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

Ms PENNICUIK (Southern Metropolitan) — I am very pleased today to speak on the Integrity and Accountability Legislation Amendment (A Stronger System) Bill 2015. In terms of this legislation and the changes it makes in particular to the Independent Broad-based Anti-corruption Commission Act 2011 I have to say that I have spoken many words in this chamber on the various bills that passed through the previous Parliament to set up that act. I think some seven or eight bills in total set up both IBAC and the Victorian Inspectorate, and I have spoken many words on those particular pieces of legislation.

The bill before us makes a number of amendments to that act and also to the Audit Act 1994, particularly to provide the Auditor-General with follow-the-dollar powers, and also makes amendments to the Ombudsman Act 1973 to remove the requirement for complaints to the Ombudsman to be in writing and to provide the Ombudsman with, the minister said, greater flexibility in relation to protected disclosure complaints. I will talk about that a little bit further.

The Greens support the bill, but while we are supportive of the amendments in the bill we are of the view that the government should be going further in terms of the changes to the IBAC legislation and the changes to the Audit Act in the bill.

Mr Rich-Phillips started out with a bit of a history lesson. He claimed credit for the introduction of IBAC and almost that it was the coalition's idea. But I have to say that the very first motion moved by the Greens in state Parliament in 2007, under the former Labor government, was to require the Attorney-General to request the Victorian Law Reform Commission to inquire into the best model for the establishment of an anti-corruption body for Victoria. So the first ever motion moved by the Greens in this Parliament was on this particular issue. It was moved by my colleague Mr Barber.

That motion was not supported, but after much public pressure and pressure by the Greens the matter was finally referred to the public sector commissioner, and the Proust report recommending a model was released in May 2010. After that the former Liberal-Nationals coalition government indicated that it would establish an anti-corruption body, as it said, closely modelled on the New South Wales Independent Commission Against Corruption (ICAC). However, IBAC as currently constructed does fall short of the New South Wales model in a number of ways, some of which are ameliorated by this bill.

The Greens raised concerns at the outset that IBAC was not created in an open and accountable way. In fact a series of bills were presented to the Parliament that set up bits of IBAC. There was an inquiry that was undertaken but never made public, and it was very difficult for the public and members of Parliament to follow the process and know from whence or why certain things were being done in terms of establishing IBAC. IBAC, we said from the outset, lacked the powers of other similar bodies across Australia, in particular the Crime and Misconduct Commission in Queensland, the Corruption and Crime Commission in Western Australia at the time and the New South Wales ICAC. The government had said it was going to model it on that body, but it did not actually do that.

We said at the time that the definitions of 'corrupt conduct' and 'serious corrupt conduct' in the legislation were fundamentally flawed. During the debate on the Independent Broad-based Anti-corruption Commission Amendment (Examinations) Bill 2012 I pointed out that the scope of corrupt conduct, on which the whole regime rests, was a basic problem and that especially confining the scope of the jurisdiction to IBAC to 'serious corrupt conduct' would 'severely hamper its ability to investigate corruption'. Others, such as the law institute, the Accountability Round Table and even the current Commissioner, Stephen O'Bryan, in his first report, have made similar comments.

In 2012 I moved a motion requesting that the government release the documents that were considered by the consultation panel, after failing to obtain them under FOI, but the government refused to release the documents, just adding to the lack of transparency in the establishment of IBAC. As I said, from the start the Greens highlighted a number of fundamental flaws with the model which the former government had put forward in a serious of bills that established IBAC. I moved a series of amendments to the IBAC bills, including to broaden the jurisdiction of IBAC to beyond serious corrupt conduct, to be similar to corrupt conduct as it is defined in section 8 of the New South Wales Independent Commission Against Corruption Act 1988; that the public interest should be the paramount consideration in IBAC exercising its functions; that IBAC should have the power to investigate breaches of MP and ministerial codes of conduct; not limiting the definition of corrupt conduct by tying it to indictable offences — which it currently is and which this bill goes some way to ameliorating; and that a separate body should be maintained to investigate police misconduct, particularly injury and death as a result of police conduct, as recommended by the former Office of Police Integrity (OPI). That is a more accurate reflection of history with regard to the setting up of IBAC by this Parliament.

