I rise to speak on the Auditor-General Amendment Bill 2011 to amend the Auditor-General Act 1997. The coalition's main concern is that independent contractors will be subject to auditors from the Auditor-General if they receive government contracts. This would create an extra layer of bureaucracy and increase costs and convince many smaller contractors not to bid for contracts due to extra regulatory requirements.
The coalition therefore proposes that the private member's bill be amended to remove the provision that contractors could be audited. The coalition's policy is to create an office of due diligence to avoid the waste in the first place rather than report on it after the event. While the coalition may support the intent of this legislation, it recommends that we oppose the bill for the following reasons: firstly, the increase in regulatory burden. The bill would require any supplier to a government agency to be prepared to undergo a full investigation by the Auditor-General at any time. This would place added costs and compliance burdens on business and, being a small business owner myself before coming to this place, I am very in tune with the amount of compliance that is already in place for small businesses of up to 100 staff.
Secondly, the bill would bring yet more government intervention. Under Labor we have seen the greatest growth of government in living memory. If supported, this bill would further increase that burden on any business doing its work with government. I also draw attention to the increase in bureaucracy since this Labor government came to power. Since 2007 we have seen an increase of more than 22,000 staff in the Public Service here in Canberra alone.
The bill also creates an impediment for doing business with government. With this level of scrutiny and intrusion, many businesses—especially small- and medium-sized businesses—may choose not to do business with a government agency. Therefore, under these circumstances only the biggest companies with the resources available to them would be prepared to comply with an Auditor-General's investigation or might be willing to tender for contracts.
Thirdly, it would lead to greater costs for government services. For a bill that purports to be protecting taxpayers and ensuring value for money, there is no doubt that the level of compliance required creates the very real possibility that tender prices will have to increase to cover the potential audit requirements.
Fourthly, it chases the waste of taxpayers' money after that event. Instead of putting better prevention systems in place to reduce the likelihood of waste, this bill seeks to enhance the powers of the Auditor-General to investigate after the horse has bolted. I now turn to the establishment of a due diligence office. Under the coalition, every new major government spending program will, before it commences, be properly assessed for its capacity for waste, abuse and mismanagement. We want to pre-empt problems not mop them up afterwards. Central to our strong approach on stopping the waste will be the establishment of an office of due diligence within the Department of the Prime Minister and Cabinet. The office of due diligence will comprise officials seconded from the Australian National Audit Office and the Commonwealth Ombudsman as well as people with private sector contract expertise. The role of the office of due diligence will be to examine programs before they are approved by cabinet to ensure that each project is efficiently designed, has a detailed implementation plan and will be implemented in a manner that provides maximum value for the taxpayer.
We have great confidence in the Auditor-General. However, we do have concerns with his role in assessing private contractors. An earlier speaker raised the issue of the area consultative committees and made the point that there was a bias towards coalition seats. I was involved in a community which was a recipient of federal government grants that came through the area consultative committee. I can assure this room that, from a regional perspective, it is one of the few places for regional Australia to get support. The member raising the point is a strong advocate of regional Australia, but I can assure you that it was one of the few areas where we could actually get some support. Value for money was also mentioned. I think that the government is potentially being hypocritical when it talks about value for money—we only have to look as far as the NBN, or possibly the BER, for situations which are rather embarrassing to this House.