April 4, 2016  |  second reading speech

Integrity and Accountability Legislation Amendment (A Stronger System) Bill 2015

Mr CARROLL (Niddrie) — It is my pleasure to rise and make a contribution to the debate on the Integrity and Accountability Legislation Amendment (A Stronger System) Bill 2015. I think this is very important legislation. We are delivering a modern and effective integrity and accountability regime to ensure that the Victorian public and indeed the Victorian public sector maintains and is embedded with the highest standards of conduct. Key reforms in this legislation will give the Independent Broad‑based Anti‑corruption Commission the power to investigate the offence of misconduct in public office and the conduct of people who obtain improper benefit when dealing with public officials. I agree with the member for Malvern that this issue has hit home lately. We have seen banker schools, the ultranet and a whole range of issues highlighted, which I think people in the public sector and all Victorians have been dismayed to see.

This legislation brought about by the Special Minister of State is really about giving teeth to the integrity regime to ensure that we have the most accountable 21st century laws to maintain the highest standards of conduct in public office. Importantly, though — and it is great to have the Minister for Local Government at the table — this legislation will also require public sector body heads, including local councils and CEOs, to report possible corrupt conduct to IBAC. Under the former government’s legislation this requirement was discretionary. We are now making key reforms to ensure that at all levels of government we have the most adequate and responsible integrity regime in place.

The bill removes the requirement that IBAC must have prima facie evidence of a relevant offence before it can investigate corrupt conduct and allows IBAC to investigate all corrupt conduct involving public officers and public bodies, not just serious corrupt conduct. The bill also gives the Auditor‑General follow‑the‑dollar powers that will allow him to obtain information from non‑government entities to better scrutinise government service delivery.

On that note, I just want to acknowledge that throughout the term of the previous government Josh Gordon of the Age newspaper wrote a lot of articles on this issue, and I will come to them a little bit later in my contribution. In the context of the east–west link he suggested that the follow‑the‑money powers for the Auditor‑General were a critical reform that was long overdue. Successive auditors‑general have called for that power. The Special Minister of State is delivering on that as an election commitment. This body of legislation, which is incredibly substantive and has been through an incredible amount of consultation, is going to make an incredible difference to our integrity and probity regime.

Importantly this legislation provides for many other changes that will resolve a lot of jurisdictional issues between integrity agencies, and it also improves the cohesiveness of the overall system. It is important to note that the Independent Broad‑based Anti‑corruption Commission Committee in its report on the bill tabled on 10 February said that the bill provides ‘significant changes’ and is a ‘positive step’ forward in addressing a number of concerns previously raised about integrity legislation.

We had an election where we went to the people and said we would deliver a whole new integrity regime. This included lowering IBAC’s investigation threshold, removing the requirement that IBAC have prima facie evidence of a relevant offence from IBAC’s investigation threshold, allowing IBAC to investigate misconduct in public office and providing the Auditor‑General with follow‑the‑dollar powers. Importantly though I think it needs to be understood that resolving jurisdictional issues in this area — between IBAC and other integrity bodies, clarifying how IBAC works with the Ombudsman and dealing with different subject matter to ensure that we can resolve any jurisdictional issues — is a key component of this legislation.

We have been very aware of the need for further reforms in relation to our integrity regime, and being vigilant on that matter is very important. I know that the Special Minister of State is very keen to engage the public and go on an educational consultation exercise in relation to our integrity regime. As I said earlier, key stakeholders have been consulted. Obviously IBAC, but also the Ombudsman, the Victorian Auditor‑General’s Office, the Public Interest Monitor and the Victorian Inspectorate were consulted during the development of this bill. The government will continue to work with these stakeholders and others to ensure that our integrity and accountability regime is second to none.

We do understand that we have to improve the interlock between the integrity and accountability bodies, and this bill indeed does improve that, providing the Ombudsman with greater flexibility in dealing with protected disclosure complaints and allowing for protected disclosures to be dealt with more effectively but also allowing the Ombudsman and the Auditor‑General, in appropriate circumstances, to share information with relevant bodies. I will get to some of the Ombudsman changes very shortly.

The member for Malvern raised the definition of ‘misconduct’ in public office and discussed why we are not using the statutory definition that we use in common law. I do not have an answer for him right at this time. I do note, though, that that definition has been used, that the bill went through the committee and that the committee was fine with that definition being used. But if I can get some further advice for him, I will do that for a subsequent speaker here or in the other place.

It is very important, though, I believe in relation to the follow‑the‑dollar powers being given to the Auditor‑General. The member for Malvern was a big proponent of the east–west link, and we have also had other major projects where we have seen successive auditors‑general, from Des Pearson on, calling for this legislation to come. One article that I read in my research when preparing for this speech, dated 15 January 2013, headed ‘Baillieu hides project costs’ and written by Josh Gordon, goes to the heart of what this bill seeks to do. It says:

Victorian taxpayers will be left in the dark over the cost of high‑profile infrastructure projects such as an east–west road link …

unless a sweeping overhaul of the state’s integrity regime does occur.

A statement on the Victorian economy released by Premier Ted Baillieu just days before Christmas reveals the government will ‘no longer disclose’ the cost of major projects when they are announced.

The public will effectively be denied information on the estimated cost of major projects for months, potentially years, until business contracts have been finalised.

Mr Gordon goes on to say:

Outgoing auditor Des Pearson used his final annual report to warn that his ability to scrutinise taxpayer‑funded projects had ‘diminished rapidly’.

The follow‑the‑dollar powers are very important.

I want to commend Fairfax in particular — and I know it is #fairgofairfax at the moment — because of the reporting by Josh Gordon over successive years on the follow‑the‑dollar powers. I understand too that this cuts both ways, that we did major projects where the Auditor‑General would have liked follow‑the‑dollar powers, but I think it is an important reform and it brings us in line with other states.

The Auditor‑General is not about wanting to audit the private sector. He is wanting to make sure that when taxpayers dollars are invested in a public project with a big infrastructure provider, which is often common in public‑private partnerships, that he can see that the taxpayers dollars are being spent wisely. Josh Gordon two years ago wrote under the heading ‘When private contracts are a public issue’:

There is a gap in Victoria’s accountability regime that is growing wider by the day — although you wouldn’t necessarily know it, such is the insidious nature of the problem.

I will not go through his whole article, but he did end by saying:

The government is now considering an overhaul it says will be discussed with the new Auditor‑General. Although when this will happen is anyone’s guess.

That was in November 2012. Here we are in 2016, a new Labor government is in power and that is happening. We are now getting the follow‑the‑dollar powers for the Auditor‑General. That is very important.

When it comes to misconduct in public office, whether it be falsifying accounts to conceal or obtain a benefit or whether it be something else, we need to make sure that IBAC has the power to investigate it. This reform, this major body of work, has been done by the Special Minister of State working with the key stakeholders, the key bodies. I commend him for his work. He has done an incredible body of work here.

I wish this bill a speedy passage through the lower and upper houses. I think it is going to make a real difference to our integrity regime. It has been strongly endorsed by the IBAC Committee and the Law Institute of Victoria. All the relevant offices have been consulted and worked with to get this important legislation through.

It was an election commitment to allow IBAC to investigate corrupt conduct involving common‑law offences of misconduct in public office. We are very committed, as both sides of politics are, to ensuring that we have the highest standards for our public sector bodies. Too often in most recent times I have highlighted the need to make sure our IBAC has the strongest teeth possible.