In this bill the key amendments in part 2 to the Independent Broad-based Anti-corruption Commission Act 2011 include expanding the jurisdiction of IBAC to cover all corrupt conduct rather than only serious corrupt conduct. The bill makes amendments to several sections of the act to replace the term 'serious corrupt conduct' with 'corrupt conduct', which is something the Greens do support and have, as I mentioned, raised concerns about in the past. Clauses 5 and 8 require the commission to prioritise serious and systemic corrupt conduct. So while the commission will be able to look at corrupt conduct, it will — similarly to ICAC — be required to prioritise serious or systemic corrupt conduct in its investigations and activities. That is taking us a little bit more towards the ICAC model.

Clause 4 broadens the definition of corrupt conduct further by removing the requirement that the conduct would, if the facts were found to be beyond reasonable doubt at a trial, constitute a relevant offence, so that when considering an investigation IBAC need not consider whether the facts giving rise to corrupt conduct would be found proved beyond reasonable doubt at trial. It will be sufficient that IBAC, according to the requirements of amended section 62, would only need to suspect on reasonable grounds that the conduct constitutes corrupt conduct. The Greens will support this reform, as I have argued against requirement in the past in Parliament.

I take up the point Mr Rich-Phillips made during his contribution when he mentioned that IBAC is not a judicial body and is not required to ascertain the guilt or innocence of any party. I agree with that. It is one of the fundamental flaws of the current constitution of the legislation that IBAC is required, if the facts are found beyond reasonable doubt at a trial to constitute a relevant offence — and a very limited number of relevant offences currently under the act — to make a judicial judgement as to whether, if something went to trial, it would result in a conviction. I do not think that is what IBAC is set up to do. It is set up to investigate allegations of corrupt conduct, to follow up those investigations, to make a report on them and to make recommendations as to whether persons should be in fact charged with offences, but it is not a court to actually convict a person of an offence. This has been a fundamental flaw in the legislation from the start, in my view and in the view of many other commentators as well. It is good that this bill is actually moving away from that particular threshold in the act.

As I said, in the past IBAC has had to meet the threshold that the conduct would constitute a relevant offence as required under the act. However, it should be noted that in the definition of corrupt conduct, the conduct would still be constituting a relevant offence, as the government has left the words 'relevant offence' in section 4 of the act, and under the definition of relevant offence under the act it provides for an indictable offence against the act and only specific common-law offences.

I have several amendments to the bill, the first of which goes to this particular point, so it might be a good opportunity to have those amendments circulated now.

Greens amendments circulated by Ms PENNICUIK (Southern Metropolitan) pursuant to standing orders.

Ms PENNICUIK — The first of the amendments goes to the definition of a relevant offence and replaces it with 'a criminal offence' or 'a disciplinary offence', and that follows the definition under the ICAC act. It is a broader definition and not tied to relevant offences, but even so, it is still not quite as broad as the definition in the ICAC act, which is very broad. We must remember that in terms of uncovering corruption in the public sector a lot of the activity is not necessarily criminal activity per se. It could be things such as nepotism. It could be things such as omitting to do certain things or doing other things, which may or may not constitute criminal offences and certainly may or may not constitute indictable offences but may give rise to corrupt conduct which may affect the carrying out of duties in the public interest. That is why the Greens want to see this particular definition made more broad and not tied so much to indictable offences such as it is under the act currently.

Clause 4 inserts section 4(1A), which provides that, in determining whether the conduct is corrupt conduct, IBAC may assume that the required state of mind to commit the relevant offence can be proven, so IBAC can assume that rather than having to prove that.

Clause 4, which also inserts section 4(1)(da), adds to the definition of corrupt conduct and includes conduct by any person, whether or not a public officer or a body, that is intended to adversely affect the effective performance or exercise of a public function or power by a public officer or a public body that results in the person or associate of the person obtaining a licence, permit, approval, authority or entitlement under any act or subordinate instrument; or an appointment to a statutory office or as a member of the board of any public body; or a financial benefit or real or personal property et cetera. This is also in keeping with the recommendations by particularly the Law Institute of Victoria, pursuant to the New South Wales independent panel's recommendations in this regard, and we would support that.

The bill also provides IBAC with preliminary inquiry powers to determine whether to dismiss, refer or investigate a complaint or notification, and these powers are limited to the power to request information from a relevant principal officer of a public body and the power to issue a witness summons to any person requiring a person to attend at a specified time and place on a specified date. It is an offence to not comply with a witness summons so issued. Also a person under 18 cannot be summoned unless information they provide is compelling, and a person under the age of 16 need not comply at all. We support this reform, and we note that the New South Wales ICAC already has this power.

