PARLIAMENT’s Joint Public Accounts and Audit Committee (JCPAA) today tabled its report into the Australian National Audit Office (ANAO) and Defence Materiel Organisation (DMO) Major Projects Report (MPR) 2013-14.

Committee Chair, Dr Andrew Southcott MP, said that the DMO MPR constitutes the ANAO’s review and analysis of the progress of selected major Defence acquisition projects managed by DMO, and aims to consider cost, schedule, and capability performance and to function as a longitudinal analysis of procurement projects over time.

“Specific areas of focus in the Committee’s review of this year’s report include some particular projects listed in the ‘Projects of Concern’ as well as broader issues regarding governance and business processes,” Dr Southcott said.

The committee, in conjunction with Defence and ANAO, is now focussed on establishing a mechanism through which sustainment reporting can be better scrutinised.  Sustainment expenditure is currently at approximately $5 billion per annum and predicted to increase significantly over time. 

The committee considers sustainment expenditure to be an area requiring further parliamentary scrutiny on the adequacy and performance of Defence involving billions of dollars in the future and the scrutiny of sustainment expenditure will complement the reporting of acquisition spending in the MPR.

DMO’s abolition and the Department of Defence re-absorbing the DMO’s functions, has added an extra dimension to this year’s review.

“The Committee, along with ANAO, DMO and the Department of Defence, have worked diligently and constructively over the past eight years to progress the MPR to where it is today.  The reforms to the Department are designed to bolster efficiency and they should not result in a diminution in the intensity with which Defence approaches its work. 

"The Committee looks forward to working with the new reformed Department of Defence to produce the same high-quality MPR in the future so as to ensure that the improvement gains made in terms of project acquisition management over the past eight years are maintained.  This also applies to the new sustainment reporting that the Committee, ANAO and Defence are now embarking upon,” Dr Southcott said.

The JCPAA’s report can be found at the committee’s website http://www.aph.gov.au/jcpaa.

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CONSTRUCTION Skills Queensland (CSQ) is advising of a new ‘pre-qualification’ process for Registered Training Organisations (RTOs) interested in applying to deliver CSQ contracted programs in the building and construction industry.

CSQ contracts the services of RTOs on an annual basis to deliver a range of training and assessment programs which are outlined in CSQ’s Annual Training Plan.

This year for the first time CSQ requires RTOs to make an initial application to become a CSQ Registered Training Supplier.

Only RTOs that are approved as a CSQ Registered Training Supplier through this pre-qualification process will be invited to apply for CSQ funded training programs when they are released.

Further information for RTOs is available on the Training Procurement page of CSQ’s website www.csq.org.au

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THE Queensland Government could raise much-needed revenue by revamping the way it collects resources royalties from miners, according to a QUT economist. 

Dr David Willis, from QUT Business School, said with the State Government preparing to hand down its first budget in July, it must focus on ways to raise revenue.

"While the options available are limited, the government must relook at the income it recovers from miners and gas producers throughout the state to find the best value for Queenslanders," he said.

"Currently the royalties system is based on the price of a tonne of coal or iron ore. But this is clearly deficient given the miners' strategy of overproducing and oversupplying the market to force prices down to artificially low levels.

"Larger miners with larger shares of the coal, gas and iron ore markets employ this strategy to try to maximise production and market share and at the same time pay less in royalties.

"We are presently running record production numbers but getting record low prices. This suits the big miners but not the state or country. It is hurting Queensland and depriving the government of revenue it needs to fund services."

Dr Willis said an overhaul of the royalty system was a better strategy than simply raising royalties.

"While not advocating raising the royalties level, although there is a case for it, it makes more economic sense to look at a two-tier system for managing this important revenue stream," he said.

"Queensland and the other states need to look at royalties based on an average tonnage shipped as well as royalties per price, with the miners paying whichever is higher at the time.

"Therefore, whatever miners produce past a certain price point, they pay for based on tonnage. This allows for slumps in commodity prices and puts a valuable floor under royalties revenue that doesn't currently exist.

"So if, as is occurring now, miners are overproducing on to a falling demand market, Queenslanders would not be the ones to take the financial hit."

www.qut.edu.au

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CHIEF Executive Mark Stone said VECCI welcomes the release of Infrastructure Australia’s Australian Infrastructure Audit Report.

"The report contains a comprehensive and strategic assessment of Australia’s infrastructure, including current and prospective gaps across a range of infrastructure areas including transport, energy, telecommunications and water," Mr Stone said.

"The audit provides a compelling case to all governments that infrastructure reform must be a priority if we are to raise economic competitiveness and living standards.

"With a strong evidence based assessment of the key drivers of future infrastructure demand, especially population and economic growth, the report calls for a series of infrastructure related reforms to raise productivity and strengthen the economy."

These include:

• Better and more integrated infrastructure and land use planning.
• Further market reform, particularly in the transport and energy sectors.
• Increased infrastructure funding, encouraging more investment from the private sector in partnership with governments.      
• Improved governance in infrastructure planning and decision making.
• Changes by governments to make major project procurement more efficient, including reducing administrative burdens and streamlining assessment processes.
• More transparent links between user charges and expenditure on infrastructure planning, investment and maintenance. 

"Importantly, the report highlights the need to extract more value from our existing infrastructure assets through efficient management, improved maintenance and smarter use of technology," Mr Stone said.

"It also reinforces the benefits of a strong and consistent pipeline of well-planned infrastructure projects.  Such a pipeline is crucial to providing confidence and certainty for private sector infrastructure developers and investors.

"VECCI welcomes the report’s call for wider and deeper community engagement throughout the infrastructure decision making process.  In support of the development of the Australian Infrastructure Plan, VECCI will be making a submission on the findings from the audit following close consultation with our members."

The Victorian Employers' Chamber of Commerce and Industry (VECCI) is the most influential business organisation in Victoria, informing and servicing more than 15,000 members, customers and clients around the state.

vecci.org.au

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