Chapter 1 Annual Report
1.1
Under Section 16 of the Public Works Committee Act 1969 (the
Act), the Parliamentary Standing Committee on Public Works must table in each house
of the Parliament a report of its proceedings during the calendar year just
ended.
1.2
All public works that have an estimated cost exceeding $15 million must
be referred to the Committee and cannot be commenced until the Committee has
made its report to Parliament, and the House of Representatives resolves that
it is expedient to carry out the work.[1]
1.3
The Act states that in considering and reporting on a public work, the
Committee shall have regard to:
n the stated purpose of
the work and its suitability for that purpose;
n the necessity for, or
the advisability of, carrying out the work;
n the most effective
use that can be made, in the carrying out of the work, of the moneys to be
expended on the work;
n where the work
purports to be of a revenue-producing character, the amount of revenue that it
may reasonably be expected to produce; and
n the present and
prospective public value of the work.[2]
1.4
The year 2011 was a busy one for the Committee, having conducted
inquiries into 11 works which had a combined cost of $782.7 million. A list of
the works and their individual costs is at Appendix A.
1.5
During 2011, the Committee also considered 48 medium works proposals
(those valued between $2 million and $15 million), with a combined value of
$433.3 million. A list of medium works notified to the Committee can be found
at Appendix B.
1.6
The Committee’s reports, submissions to each inquiry and transcripts of
associated public hearings are available on the Committee’s website.[3]
The Committee’s website also provides previously tabled reports and the
procedure manual, which assists agencies to prepare projects for Committee
review. A list of all Committee meetings and hearings held during 2011 is at
Appendix C.
Inquiries and reports
1.7
The Act requires the Committee to consider and report on each referred
work ‘as expeditiously as is practicable’.[4] The Committee takes this
seriously and ensures that all inquiries are completed as quickly as possible.
In 2011, the average time from referral of works to report tabling was 15
weeks. The average of 15 weeks is more typical for inquiry completion than the
figure of nine weeks for the year 2010. There were extenuating circumstances in
that year.
1.8
The inquiry process allows time for public comment on proposed works, and
for the Committee to inspect the proposed work site(s) prior to holding public
and private hearings to take evidence about the works. The Committee also
considers the parliamentary sitting calendar when planning its inquiry
timetable to ensure that reports can be finalised and tabled promptly when both
houses of Parliament are sitting.[5]
1.9
The Committee raised this issue with the Department of Finance and
Deregulation, suggesting that it would assist the work of the Committee if
agencies were to be able to refer works out of session.
1.10
Substantial breaks in the parliamentary sittings and federal elections
can delay projects. It is essential that agencies consider possible delays in
their project planning, and include appropriate contingencies. The Committee
does not condone any breach of its Act due to such delays.
Medium works
1.11
The Committee continues to publish a list of medium works notifications on
its website. The current list includes all works approved since the beginning
of the 43rd Parliament.
1.12
The Committee reminds Australian Government departments, agencies and
authorities of their obligations under the medium works process. This process forms
an important part of the parliamentary scrutiny of Commonwealth public works
expenditure.
1.13
It is incumbent upon departments to ensure that all agencies within the
portfolio are aware of the Committee’s role and processes. Further, departments
must provide all necessary assistance so that smaller agencies may fulfil their
obligations to the Committee and the Parliament.
1.14
The Committee’s manual gives clear instructions about the medium works
process, and the Secretariat is always available to give additional information
about the process to agencies. Agencies should contact the Secretariat well
ahead of time, as the parliamentary calendar has a significant impact on the
Committee’s capacity to consider medium works proposals.
Need for a project and options considered
1.15
The need for a particular project must be demonstrated and fully
discussed in an agency’s statement of evidence or submission to an inquiry. In
particular, agencies must demonstrate where the works fit in to a wider policy
framework.
1.16
The options considered for each project or project scope element must also
be discussed in detail. There have been several occasions in the past year
where an agency’s submission has lacked this detail, only for it to come to light
during the project inspection and briefing provided to the Committee prior to
the public hearing for the inquiry. It is necessary that this level of detail
be provided to the Committee in the main submission or statement of evidence at
the beginning of an inquiry so that it may be fully considered in advance of
any public hearings.
1.17
In 2012, the Committee will be looking to ensure that each agency
thoroughly assesses the need and options considered for each project.