The bill also gives IBAC the power to issue a suppression order prohibiting or restricting publication of any information or evidence given during a public examination if it is considered necessary to prevent prejudice or hardship being caused, to avoid prejudice to legal proceedings or for any other reason having regard to the circumstances.

Clause 20 inserts new provisions to provide that IBAC may issue directions for or with respect to notifications to IBAC that are made in accordance with a mandatory notification provision. However, the directions will not apply to independent officers of Parliament, such as the Ombudsman or the Auditor-General. The bill also provides that public service heads and local council CEOs will be required to report corrupt conduct to IBAC. We support that as well.

The other amendments to the bill that we will move when we get to the committee stage are in relation to IBAC seeking information. The bill will provide for IBAC to seek information from department heads. We suggest that this should also apply to the relevant minister if that information is required by IBAC.

Those are the major amendments we will be moving. I have not had much of an opportunity to speak to members of the other parties about these amendments, so I am not sure what their position is on them. However, I did notice that Mr Rich-Phillips suggested he would consider them all as we move into the committee stage.

An issue that has not been covered by this bill is one I have raised many times in the Parliament, and that is the issue of complaints about police misconduct. Of course the Office of Police Integrity was subsumed into IBAC when IBAC was set up. Many OPI staff went over to IBAC, and the issue of misconduct by police was taken over by IBAC. Prior to that the Greens moved a motion in Parliament that the issue of police misconduct and the issues of death or injury of persons as a result of police contact should be overseen by an independent body. At the moment police misconduct can be referred to IBAC, but I understand that the majority of police misconduct matters that are referred to IBAC are referred back to the police. So the police virtually do, with their own special unit, investigate allegations of police misconduct — either their own motions, those that are referred directly to that particular part of the police force, or those that are referred back from IBAC to them.

As to the issue of death or injury as a result of police contact, it is very hazy as to how that is actually handled. It is certainly not handled in a way that is independent of the police. This is an outstanding issue that is not covered by this legislation, and it is one that the Greens intend to pursue again in this Parliament. I have pursued it in previous parliaments by moving motions for the establishment of such an independent body to deal with police misconduct, human rights contraventions by the police and serious injury or death as a result of police contact.

The main amendments this bill makes to the Audit Act give the Auditor-General so-called follow-the-dollar powers. As we know, governments are more and more relying on private sector bodies, non-government organisations, contractors and subcontractors to carry out the work of government. In 2009–10 the previous Public Accounts and Estimates Committee reviewed the Audit Act and recommended that follow-the-dollar powers be included in the Victorian Audit Act, which this bill does do. Of course those powers are already present in audit acts of other auditors-general around Australia, in New Zealand, in Canada and in some of the other Westminster systems. This is a welcome provision being added to the Audit Act by this bill. The Greens do support it, and it is long overdue.

The bill makes some other amendments to the Audit Act, such as altering the circumstances under which the Auditor-General must report corrupt conduct to IBAC, and these are consistent with changes to the similar notification duties under the IBAC act. The bill introduces the new definitions of 'associated entity' and 'third party contractor', which is basically to allow for the follow-the-dollar powers that are introduced by this act. It amends the objectives of the Audit Act, inserting a new section that elevates the determination of whether there has been any wastage of public resources or any lack of probity or financial prudence in the management or application of public resources from a matter to which regard must be had to an objective of the act.

One thing that has been left out is the addition of 'environment' to the objectives of the act, which has been asked for by the Auditor-General in his 10 requests, which are up on the Victorian Auditor-General's Office (VAGO) website. It is present in most of the other audit acts around the country and in other jurisdictions. That is one of the other amendments I have circulated, which would be to add the provision that the Auditor-General look at any environmental issues in the performance of Victorian public sector operations and activities having regard to the principles of environment protection as set out in sections 1B to 1L of the Environment Protection Act 1970.

The bill inserts new provisions with regard to consultation with the Public Accounts and Estimates Committee. For a long time this has been not so much a controversial issue but an issue of discussion between the Public Accounts and Estimates Committee and the Auditor-General. The provision to consult with the Public Accounts and Estimates Committee or a similar committee in any other Parliament is basically unique to Victoria.

