FINANCE AND PUBLIC ADMINISTRATION
The Committee and its Predecessors
Since the establishment of the Senate Standing Committees in 1970, matters
presently covered by the Senate Standing Committee on Finance and Public
Administration have fallen, formally, within the areas of interest of
the following Committees:
- Senate Standing Committee on Finance and Government Operations
(Appointed 11 June 1970; Fully Established 06 October 1971)
(Not re-appointed 02 March 1976; re-established 24 March 1977)
- Senate Standing Committee on Finance and Public Administration
(appointed 22 September 1987)
The membership of the Senate Standing Committee on Finance and Public
Administration in December 1990 was as follows:
Senator J. Coates (ALP, TAS) (Chair)
Senator I.G. Campbell (LP, WA)
Senator C.R. Kemp (LP, VIC)
Senator S. Loosley (ALP, NSW)
Senator the Hon. P.A. Walsh (ALP, WA)
Senator J.O.W. Watson (LP, TAS)
A full listing of membership and Committee Chairpersons on the Senate
Standing Committee on Finance and Public Administration and other related
committees are listed in an attachment to this section. Other attachments
to this section include lists of committee secretaries and reports tabled
by the committees.
The Work of the Committees
As of 1 December 1990, this Committee had tabled 72 reports, 57 as the
Senate Standing Committee on Finance and Government Operations and 15
as the Senate Standing Committee on Finance and Public Administration.
The reports ranged in length from one page to 377 pages, and averaged
63 pages; they took from three days to three years to finalise.
The Committee's inquiries have focused, at the express wish of the Senate,
on the accountability of Commonwealth bodies, frequently involving an
examination of the relevant annual reports of the bodies; on matters referred
by Estimates Committees; and to a lesser extent on aspects of legislation.
A breakdown of reports by category is provided in Table 1.
Table 1: Reports by (non-exclusive) category*
Reports on matters raised by Estimates Committees - 15
Reports on annual reports - 19
Reports on legislation - 12
Reports consisting in part or wholly of lists of Commonwealth bodies
Reports on statutory authorities - 30
Reports on non-statutory bodies - 3
Reports on government companies - 1
Reports on the central administration of Australian government - 3
Other reports - 7
*Many reports on statutory authorities were based on the annual reports
of those authorities and hence have been placed in both categories. Similarly,
there is overlap between the reports on statutory authorities and the
lists of Commonwealth bodies.
Reports on statutory authorities
An unusual aspect of the Committee's reference concerning statutory authorities
is that it provides for 'continuing oversight'. That is, the Committee
does not have to go back to the Senate to move that matters be referred
to it concerning statutory authorities, but can initiate its own inquiries
under this standing reference.
The Committee's first report on statutory authorities was tabled on 20
February 1979. In his tabling statement, the Chairman, Senator Peter Rae,
made clear why the Committee and the Parliament should view the proliferation
of statutory authorities with interest and concern:
The Committee found that as Commonwealth statutory authorities have proliferated,
they have acquired an extraordinarily diverse set of characteristics.
They are often outside the standard departmental structure with its safeguards
of ministerial responsibility and accountability. Little or no attempt
has been made to achieve uniformity in the justification for their original
creation, in the degree of operating independence granted to them or in
the strictness and form of their accountability requirements (Senate Hansard
1979, p. 19).
In that first report, the Committee noted that no comprehensive list
of statutory authorities was maintained. The Committee was obliged to
compile its own by a painstaking examination of each piece of Commonwealth
legislation, identifying at the time 241 authorities. Despite the fact,
which the Committee reiterates regularly, that it is axiomatic that the
existence of a body must be known if it is to be held accountable for
its actions, no comprehensive and accessible register of Commonwealth
bodies is maintained even now, except, by default, by the Committee.
In an attempt to overcome the dearth of information concerning the statutory
officers and authorities which it had identified, the Committee surveyed
them by mailed questionnaire in 1978 and on subsequent occasions. The
survey unearthed authorities which, inter alia, could not or would not
answer questions about their funding, even when they received a Parliamentary
appropriation; authorities which failed to make provision for superannuation;
authorities which failed to keep records of their assets, or depreciation
figures; and authorities to whom the notion that they might be held accountable
to Parliament for their activities was clearly foreign.
In its subsequent reports on statutory authorities, and in more recent
years on Commonwealth bodies generally, the Committee continued to update
its register of authorities, to produce it in categorised form, and as
well to undertake case studies of selected agencies. Those agencies were
self-selecting in so far as the attention of the Committee was generally
drawn to them by the tardiness or blatant inadequacy of their annual reports,
or by adverse press comment.
Unarguably the most significant work conducted by the Committee in relation
to individual statutory authorities was its inquiry into Asia Dairy Industries
(ADI) and its parent company, the Australian Dairy Corporation (ADC).
