Thank you David for the kind introduction. And thank you for the opportunity to speak to you this morning.
As we heard a moment ago, this is the first of what I believe will become an increasingly important forum.Let me say at the outset that this forum has my wholehearted support.
I want to encourage meaningful and constructive dialogue
between each of you between you and your respective Departments and between you and my Department.
What Id like to talk about today sits well with the aims of this forum.
Today I want to share my thoughts on Better Government.
It is a broad theme - and one few would disagree with.
But I want to give you a sense of why it is an important focus for me as Minister and for this Government, what it means and the steps we are taking to continue the process of reforming how we do our business how we deliver Better Government.
Better Government
Improving Government is an ongoing task. It is about the standards we set for ourselves as a government. It is about what the community and citizens expect of government and how we deliver.
It is the goal of continual improvement. Expectations of governments continue to grow with each generation, and each generation of government must rise to meet that challenge.
The role of government goes beyond the political colours of Labor or Liberal. It is not about point scoring or posturing.
It is about government having a positive impact; being an enabling force in peoples lives.
Let me set out what I mean by Better Government.
It is government driven by a clear and strong vision for the future.
It is converting that vision into positive outcomes for people in their everyday lives.
It is combining imagination and purpose with rigorous delivery.
Governments vision must be anchored in an end point. And that end point is the benefit to Australians and their families.
So government should articulate the policies and programs to deliver on its vision. The policies and programs that will provide the services and grants, the incentives and support, and the opportunities to Australians.
And while the specific expectations of the community change, the basic requirements remain constant.
In their everyday interactions with government, citizens expect high standards.
They dont expect perfection, but they do expect a rigorous and methodical approach to service delivery. This Government is committed to effective program delivery vision, imagination and purpose in government will always disappoint if they are not backed by rigour.
We have great ambitions for this country. The realisation of these ambitions has to be supported by robust implementation.
We must be methodical and rigorous in approaching policy, we must deliver the outcomes expected of us.
We have outlined our commitment to see every child get a world class education. To deliver this, we are investing in school infrastructure and improving teacher quality.
The Government is working towards a world class health care system that is accessible and affordable. To deliver this, we are investing in hospitals, training more doctors and nurses and better connecting patients and their records through eHealth initiatives.
The Government is committed to improving the productivity of our economy to raise the standard of living for all Australians. To deliver this, we are training more apprentices, expanding universities and investing in roads, ports and broadband.
Better Government is about ongoing attention to implementation and honest evaluation to test whether weve achieved our stated outcomes.
Ensuring these results are delivered relies on a continued focus on implementation.
When it comes to implementation and delivery, Governments have to equip themselves with the tools to deliver at the standards expected by citizens.
This is a key role of the Finance Minister in government.
After delivering the Governments fiscal strategy my most immediate challenge delivering better government is a main priority for this term.
The two roles are in fact re-enforcing.
Government resources are scarce, yet the expectations of the community are rising and all demands cant be met.
If the government can provide a program more efficiently and effectively, it frees up resources, reducing further calls on the Budget.
It also opens opportunities. Not improving the efficiency of one program today means another, possibly more worthy program, cannot be funded tomorrow. Budgeting, at its core, is about making choices, about prioritising. Improving delivery gives Governments the capacity to do more with less. Put simply, its about making every dollar go as far as it can.
This is true in each annual Budget process, but it is also true across Budgets. The subtext to the long term fiscal challenges facing Australian Governments is rising expectations and demographic pressures outstripping revenues.
This is most evident in health. Each advance in medical technology and pharmaceuticals naturally brings about a rise in expectations.
The most recent intergenerational report projects Australian government spending on health to rise from 4% of GDP to 7% by 2049.
Invariably this will require Government to increase the rates of spending in health care. Key to this will be looking to do more within existing funding.
To deliver the same health outcomes through better program and system design. Through managing risks early to prevent high-cost services later in life. Through making sure that the services delivered are effective and dont require a patient getting multiple treatments.
The Government has a significant fiscal challenge ahead of it. But it is one we will meet this Government will deliver a surplus Budget in 2012-13.
This is our first task.
However we cannot take our eye off the longer term pressures. We have to get the Budget on a sustainable footing. But we also have to focus on the implementation and the delivery of government programs and services.
The Better Government agenda will build on existing work in program delivery and implementation.
The Better Government agenda will take some years to pursue.
The outcome will be a more efficient and focused Commonwealth sector with established mechanisms to facilitate continuous improvement and review.
This work will come in two, connected streams. The first is improving delivery of government services, policies and programs.
The second stream, is upgrading the public management framework. This will update the principles and legislative foundations that set the parameters for government operations.
Together these work streams provide the first steps of our Better Government agenda.
Improving delivery of Government services, policies and programs
A key priority for me as Finance Minister is improving the delivery of Government services, policies and programs.
There will often be some variation in how this principle is applied, given the variety of programs and services delivered by government.
The first body of work will focus on improved implementation and assurance mechanisms, including through improved monitoring and reporting processes. It will also look to garner the expertise of service-delivery agencies in program design.
This will imbue the principles of service delivery in all aspects of governance ensuring that in government program design and implementation are synonymous, that consideration of one automatically triggers consideration of the other.
Broadly stated, this is putting in place the systems and measures that will provide greater certainty around the implementation of programs.
The goal is to achieve change across the public sector that will improve the delivery of services, policy and programs and give the Government and the public greater confidence that implementation is consistently efficient and effective.
Strengthening internal audit committees
This morning I am pleased to announce an important step in delivering Better Government reform.