No other audit act, as far as I am aware, has that requirement. But what I have learnt in my time on the Public Accounts and Estimates Committee is that many auditors-general do that, even though they are not required to. From my experience, certainly as a member of the audit subcommittee, there is some value in the Auditor-General consulting with the committee on the annual plan and on the audit specifications.

However, I think where the difference of opinion sometimes has arisen is on the definition or, I should say, interpretation of the word 'consult'. We must remember the Auditor-General is an independent officer of Parliament, and the most important thing is that independence. The Auditor-General and the Auditor-General's office should be able to conduct whatever audit they see fit to conduct. We know the Auditor-General's office does consult with the public and with stakeholders and widely consults on the types of audits, the annual plan, what audits would be conducted and what parts of the public sector should be audited. Here we are talking in terms of performance audit.

In some cases there is a view that the auditor must get the imprimatur or should not be able to proceed without having consulted with the committee on audits. I do not agree with that. I am hoping that the new provisions that are put into the act are basically that the auditor will be required to consult on audits which involve follow-the-dollar auditing of associated entities if the committee requests or if there is a substantial change to the annual plan. I am happy to see how they work, but in my view consult means consult — it does not mean get the opinion of and take that opinion into account. But still the Auditor-General is an independent officer, and that consulting is the dictionary definition of that word.

One of the other issues that has been raised by the Auditor-General in the office's submissions as to how the Audit Act 1994 should be amended is with regard to the financial auditing of associated entities. The bill allows for the performance auditing of associated entities; so those private sector bodies, non-government organisations or contractors who are carrying out work on behalf of the government and using taxpayers money to do so, under this bill, could be subject to performance audit but not necessarily to a financial audit.

We have questioned the government as to why this was omitted from the bill, and the government has come back to us pretty well saying that it did not think it was appropriate. However, I differ with that opinion, and so does the Auditor-General. Large sums of public money are involved in many of the increasing numbers of works being done through public-private partnerships that include, for example, schools, prisons — around 30 per cent of our prisoners are housed in private prisons — roads and all sorts of things.

Just today there have been reports in the paper about the arguments for a federal independent corruption commission, about sums of money perhaps disappearing. While we are introducing the ability to do performance audits, I think we should also be introducing the ability to do financial audits as far as the finances involve public money — not further, but as far as that involves public money. I have also included an amendment to that effect in the proposed amendments I circulated previously.

Another issue that has been raised, and it goes as far back as the review of the Audit Act by the previous Public Accounts and Estimates Committee in 2010 — and this has also been raised by the Auditor-General — is the lack in this bill of a provision allowing access to the premises of the associated entity to access documents or to interview people who may be involved in the carrying out of activities or work on behalf the government using taxpayers money. I have also included an amendment to that effect in the amendments I have circulated. The Greens believe that the part of the bill that is amending the Audit Act to provide for the follow-the-dollar powers will make those follow-the-dollar powers more substantive and in fact even more practical by giving the Auditor-General the ability to have access to the premises of the associated entities under the bill.

The other amendments go to the Ombudsman Act 1973 and, in particular, amend the Ombudsman Act so that a complaint no longer needs to be made in writing. This is a reform that the Ombudsman has advocated for in her annual report, stating that in 2014 alone more than 80 per cent of the contact to her office was made by telephone and that the office needs to be accessible and responsive; therefore complaints should not have to be in writing. We welcome that change.

There are also some clauses to update gender-specific language to gender-neutral language and to clarify issues around jurisdiction and issues around complaints.

Clause 61 provides clarity on when the Ombudsman may refuse to investigate certain protected disclosure complaints and amends section 15E of the act to provide that the Ombudsman may refuse to conduct an investigation into a protected disclosure complaint if the Ombudsman considers that the conduct which is the subject of the protected disclosure complaint does not amount to improper conduct or detrimental action against a person. The government says the amendments concerning the protected disclosures will provide the Ombudsman with greater operational flexibility and free the office to fulfil other core functions. However, we note that the current Ombudsman and the previous Ombudsman have commented that they struggle to deal with a number of protected disclosure complaints. This may go some way to ameliorating that problem, but I suppose it remains to be seen. Perhaps that is an ongoing issue that needs to be monitored both by the government and by the Ombudsman's office.