Post implementation review
1.18
Australian Government departments, agencies and authorities must prepare
a post-implementation review of each project completed.
1.19
On project completion, the Committee must be informed whether the
project remained within the advised scope, cost and timeframe.
1.20
Further, the Committee expects information regarding:
n the extent to which
the expected business benefits, including environmental benefits, have been or
are expected to be achieved;
n user satisfaction
with the delivered works;
n consultations with
neighbouring communities that may be impacted by the works; and
n lessons learned.
Review of the Public Works Committee Act
1.21
In 2011, the Committee met with representatives of the Department of
Finance and Deregulation at a roundtable discussion, to consider the
possibility of amending the Public Works Committee Act 1969 to update
certain aspects or provisions.
1.22
In particular there are some sections of the Act relating to the
Committee’s procedures and processes that do not reflect contemporary models
for the operation of joint statutory committees. Additionally, some provisions
of the Act are acknowledged to be outdated or unduly cumbersome.
1.23
A key example for consideration concerns urgent works. Currently, the
only provision in the Act for exemption of works due to urgency (Section 18(8)(b))
requires the Minister for Finance and Deregulation to move an expediency motion
in the House of Representatives. Once exempted on the basis of urgency, the Committee
has no role in scrutinising the works.
1.24
However, catastrophic events, emergencies or natural disasters can occur
at any time when the Parliament is not in session. The Act could be amended to
provide that the Governor-General exempt a work on the grounds of urgency when
the Parliament is not in session, in the same manner as allowed for referral of
works under Section 18(4). The amendment could provide that the sponsoring
agency be required to brief the Committee on the work within an appropriate
time after the work has commenced (e.g. three months), and to provide a post-implementation
report when the work has been completed.
1.25
The Committee plans to give further consideration to these issues in the
coming year.
Public Works Committee Act exemptions
1.26
During 2011 there were two notable circumstances where authorities were
exempted from Committee scrutiny. These were:
n the National
Broadband Network Co Limited (NBN Co); and
n Aboriginal Land
Trusts.
National Broadband Network
1.27
In 2009 the Government established the NBN Co as a Government Business
Enterprise. NBN Co’s responsibilities are to plan, rollout and operate the NBN.
1.28
The Act allows that the Governor General may make regulations declaring
that the Act does not apply to that authority when she ‘is satisfied that an
authority of the Commonwealth is engaging in trading or other activities, or is
providing services, in competition with other bodies’.[6]
1.29
On 1 July 2010, the Select Legislative Instrument 2010 No. 173 - Public
Works Committee Amendment Regulations 2010 (No. 1) (the Regulations) was
registered on the Federal Register of Legislative Instruments kept under the
Legislative Instruments Act 2003. The Regulations were to amend the Public
Works Committee Regulations 1969, to include NBN Co and its wholly-owned
subsidiaries as an exempt Commonwealth authority under subsection 6A(3) of the Public
Works Committee Act 1969. On 28 September 2010, the Regulations were tabled
in both houses of the Parliament.
1.30
Notice was given of a disallowance motion on 18 November 2010. The
disallowance motion was debated in the House of Representatives on 1 March
2011 where it was negatived, endorsing the Regulations that make the NBN Co an
exempted authority.[7]
1.31
While exempted from Public Works Committee scrutiny, the NBN Co is still
subject to Parliamentary scrutiny. In March 2011, the Joint Committee on the
National Broadband Network was established by resolution of both houses to
inquire into the rollout of the NBN project. The Joint Committee reports to the
Parliament, the Minister for Broadband, Communications and the Digital Economy
and the Minister for Finance every six months. NBN Co is also required to table
its annual report in Parliament.[8]
1.32
Notwithstanding its establishment, the Joint Committee does not possess
the powers of the Public Works Committee.
Aboriginal Land Trusts
1.33
On 2 June 2011, the Family Assistance and Other Legislation Amendment
Bill 2011 (the Bill) was introduced into the House. The Bill comprised five
schedules, four of which propose amendments to legislation in order to give
effect to 2011–12 Budget measures. The fifth schedule in the Bill, proposed to
exempt Aboriginal Land Trusts from the Public Works Committee Act 1969 by
inserting a new section into the Aboriginal Land Rights (Northern Territory)
Act 1976.[9]
1.34
The Aboriginal Land Trusts are established under the Aboriginal Land
Rights (Northern Territory) Act 1976 to hold title to land in the Northern
Territory for the benefit of Aboriginal people entitled by Aboriginal tradition
to use or occupy the land concerned.