A 377-page report, entitled 'The Australian Dairy Corporation and its
Asian Subsidiaries', was tabled in the Senate on 17 September 1981
and provoked considerable press coverage and debate in both houses of
Parliament. The Committee alleged that improper management and accounting
arrangements had existed within the ADI and ADC, and that the actions
of the ADC led to a breach of the then applying GATT skim milk powder
minimum pricing arrangement. A subsequent inquiry by the Auditor-General
supported this view, which was acknowledged by the government in a ministerial
statement on the issue in the House of Representatives on 16 September
1982 (House of Representatives Hansard 1982, p. 1570).
The report was more significant, however, for the fundamental issues
of general principle it raised: the degree of ministerial control of statutory
authorities, including power of direction; the development of appropriate
guidelines for the establishment, operation and accountability of statutory
authorities and subsidiary companies; the duties and responsibilities
of members of such authorities and companies; and reporting requirements.
Reports on non-statutory bodies (NSBs)
From its inquiries into statutory authorities, the Committee became aware
of the existence of another ill-defined group of bodies, which consumed
not insignificant amounts of government funds and which acted as semi-independent
and unscrutinised policy and administrative advisors - the non-statutory
bodies. Given its interest in enhancing parliamentary scrutiny, the Committee
sought and obtained from the Senate on 17 November 1983 another ongoing
reference, this time to oversee the establishment, operation, administration
and accountability of Commonwealth non-statutory bodies.
By the time of its first comprehensive report on NSBs in August 1986,
the Committee had identified 598 of them, ranging in size and influence
from the National Health and Medical Research Council to the more modest
Antarctic Animal Care and Ionising Radiation Usage Ethics Committee. Amongst
its recommendations, the Committee called for the establishment of a central
NSB register, to be held by a co-ordinating department such as the Department
of the Prime Minister and Cabinet; and for Ministerial approval for the
establishment of any NSB.
The government's response maintained that 'information regarding NSBs
be provided in annual reports either of NSBs themselves or of their parent
bodies'. It rejected the Committee's central register proposal because
of its `concern to streamline and devolve administrative functions, while
also responding to the Committee's concerns by ensuring that public sector
accountability extends to the activities of NSBs' (Senate Hansard 1987,
pp. 2645-47). However, the majority of the Committee's specific recommendations
concerning the information required to be made publicly available on NSBs
In May 1988, the Committee tabled a further report on NSBs, consisting
in part of an examination of departmental annual reports from 1985 to
1987 to ascertain the degree of compliance with the government's decision
concerning the publication of information on NSBs. It found that for the
year 1986-87, for example, only 15 out of 28 departments listed NSBs,
and the information provided often fell far short of that required. The
Committee further observed that the government itself had taken no steps
to ensure the observance of its requirements. More recent reports of the
Committee have confirmed these observations.
Reports on companies
In November 1989, the Committee tabled its first report on government
companies and their reporting requirements - another report in the series
aimed at improving the accountability of the non-departmental area of
public administration, under the standing reference of 8 October 1986.
Again the Committee noted that '[t]he absence of any comprehensive and
readily accessible index of Commonwealth bodies is a potentially serious
flaw in the accountability system' and recommended the establishment of
a central register, this time of companies and incorporated associations
which the Commonwealth controls or in which it has a substantial interest.
Reports on annual reports
Recognising the importance of the annual report as an accountability
document, the Senate had empowered its legislative and general purpose
standing committees to report on annual reports as early as 1976, and
referred all reports to appropriate committees for their perusal. Not
all committees chose to exercise this option, but this Committee most
By December 1989, the Committee had examined in some detail the annual
reports of 73 individual Commonwealth bodies, selected as indicated above
on the grounds of excessive lateness in their presentation to the Parliament
or inadequacy of content and had tabled 18 reports partly or wholly on
annual reports, covering from one to fifteen individual inquiries per
In most cases, the Committee found that its initial inquiry served to
remind the Commonwealth bodies concerned of their reporting obligations.
However, it did examine the annual reports of 14 bodies on more than one
To clarify and standardise reporting requirements, and to encourage expeditious
reporting, the Committee recommended the passage of an annual reports
act, which would apply to all Commonwealth statutory authorities and government
businesses. The government rejected this recommendation. However, it has
been the policy of successive governments since 1982 to require major
statutory authorities to submit annual reports. Also, the amended Acts
Interpretation Act requires all statutory authorities which do present
annual reports to submit them within six months of the period to which
the report relates. The government further tabled in the Senate on 11
November 1982 a set of guidelines for the content, preparation and presentation
of annual reports by statutory authorities and more detailed guidelines
for departmental annual reports (Senate Hansard 1982, pp. 2260-63).
Along with other Parliamentary committees, this Committee continued to
press for tighter standards and effective monitoring of annual reports.
Some progress was made in 1985, when amendments to the Public Service
Act made reporting in accordance with the approved guidelines compulsory
for Commonwealth departments. Revised departmental guidelines were prepared
by the Department of the Prime Minister and Cabinet, in consultation with
the Department of Finance and the Public Service Board, cleared by the
Joint Committee on Public Accounts and tabled in the Parliament on 18
November 1987 (Senate Hansard 1987, pp. 1921-24). (Updated again in 1991).
Revision of the reporting guidelines for statutory authorities was, however,
Following these changes to departmental reporting guidelines, the Committee
again investigated the timeliness and quality of departmental annual reports.
