EMBARGOED: CHECK AGAINST DELIVERY * JjjAUSTHALIA L
FOR PRESS APRIL 8, 1976
EXPENDITURE COM4MITTEE
The establishment of un expenditure committee marks an important
step in the Government's policy of strengthening the parliamentary
sys temn.
It is fundamental to an effe~ ctive syst,,. m of representative
Government that the peoples representatives should be able to
adequately supervise and review the activities of Government
administration. The Parliament should be able to subject policy, legislation
and administration to close and effective scrutiny.
Du ' ring. the last election campaign the Governmen-t stated its
vie-w that the capacity of parliament, and particularly this
House, to scrutinis the estimates of expenditure should be
improved.
The absence oz an effective mechanism for examining proposals
may well have "-ontributed to the enormous inefficiency in
expenditure in the last three years.
The ultimate control of Parl. iament over the Executive and its
control over, and scrutiny of, the expenditure of money.
This is a fundamental prin. ciple of democracy which this Government
recognises. It is a principle whose expression will be strengthened by the
proposal for an expenditure committee.
The proposal for an Expenditure Committee arises from a
broader concern of the Government to improve the functioning
of our political institutions.
our historic plan to reform the Federal system by increasing the
financial independence of State and Local Government arises out
of our deep concern at the growing centralisation of power in
the Federal Government.
Our reforms will make participation in Government at State and
Federal levels more effective. ./ 2
Our policy of tax indexation will once more mean that tax increases
will have to be justified to the public, instead of simply taking
place without debate as a result of inflation.
The Expenditure Committee will greatly improve the capacity of
this House to scrutinize public expenditure and improve
Parliament's capacity to act as an able and effective watchdog
over the affairs of the Government.
The work of such a Committee will have an obvious value during a
period when the Government is especially concerned to minimise
waste and maximise efficiency in Government expenditure./
At the present time this House does not have adequate machinery to
examine the crucial process of formation of the estimates.
It is not appropriate that existing detailed Parliamentary scrutiny
should be confined to the Senate Estimates Committee and to a
Joint Committee the-Public Accounts Committee.
The Senate Estimates Committee examines the Appropriation Bills
but in a short time frame.
The Public Accounts Committee operates within rather broadly
defined terms of reference, but has a focus mainly on accounts
or past expenditure.
There is a need for greater in-depth examination of public
expenditure in relation to effectiveness and economy in the delivery
of . given Government policy.
An Expenditure Committee of the House of Representatives would
conduct its investigations throughout the year.
It would therefore have an opportunity to explore more deeply
selected areas of Government activity particularly in relation
to efficiency in the implementation or delivery of policy.
Over a number of years an Expenditure Committee would add to
knowledge and understanding within the Parliament in . a way that
has not been achieved by existing committees.
The Committee would not examine the Government's policies. it
would rather be concerned to investigate economy and effectiveness
in the implementation of such policies and matters related to the
formation of estimates of expenditure.
It is not proposed at this stage to make any change in the charter
of the Public Accounts Committee, though this would be kept under
review as the Expenditure Committee develops recognising that
there is potential for overlap. The initial work of the Expenditure
Committee will necessarily be on an exploratory nature.
The Committee might conduct its first examination in an area where
greater support could be given in terms of data availability.
The Terms of Reference for the Committee are almost identical to
those of the House of Commons Expenditure Committee. / 3
Close examination of the Terms of Reference of the Commons
Committee led us to the view that those terms, based on the
extensive experience of that Chamber, well expressed the scope
of matters the Expenditure Committee here might consider.
It seemed to us desirable to take advantage of this experience.
The Committee's Terms of Reference require it to:
Consider any papers on public expenditure presented
to this House and such of the estimates as it sees fit
to examine
Consider how,-if at all, policies implied in the figures
of expenditure and in the estimates may be carried out
more economically.
Examine the relationship between the costs and benefits
of implementing Government programmes
Inquire into and report on any question in connection
with public expenditure which is referred to it by this
House.
It is for the Committee itself to decide the papers or aspects
of papers which it will examine in depth and the nature of its
reports to the House, subject to the power of the House to direct
its attention to particular matters.
In order to carry out detailed examination, it would probably seek
to cover only a limited number of major areas of Government activities
each year.
It might take several years for the Committee to be able to cover
in its reports all areas of Government activity.
But the very fact of the existence of the Committee and lack of
knowledge of the area which the Committee will investigate next
will have its own salutary effect.
The Committee would be expected to-give due r-egard to the restraints
on expenditure faced by Parliamentary Departments, particularly in
relation to specialist staff.
The resolution ( Clause 2) includes the Chairman of the Joint
Parliamentary Committee of Public Accounts as a member ex-officio
of the Expenditure-Committee. The Charman of the Expenditure
Committee will be a member ex-officio of the Parliamentary.
Committee of Public Accounts.
The Committee having resolved that it will inquire into a
particular aspect, the Committee or a Sub-Committee could request
the Department( s) and/ or other Commonwealth bodies responsible
to prepare for it a written submission in a form which it specifies.
Where appropriate other bodies such as the Treasury and the
Public Service Board might be asked to contribute written submissions
also the Committee would of course be free to accept submissions
from any source. / 4
-4-
Under the Terms of Reference the Committee can examine expenditure
of all Commonwealth bodies including business undertakings.
If circumstances arose it would be possible to exempt by resolution
particular business or other bodies from examination.
There will be occasions where programmes being examined by the
Committee are delivered through State and/ or Local Government or
where the Committee sees a need to consider the relationship
between delivery of Commonwealth programmes and of related State
or Local Government programmes.
Other than in exceptional circumstances the Committee should
operate within the framework of data and evidence drawn from the
Commonwealth's own administration.
I propose to draw the attention of State Premiers to the establishmen
of the Committee.
If accepted, this resolution will establish the Committee. -I would
hope that within the term of this Parliament its continuing
existence will be assured by appropriate amendment to the standing
orders. The Committee will of course control its own operations.
I have during the course of my speech made a number of suggestions
as to how the Committee might operate.
Again not wishing to constrict., the Committee I seek leave to
inc'lude in Hansard operational : guidelines amplifying the Government's
views as to how it might seek to perform its important task.
I have no doubt that this reform in the procedures of the House
will come to be seen as an important step in the historic
reassertion by the Parliament of its right to control the Government':
expenditure. In recent times Parliament's role hasbeen challenged by attempts
of the Executive to minimize Parliamentary scrutiny of key
expenditure proposals.
There should now fortunately be no doubt that the control of
expenditure lies with the Parliament that is the ultimate
protection of our democratic system.
in this context the proposal to establish an Expenditure Committee
is a significant reflection of current concerns.
It marks the Government's desire to undertake a programme of
constructive reform which will strengthen our democratic institutions
and control by the people over the activities of Government.