I note also in terms of the Audit Act that the government has released a discussion paper asking for public submissions with regard to the Audit Act. As I mentioned, the document on the need for legislative reform of the Audit Act on the VAGO website talks about some of the issues that have been covered by this bill that will assist the Auditor-General, particularly the follow-the-dollar powers, which it says have been partially addressed but do not allow for financial audits or access to premises. The environment, which it calls 'the fourth “e”', has not yet been addressed, and that should be added to the objectives of the act. We have an amendment to do that because we fully agree with that. In this day and age the issues when you are looking at a performance audit of a government body, government department or statutory body and their activities — some of which could have quite significant impacts on the environment — should be covered by the Audit Act, and they are not. They are covered by audit acts around the country. Our amendment is based on the Tasmanian provision.

There are several other issues relating to practical things like tabling reports electronically and other things, such as the audit of the adequacy of financial controls. That is another issue that the Auditor-General has raised. On the issue again of the consultation with PAEC, the Auditor-General is saying that the bill generates some efficiencies in consultation with PAEC. However, significant delays may still be possible, and it is unique in Australia to legislate in such detail, which this bill still does — although I believe it does make it more flexible — and there is some onus on the committee to respond in a timely manner, within 15 days.

The Greens will support the bill, but as I have outlined, we think more can be done in terms of changes to the IBAC legislation. I understand that the government will consider and is considering more amendments to the IBAC legislation and in fact the Independent Broad-based Anti-corruption Commission Committee has conducted its own inquiry, released its own report and travelled interstate to look at other commissions, in particular the Crime and Misconduct Commission in Queensland. In its report it outlined recommendations for amendments to the IBAC act, some of which are included in this legislation, and also outlined further work that needs to be done that it as a committee intends to pursue. It certainly makes that clear in its report.

The Greens will not be supporting the reasoned amendment that has been put forward by the opposition. Normally the Greens are very keen on legislation being referred to committees, but in terms of this legislation which covers three acts of Parliament and two independent officers of Parliament under those acts — the Auditor-General and the Ombudsman — and in terms of the IBAC, all of them are already covered by or overseen by committees of the Parliament. So it seems unnecessary to refer this bill to a different committee of the Parliament, particularly with regard to the specific issue that is raised in the coalition's reasoned amendment put forward by Mr Rich-Phillips. It refers basically to problems that have been identified with the conduct of the ICAC in New South Wales.

If there are problems with the operation of the ICAC which may affect the IBAC, I would consider that the best committee to take that into account would be the IBAC Committee. I am sure the IBAC Committee is taking notice of what happens in ICAC and what happens in the Crime and Misconduct Commission or in any of the others that exist in Australian states. It also seems unnecessary to be referring this bill to that committee to look at that particular issue because the relevance of that particular issue to this bill is not apparent, so we will not be supporting that reasoned amendment.

In terms of the other amendments circulated by Mr Rich-Phillips, the Greens will not be supporting the amendments with regard to the PAEC consultation because that would take us back to where we were before, and we would not be supporting that. Notwithstanding that, I think this is an ongoing issue that needs to be considered, and it is one of the subjects that the government has flagged in its discussion paper. I think more discussion on that is warranted, including whether or not it can be completely removed from the Audit Act, because it does not exist in any other act. There is certainly the opinion that the Auditor-General can operate and still consult with the committee without actually having that requirement in there. As I said, it is unique to Victoria.

With regard to the other amendment as to the definition of misconduct, I will listen to the argument about that particular amendment and reserve the position of the Greens on that amendment.

The Greens are supporting the bill. We are very pleased to see the lowering of the threshold at IBAC but we believe the threshold could be dispensed with completely because other sections of the IBAC act provide for IBAC to concern itself primarily with serious corrupt conduct and systemic conduct, and that should be enough to guide the IBAC in its work. Having to jump over thresholds, deciding before you have actually investigated, trying to decide whether something is corrupt conduct now, is something we do not necessarily believe should be in the act. It is not in the ICAC act on which this legislation is meant to be based. With those comments, the Greens will support the legislation.

Previous DocumentMsNext Document PENNICUIK (Southern Metropolitan) — The Greens will not be supporting the motion moved by Mr Rich-Phillips that the bill be referred to the Standing Committee on Legal and Social Issues for inquiry, in particular limiting its consideration to the reports of the New South Wales Office of the Inspector of the Independent Commission Against Corruption (ICAC) and the desirability of safeguards and oversight of IBAC in light of that New South Wales experience.