In its report tabled in June 1989, the Committee found there had been
a steady improvement in the reporting process, and the current standard
was relatively high. However, it concluded that there was still room for
improvement. On the negative side, it felt impelled to comment yet again
that the development of the guidelines was being managed unsystematically,
that the guidelines for statutory authorities were 'outdated and inadequate',
and that proactive co-ordination was lacking. It recommended, inter alia,
the development of a consolidated handbook of reporting requirements,
proactive co-ordination by the Department of the Prime Minister and Cabinet,
the clarification of the requirement to present performance information,
and regular scrutiny by legislative and general purpose standing committees
of the Senate.
While the Government has not yet provided a final response to the report,
the Senate itself acted on the recommendations of this Committee, by passing
a motion on 14 December 1989 referring the annual reports tabled in the
Senate to the relevant standing committees, which would be required to
report to the Senate as to whether each report was 'apparently satisfactory'.
Each committee would be further required to report in more detail on unsatisfactory
or late reports, or reports selected for whatever reason for closer examination.
In other words, reporting on annual reports by standing committees has
changed from being an optional exercise to a compulsory one. Under this
new requirement, this Committee has tabled one report, in May 1990.
Reports on legislation
As a legislative and general purpose committee, this Committee
had had referred to it ten pieces of legislation, representing only 14
per cent of the Committee's total number of reports, until December 1989.
One of the pieces of legislation investigated by means of inspections
and public hearings was the Honey (Export Inspection Charge) Bill 1982.
The Committee concluded, and the government agreed, that inspection to
ensure compliance with import country requirements was not necessary.
In its summing up, the Committee noted that its most valuable contribution
had been in facilitating consultation between the parties involved.
The issue of the retrospective application of legislation was a key element
in the referral of the Income Tax Assessment Amendment Bill (No. 2) 1984
to the Committee. The Committee concluded that retrospectivity was justified
to counter tax avoidance practices associated with employee superannuation
funds. However, the report was not unanimous, with all three Opposition
Senators providing separate dissents to the retrospectivity provision.
Following the adoption by the Senate on 5 December 1989 of recommendations
of the Select Committee on Legislation Procedures, more bills have been
referred to committees for examination and report. This Committee examined
four bills referred to it in 1990 and tabled two reports on them.
Matters referred by estimates committees
One of the reasons for the re-establishment of the Committee in 1977
was to provide a forum for the follow-up of matters recommended for further
investigation by estimates committees. Fifteen such matters have been
referred, ranging in significance from the relatively modest (departmental
expenditure on pot plants) to matters of high principle (the use of the
Advance to the Minister for Finance). The accountability to Parliament
of statutory authorities also figured, over issues such as the confidentiality
or otherwise of ABC employment contracts.
A recommendation from Estimates Committee A resulted in the referral
of the matter of the use made of the funds approved by Parliament for
the Advance to the Minister for Finance. This Committee found the reference
of considerable interest, because of its ongoing concern about the expenditure
of moneys not appropriated for a specific purpose. It questioned whether
the use of the Advance permitted the evasion of the principle of prior
parliamentary appropriation of expenditure, as required by Section 83
of the Constitution.
In its report, the Committee concluded that, while a contingency fund
such as the Advance was necessary to provide the government with expenditure
flexibility, certain checks and balances were required. The government
response indicated that 'sympathetic consideration' had been given to
the Committee's recommendations, and that where it had not been able to
adopt a specific recommendation, it had endeavoured to find a compromise
that met the spirit of the Committee's thinking (Senate Hansard 1981,
The central administration of Australian government
In December 1987, the Committee sought and obtained from the Senate another
standing reference, this time 'the central administration of the Australian
government'. Its intention was to obtain a continuing mandate for inquiries
into the departmental field of public administration.
Its first inquiry under this reference was a review of the efficiency
scrutiny program. The Committee had intended to produce a progress report
on the scrutiny program and to consider its effectiveness as a method
for improving the efficiency of the public service. However, few scrutinies
were initiated after the initial 37 and the co-ordinating unit was wound
up in July 1988, so the Committee's report became more of a retrospective.
In its report, the Committee voiced its concern over the lack of central
monitoring of efficiency improvement initiatives, and the lack of reporting
on such initiatives by departments and agencies. In its response, the
government once again advanced its managerialist policy of devolving responsibility
and accountability to agencies as its reason for rejecting a centralised
monitoring role. While accepting the obligation to take efficiency-enhancing
opportunities service-wide, the government considered in its response
that 'the development of a central monitoring mechanism would not be consistent
with the policy of devolving responsibility and accountability'. However,
it did promise to consider broadening departmental and agency reporting
requirements to include specific efficiency improvement efforts, and to
consider also a wider efficiency audit function for the Australian Audit
The most recent inquiry undertaken by the Committee under this reference
has been the development of the Senior Executive Service. The Committee
tabled a report on one aspect of its inquiry, namely performance-based
pay, in May 1990 and a full report in October 1990, recommending refinements
to the Service.