News Watchdog without teeth: How funding cuts threatens our democracy

Watchdog without teeth: How funding cuts threatens our democracy

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The same agency which shone a light on the Leppington Triangle dodgy land deal and the ‘sports rorts’ scandal is warning government budget cuts will make its job to uncover misbehaviour even harder.

It’s a problem that threatens the integrity of the Australia’s public service.

The work of Australia National Audit Office (ANAO) has been highlighted during this week’s Senate estimates, which heard more scandalous details of the Leppington deal and its referral to federal police.

It’s not the sexiest government division but the outcomes of its quiet, diligent work often hit Australian federal politics like a sledgehammer.

Auditors dig deep into government projects and spending, making sure taxpayers’ money is being well-spent and not frittered away.

Accountants and investigators poring over dense budget papers and spending reports might not sound thrilling but the audit office has exposed some explosive wrongdoing and occupies a critical role in keeping politicians and government departments honest.

Auditor-general Grant Hehir. Photo: AAP

And it’s why the ANAO’s ongoing budget cuts and fears raised by the auditor-general himself that the office has been hamstrung and may not able to meet its own goals due to resourcing is concerning.

“The ANAO budget is in loss for the third year in a row,” auditor-general Grant Hehir wrote in his annual report, tabled earlier this month.

He said this was partly due to upgrading technology in the office, but also due to funding cuts.

“The deficit also reflects our transition to a lower funding base,” he continued.

Respected think tank The Grattan Institute reported this month that “for the tenth year in a row, the Australian National Audit Office… had its funding cut in the federal budget.” In this month’s budget, the government snipped the ANAO’s funding by around $600,000.

Just two weeks earlier, Mr Hehir had dropped his scorching report into the Leppington Triangle deal, in which he excoriated infrastructure department officials for “inadequate and unreliable” advice which “fell short of ethical standards”.

Mr Hehir warned the cuts to the ANAO would harm his office’s ability to do its job, saying without extra cash, “the number of performance audits tabled in the Parliament will continue to reduce.”

Of course, for a government – any government – having fewer investigators poking into the nitty-gritty of your plans and spending might not be the worst outcome.

Projects are prone to cost blowouts, unforeseen expenses, and as has been seen this week with the ‘airport rorts’ affair, even potential criminal behaviour and “fraud”.

The Leppington Triangle deal is under intense scrutiny. Photo: ANAO

But the ANAO’s unparalleled ability to dig into projects and uncover potential scandal is needed, even indispensable, in the type of open and transparent society that Australia should be.

The office says its mission is “to support accountability and transparency in the Australian Government sector” and to “contribute to improved public sector performance.”

Treasurer Josh Frydenberg defended the budget trimming by saying the funding was “roughly similar, and importantly the average staffing levels are broadly similar as well” in an interview on ABC’s Insiders program.

He said the office was taking a $600,000 haircut – but the budget papers reveal the agency’s funding is dropping from $112 million last year to $98 million this year.

In the same interview, Mr Frydenberg said much of that $14 million discrepancy was due to unspent cash from previous years being factored into its budget allocation.

Either way, it’s a far cry from the multi-million dollar funding boost Mr Hehir asked for before the budget.

In parliament this month, Prime Minister Scott Morrison said a 10-year review into the ANAO was being carried out, and that once the results are in, “we will consider the resourcing for the ANAO”.

But this year alone, nearly $3 million is being cut from performance audits, which will almost certainly lead to fewer reports being finalised.

Taxpayers bought land near Western Sydney Airport for 10 times what it was worth. Photo: AAP

The funding cuts come at a time of other accountability questions for the federal government. With the NSW Independent Commission Against Corruption uncovering damning evidence of former state MP Daryl Maguire’s private business dealings while in office, including running a ‘cash for visas’ scheme, the question of a national ICAC has again reared its head in federal parliament.

The Labor Party and some independents have long called for such a body, while the Coalition government has resisted pushing for a full ICAC-style body to operate at a national level. Instead, the government says it wants to bring on a blunter Integrity Commission.

But this week, it was also revealed that draft plans for such a body have been with the government since late last year, with little progress made in 2020.

The government has defended this inaction by saying that it has been preoccupied with bushfires and the pandemic.

But the heat is now being turned up on the government, as it rolls out an unprecedented spend on social programs, infrastructure and corporate assistance for employers.

Hundreds of billions of dollars have flown out the door in 2020 to deal with the pandemic and bushfires, and questions are being raised over what may be uncovered by a stronger accountability process.

As the Grattan Institute report notes, such spending is “exactly the types of political danger zones that benefit from scrutiny.”

“When the government is shrinking the budgets of the few agencies that ask difficult questions — meanwhile attempting to justify its glacial progress on a federal ICAC — perhaps the only logical conclusion is that accountability isn’t high on its list of priorities.”

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