We do have the Victorian Inspector in place, which has the oversight responsibility, but as I mentioned in my contribution when this was raised by Mr Rich-Phillips during the second-reading debate, we already have three committees which look over the three areas of legislation covered in this bill, which are the IBAC legislation, the Audit Act 1994 and the Ombudsman Act 1973. This particular reference refers only to the part of the bill that refers to the Independent Broad-based Anti-corruption Commission Act 2011. As the Leader of the Government has said, the IBAC Committee has already looked extensively into this legislation. The committee has made recommendations as to what issues the legislation should cover and has foreshadowed the extra work that needs to be done in areas where it believes the bill does not go as far as it should in relation to some of the provisions that were asked for by the stakeholders because of what they heard during the inquiry.

I mentioned that during the inquiry the committee travelled to Queensland to visit the Queensland Crime and Corruption Commission, and I understand committee members may be going to New South Wales to meet with the staff of the ICAC et cetera. Notwithstanding that there have been important issues raised by the New South Wales Office of the Inspector of the Independent Commission Against Corruption, I believe that the IBAC Committee in its duties and in its ongoing inquiries into whether the IBAC legislation needs further amendment, which we would suggest it does, has already said it will be looking at those issues. I would be very surprised if in the course of those inquiries it did not look at what is happening in terms of reports of the New South Wales Office of the Inspector of the Independent Commission Against Corruption.

I do not really see the need, therefore, to refer this bill to the legal and social issues legislation committee, notwithstanding that the Greens would normally like to see bills referred to committees. Certainly we are usually in favour of that, but in this particular case we think that it is the wrong committee and that the IBAC Committee can perform the function outlined in the amendment moved by Mr Rich-Phillips.

To read more of the debate click here.

In committee on 5 May 2016:

Ms PENNICUIK (Southern Metropolitan) — I move:

1.     Clause 3, page 4, after line 29 insert —

'(f)   in the definition of relevant offence, for paragraph (a) substitute—

“(a)  a criminal offence against any Act or any other law relevant to the conduct in question; or

(aa)  a disciplinary offence; or”;'.

2.     Clause 3, page 5, after line 8 insert—

'(2)  After section 3(4) of the Independent Broad-based Anti-corruption Commission Act 2011 insert—

'(5)  For the purposes of the definition of relevant offence in subsection (1)—

disciplinary offence includes any misconduct, irregularity, neglect of duty, breach of discipline or other matter that constitutes or may constitute grounds for disciplinary action under any law.”.'.

I did canvass the reasons for this in the second-reading debate, so I will not spend an awfully long time doing that again. Certainly it is fair to say that the thresholds that apply to the investigations and the extent to which IBAC can begin an investigation and proceed to a full investigation after a preliminary investigation have been a subject of much discussion both within the Parliament and in the community amongst people who are paying a lot of attention to this, such as the Accountability Round Table, the Law Institute of Victoria et cetera.

IBAC is often compared with the New South Wales Independent Commission Against Corruption (ICAC), on which we were told this legislation would be closely based and which does not have — we were back in 2011, if Mr Jennings remembers — the levels of thresholds that are in the IBAC act currently. Even though that level of threshold is being changed by this bill — and the Greens support the change, because it certainly makes it less of a hurdle to follow in terms of commencing a preliminary investigation — we still think that there is too much tied to the issue of relevant indictable offences. That is basically where we are going, and we have based the amendment largely on part of the ICAC legislation.

 To read more of this debate, click here.

Ms PENNICUIK (Southern Metropolitan) — I have been listening very closely to the conversation that has been going on. With regard to Mr Rich-Phillips's amendment 1, we have given that some serious consideration. Given that we certainly welcome misconduct in public office going into the act, I suppose the point is whether or not it needs a statutory definition.

I return to the comments that I made earlier that the Greens are more of the view that things should be perhaps more broad than less broad in terms of what IBAC can look at and that the thresholds, constraints et cetera on what IBAC can look at should be less rather than more. We go even so far as to say that we thought the expression 'misconduct in public office' would have fitted very well with our further amendments to the definition that were not passed as a result of the division earlier.

Having said that, we have come to the view that we will not support this amendment. I suggest maybe different wording may have been appropriate.