1.35
The Bill’s Explanatory Memorandum described the purpose of the fifth
schedule as follows:
This Schedule amends the Aboriginal Land Rights (Northern
Territory) Act 1976 (the Land Rights Act) to clarify that the Public
Works Committee Act 1969 (the PWC Act) does not apply to Aboriginal Land
Trusts.[10]
1.36
On 2 June, the Bill was referred for inquiry to the following
committees:
n House of
Representatives Standing Committee on Social Policy and Legal Affairs; and
n Senate Community
Affairs Legislation Committee.
1.37
While the reports of both Committee inquiries supported the schedule 5
amendment, each noted that concerns had been raised. In its report of
14 June 2011, the House of Representatives Standing Committee on Social
Policy and Legal Affairs noted:
If this amendment is passed, it is unclear what scrutiny and
accountability processes will be put in place for the administration and
expenditure of these funds if the PWC requirement is removed. Regardless of
which authority administers the funding, FaHCSIA or Aboriginal Land Trusts, it
is important that proper processes of scrutiny and accountability are in place.[11]
1.38
Reporting on 22 June 2011, the Senate Community Affairs Legislation
Committee observed that it was aware that the Public Works Committee has
expressed concern about ensuring that all relevant works are subject to the
scrutiny intended by the Act, but also noting:
The committee was concerned whether the schedule would set a
precedent in how exemptions to the Public Works Committee Act occur. It was
concerned that there was a difference of view between that Parliamentary
committee and FAHCSIA about the application of the Act.[12]
1.39
Notwithstanding these observations, the Bill was debated in both houses
of the Parliament and passed on 23 June 2011. The Bill received assent on
28 June 2011.
Committee comment
1.40
The issue of authorities seeking to use provisions of the Act
inappropriately to exempt individual works from Committee scrutiny is a consistent
theme and has been raised over the years in the Committee’s Annual Reports.
While acknowledging that in some cases there may be genuine reasons for
individual works to be exempted on the grounds of urgency or national security,
the Committee has clearly asserted that exemptions should not be sought simply
because authorities have not allowed sufficient time for projects to be subject
to parliamentary oversight by the Committee.
1.41
While acknowledging that the Act also makes provision for authorities of
the Commonwealth to be exempted from Committee scrutiny through regulations, as
noted this requires approval of the Governor-General who must be satisfied that
the authority is engaged in trading or other activities, or is providing
services, in competition with other bodies. Where blanket exemptions of this
type are sought, the Committee is keen to ensure that they can be fully
justified.
1.42
Furthermore, the Committee has concerns about the capacity of
authorities to use amendments to establishing legislation in order to exempt
themselves from scrutiny and the precedence that this may set for other
statutory authorities. The Committee reminds authorities that the Public Works
Committee process should not be viewed as an impediment, but rather an
opportunity for the Parliament and the authorities concerned to ensure that
their capital works expenditure represents the best value for money, and that
resulting works are fit for purpose.
Conclusion
1.43
The Committee thanks everyone who has assisted or participated in the
Committee’s inquiries in 2011. In particular, the Committee appreciates input
from members of the public.
1.44
The Committee makes particular acknowledgement of the contribution made
by the Special Claims and Land Policy Branch of the Department of Finance and
Deregulation. This branch assists agencies with their preparation of proposals
for consideration by the Committee, and assists the Minister in his management
of the Public Works Committee Act 1969.
1.45
The Committee acknowledges the recently retired Senator Judith Troeth
and Senator Michael Forshaw, and greatly appreciates their contribution to the
Committee’s work. Both Senators displayed a high level of commitment and
integrity, and helped new members of the Committee learn the Committee’s role
and processes. The Committee thanks them and wishes them well in their future
endeavours.
1.46
The Committee also thanks the Hon Malcolm Turnbull, Mr Bernie Ripoll MP
and Senator Gavin Marshall for their service to the Committee.
1.47
The Committee welcomes Senator Alex Gallacher, Senator Anne Urquhart, Senator
Sue Boyce and Mr Patrick Secker MP, who joined the Committee in 2011.
Ms Janelle Saffin MP
Chair
15 March 2012