Internal audit is a key function in ensuring the delivery of government policy and the management of implementation risks.
It strengthens an already invaluable function of governance. The private sector knows too well the benefits of a strong internal audit function. They recognise that internal audit can optimise the delivery of services, and can act as a check when control processes fail. It was internal auditors that uncovered billions of dollars in fraud in WorldCom in the US in 2002.
Closer to home, the Australian Stock Exchange principles recognise the value of strong risk management practices it is a necessity of good governance.
It is as true in the public sector, as it is in the private sector strong internal audit is a core requirement of good government, for managing risks and ensuring the effective delivery of services.
In 2011 I will be proposing amendments to regulations under the Financial Management and Accountability Act, to strengthen the role of internal audit committees.
These committees play an essential role in the governance framework of public sector entities, whether they are under the CAC Act or FMA Act.
They assist an entitys leadership and management to ensure that key controls are operating effectively and are appropriate, and to meet their statutory obligations.
As you would know, from 1 January 2009, the Government introduced new regulations applying to CAC Act bodies which enhanced the independence of their internal audit committees.
The reforms I announce today relate to FMA Act agencies Departments of State, like my own Department, but also bodies like the Australian Electoral Commission and the Australian Taxation Office
There are several elements to our proposed amendments to the FMA Regulations.
Firstly, to see that internal audit committees review the effectiveness of agency governance arrangements on a periodic basis, and suggest improvements where appropriate to the chief executive to assist in the discharge of their responsibilities.
We also will require agency Chief Executives when establishing an audit committee, to appoint people with appropriate skills and experience, and to consider choosing members with an eye to the key risks facing an entity, including program delivery and implementation risks.
The revised regulations will provide that when establishing an audit committee, the chief executive ensures that at least one independent member is appointed, and preferably more. The independent member could be the Chair.
The changes will provide that audit committees should determine, and record, the standards to be used by agency internal auditors in order to make clear the quality standards expected.
This change would insert in the Regulation the current ANAO Guidance on standard setting.
Finally, new provisions would be added to explicitly recognise the role played by an audit committee in reviewing the adequacy of an agencys internal control environment and legislative compliance.
These amendments to the FMA Regulations are a first step.
In making these amendments, the Government is not attempting to establish one model for the conduct of an audit committee.
No two audit committees will function in exactly the same way, and nor should they.
Our changes to the FMA Regulations will be of particular help in agencies risk-management processes that is in properly identifying and managing risk.
While these proposed changes to the Regulations will provide the framework for improved audit functions in the end the effectiveness lies with Chief Executives.
I would ask that CEOs embrace internal audit functions as a positive asset, to see their capacity to improve an agencys operations and delivery, and not, as can be the case, as a burden or a tick-the-box exercise.
I would also ask that CEOs take this opportunity to deepen their relationship with their internal audit committees.
The proposed changes, if embraced, will see a strengthened framework for program and service delivery, by strengthening internal audit committees and ensuring that those providing advice to CEOs are appropriately skilled.
Upgrading the Public Management Framework
The second stream of work is addressing the Public Management Framework, made up of the laws and guidelines that control the way the Australian Government operates and reports on its activities.
The way that government spends money, forms agencies and establishes governance processes.
The framework is subject to continuous analysis and improvement.
However, given that the genesis of the financial management framework was in the early 1990s, it is appropriate to step back and assess the underlying foundations.
It is timely to bring together current initiatives and opportunities to comprehensively review the public management framework for the immediate and longer term.
The government will not be resorting to ad hoc responses. Nor will we be taking the path of increased red tape.
This is a broader process and it will provide the context and the framework for the work being undertaken on program delivery.
This stream of work will focus on:
- improved accountability;
- financial framework initiatives;
- changes to the governance of Australian Government bodies and GBEs; and
- improved public reporting.
These will clarify responsibility and accountability; simplify processes; provide for wider engagement; and, more effectively utilise expertise across government.
This will lead to operational efficiencies through clearer guidance and streamlined processes, including providing whole-of-government practices for agencies to utilise where appropriate.
Underpinning this reform will be two first-principle reviews:
The first concerns the financial legislative framework, known as the Commonwealth Financial Accountability Review.
This will be a significant project for my Department that will take several years to complete and involve extensive consultation with stakeholders.
Only by ensuring the legislative foundations are sound, will the other reform areas be successful.
A second review concerns the governance of Commonwealth Government Business Enterprises (GBEs), including the likes of Australia Post and Medibank Private.
The purpose is to update the GBE Guidelines which have largely remained unchanged since 1997. These outline the relationship between the Commonwealth as a shareholder in GBEs, including improving board processes.
I would anticipate the bulk of that consultation and policy work will take place next year.
This process will ensure that the arrangements that guide the interactions between government as a shareholder and the GBEs are appropriate to the times.
Concluding remarks
The Prime Minister, in her recent CEDA speech, said she is deeply conscious of the importance of governing for the long term.
She said that we made good decisions in the crisis, but we were in a strong position to make them because we had a legacy of more than 25 years of economic reform.
The PM also said we will pursue our reform agenda with discipline and rigour.
Today I reiterate those remarks.
The Government is serious about governing well, about ensuring policy development and management of government expenditure is effective and efficient and meets the expectations of the community.
That we are determined to deliver Better Government.
As I said at the outset, this forum has my wholehearted support.
So I also hope you can use this opportunity to learn from each other how you can improve the programs and services you deliver to the Australian people on behalf of the Australian Government.
I wish you well in your discussions.
Thank you.
ENDS
