Budget Estimates – Statement to Committee

I do, on this occasion as well, if I could, and I have just tabled the staff lists. They are being distributed now by the committee.

 

Thank you again for the opportunity to provide another opening statement. I would like to give the committee an update on the establishment of the Independent Parliamentary Expenses Authority.

 

As we have outlined, the government is undertaking the most comprehensive reform to federal parliamentarians’ work expenses in a generation.

 

Australians rightly expect that politicians spend taxpayers’ money carefully, ensuring at all times that their work expenditure represents an ethical, prudent and cost-effective use of public resources.

 

The government is committed to independent and transparent administration of parliamentarians’ expenses and IPEA will provide this independence and transparency.

 

On 13 January this year, the Prime Minister announced the government’s intention to establish this independent body to oversee parliamentarians’ expenses.

 

I am pleased to report that legislation to establish IPEA was passed 35 days later by the parliament. Less than three months after this announcement, IPEA was initially established as an executive agency through an order under the Public Service Act, and it commenced operation on 3 April 2017.

 

In establishing IPEA, we have acted decisively to reform the management of parliamentarians’ work expenses.

 

I would like to acknowledge those that followed the government’s lead and those that supported these significant reforms as they passed through parliament quite quickly.

 

A number of issues that have been constantly raised over many years have been directly addressed.

 

IPEA has responsibility for travelling expenses, including travelling allowance, of parliamentarians and MOP staff, the preparation and publication of reports and audits relating to all expenses for parliamentarians, and the preparation and publication of reports and audits relating to the travel expenses for MOP staff.

 

IPEA’s current functions as an executive agency will continue when it becomes a statutory authority on 1 July this year.

 

IPEA’s advisory function will be strengthened by the ability to make rulings in relation to travel and related expenses.

 

In addition, one of IPEA’s priority tasks will be to increase the timeliness of reporting on parliamentarians’ expenses. Currently, it is working to move from the regular six-monthly reporting to quarterly reporting and, eventually, to monthly reporting, which will be in an accessible and transparent format—quarterly reporting will happen later this year and monthly reporting is a little further off.

 

I am also pleased to announce that Ms Jillian Segal AM, Mr John Conde AO—the President of the Remuneration Tribunal—Dr Julianne Jaques, the Hon. Jeffrey Spender QC and the Hon. Gary Gray AO are providing independent advice to the CEO during the executive agency phase of the IPEA.

 

From 1 July, IPEA will have independent members appointed by the Governor-General. As set out in the Independent Parliamentary Expenses Authority Act, these members will include a former judicial officer, a former member of parliament, the President of the Remuneration Tribunal, a person with substantial experience in the field of auditing and a person with substantial experience in public administration or corporate governance.

 

I hope to be able to make a formal announcement about these members very shortly.

 

Despite what some may have read, the cost of the establishment of IPEA has been mostly absorbed by utilising the existing funds and resources transferred from the Department of Finance.

 

As outlined in the budget, the new funding for IPEA over the forward years is $12.4 million. This reflects additional costs associated with the new responsibilities to be delivered to increase transparency and accountability and the remuneration of board members.

 

IPEA has arisen out of a need to align parliamentarians’ activities with community expectations.

While these reforms are significant, they are also sensible and balanced. We do need to be careful. Parliamentarians, like everyone else, are not immune to innocent mistakes and sometimes there can be a slip of judgement. Sometimes a genuine error can be made by a claimant or an official.

 

If there is one genuine mistake in applying the rules, we should not always leap to a conclusion about the motives of that person. That is why I would put in place this independent authority with the capacity to provide confidential and clear rulings.

 

Until recently, the rules have been a complex framework of legislation, regulation, determinations, procedural rules, guidelines and accepted practice. Since being in this portfolio, I have worked to strengthen the shortcomings of the existing system as well as progressing other important reforms. They include the passage of the act that I have mentioned; very recently, the Parliamentary Business Resources Act, which implements the recommendations of the Independent Parliamentary Entitlements System Review; working on a definition of parliamentary business for the purposes of travel; the establishment of new value-for-money principles around parliamentarians’ expenditure and the establishment of a dominant purpose test for all travel undertaken; the abolition earlier this year, after it was promised in 2014, of the Life Gold Pass, except for former prime ministers and their spouses; and progress towards more regular reporting of parliamentarians’ work expenses.

 

A lot has been achieved in less than a year, but there is still much more work to be done.

 

In coming months, the work will focus on formal commencement of the IPEA as a statutory authority and the implementation of the Conde-Tune reforms and the Parliamentary Business Resources Act, including a definition of parliamentary business for the purpose of travel expenses and regular reporting.

 

I thank committee members for their indulgence.

Author: senatorryan

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