition of a
public work . The change in definition means that works funded by
PPPs, through leasing or other similar arrangements will be
reviewed by the Committee (or in the case of PPPs, will continue to
be reviewed). Last year the Committee completed 23 reports; in the
first six months of 2006, it completed 11 reports (see graph below
for further details). It is anticipated that the change in the
threshold to $15 million would reduce the number of referrals by
one quarter.
The amendments will also increase the threshold at which
projects would need to be referred to the Committee, from the
current $6 million to $15 million. The threshold was originally set
at $750,000 in 1969, was raised to $2 million in 1973, and again to
$6 million in 1985. The change reflects twenty years of
inflation. The Bill also provides that in future this figure may be
amended by regulation rather than by an amending Act.
In addition, gender-neutral language replaces terms such as
Chairman , he and his .
The amendments are designed to clarify that works by PPPs fall
within the Committee s purview, and to include other similar
arrangements such as leasing arrangements in which the Commonwealth
has a vested interest. This means the Committee has a wider ambit
within which to investigate public works for the Commonwealth which
might increase the volume of projects to review. On the other hand,
the higher threshold might mean that fewer projects will be
reviewed by the Committee. Further, no documentation has been
provided to justify the increase in the threshold value or why the
figure of $15 million was selected.
The Bill will have minimal financial impact, especially because
works funded through PPPs are already referred to the
Committee.(5)
The changes to the threshold amount might mean a reduction in
the compliance costs for projects valued between $6 15 million
because they will not need to be referred to the Committee.
However, those public works already being scrutinised by the
Committee which are under $15 million will continue to be
scrutinised.
Additionally, there might be an increased cost in investigating
works funded through leasing arrangements as those projects will
need to be referred to the Committee.
Part 1 of Schedule 1 contains amendments relating to the
definition of public works and changes to the threshold amount.
Part 2 of Schedule 1 inserts gender-neutral language into the
Act.
Concluding
comments
The Bill introduces amendments to the Public Works Committee
Act 1969 in relation to the amount and definition of a
‘public work’; these reflect changes in the procurement
environment since the Act was last amended in 1989.(6)
The amendments will ensure that the Committee has the ability to
review works funded through public private partnerships (PPPs),
leasing arrangements and other similar arrangements.
It is assumed that the increase in the threshold amount reflects
twenty years of inflation. However no documentation on the current
value of projects has been provided to make an assessment on
whether there is a need to increase the threshold value to $15
million or why that figure was selected.
The change in the arrangement to determine the threshold amount
will mean there is flexibility to update the amount without the
need to seek further amendments to the Act. The technical changes
put forward by the Bill bring the Act into line with modern legal
parlance in the use of gender-neutral terminology.
- National Archives of Australia, Walter Burley Griffin and the
design of Canberra , Fact Sheet 95, 2004, http://www.naa.gov.au/fSheets/fs95.html.
- Department of Finance and Administration, Public Works
Committee , 2005,
http://www.finance.gov.au/finframework/public_works_committee.html.
- ibid.
- S. 17 (3).
- Explanatory Memorandum, p. 1.
- ibid.
Fiona Childs
4 August 2006
Bills Digest Service
Information and Research Services
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ISSN 1328-8091
© Commonwealth of Australia 2006
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Published by the Parliamentary Library, 2006.
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