Certainly it is quite a long definition and includes quite a number of extra considerations for IBAC that we do not necessarily think need to be spelt out in the legislation. They certainly may be things that the IBAC Commissioner may take into consideration in terms of deciding whether or not the misconduct in public office has occurred, but we are not convinced that this particular definition should be inserted into the legislation.

To read more click here.

Ms PENNICUIK (Southern Metropolitan) — I move:

3.     Clause 22, page 21, line 31, after “body” insert “or the relevant Minister”.

4.     Clause 22, page 22, line 1, after “officer” insert “or relevant Minister”.

5.     Clause 22, page 22, line 8, after “officer” insert “or relevant Minister”.

6.     Clause 22, page 22, line 11, after “officer” insert “or a relevant Minister”.

7.     Clause 22, page 22, line 14, after “officer” insert “or a relevant Minister”.

These amendments are about ensuring that IBAC can require information from the minister when conducting preliminary inquiries, because as outlined by the Accountability Round Table, for example, in its submission on the legislation, the problem here is that it is not clear whether this section, the way it is currently worded, would entitle IBAC to request information from a minister, whether the relevant principal officer of a public body would allow IBAC to request information from the minister if it required that or whether, in fact, you would just read that as a department head or a head of a statutory authority. Perhaps the minister could answer the question that I am posing, really, with the amendments.

Mr JENNINGS (Special Minister of State) — I thank Ms Pennicuik for her desire to actually try to ensure that there are no inappropriate gaps in the access of IBAC to relevant information. It is interesting that in these amendments, in terms of adding to the public office-holders, in fact it is only ministers who are drawn attention to. There could have been provisions for other public office-holders to be included within the amendments, but Ms Pennicuik has sought not to include them. I will just acknowledge that. It could relate to other members of Parliament. Ms Pennicuik has chosen not to include them. That outcome was not the government's preferred pathway, but we are not saying that members of Parliament, including ministers, are immune from consideration of IBAC's matters.

In a conversation I had earlier today with Ms Pennicuik on this matter, I defended the government's current legislative framework through the following example: if evidence were to be brought before IBAC that came from either a section of the community, any media source or indeed a departmental source that would warrant IBAC's consideration of potential corrupt practices by a minister, in fact in the preliminary investigation stage I would suggest that there would be an evaluation of the evidence wherever it is sourced counterposed with information that would be compiled through public service departmental official channels in order to assess the veracity of the administrative actions or the perversion of the course of just outcomes that may be of concern for a minister and that may warrant this examination.

You would crosscheck the information that comes to you and then make a determination about whether a full investigation may be warranted and then use other provisions, which may include secure compilation of material, to justify this case.

Certainly all of those options are available to IBAC. They continue to be provided for within the legislation. Indeed what information that may have come from the minister or the minister's office in the first instance would not preclude an investigation being undertaken. It is for those cumulative reasons that the government is not supportive of these amendments at this time.

Ms PENNICUIK (Southern Metropolitan) — For example, on page 7 of its submission, the Accountability Round Table suggests that the proposed section 59D:

… probably does not entitle IBAC to require information from, for example, a minister. And a departmental head may not know what corrupt behaviour is occurring in the department in question.

The submission refers further down the page to one of the most recent serious investigations of corruption in Australia, which was the investigation by the New South Wales Independent Commission Against Corruption (ICAC) into the Obeid family's involvement in the grant of mining licences in the Bylong Valley. I do not have to go into all of that. It is all on the public record.

The apposite point is that ICAC was not able to obtain information about that from departmental heads. In fact the information was held by the minister probably away from the ministerial premises. So the Accountability Round Table raised that as an issue to show a gap in the legislation — that if it wished to obtain that information from the minister, it would not be able to do that under this bill. That is a gap that the Accountability Round Table is concerned about. I think we are concerned about it too — if we were ever to go down the unthinkable path of such a situation in Victoria.

Mr JENNINGS (Special Minister of State) — I can assure Ms Pennicuik that I had a fulsome conversation with the Accountability Round Table members in relation to this matter. In fact at one stage I thought that I had convinced them of the arguments that I have put to the member, and we pursued them at great length. In fact the example that you relied on, they relied on, and that case was not dependent upon material that came out of the minister's office. That case was well and truly aired in the public domain with great effect, without relying on that evidence from the minister. So in fact that was an example that I used to justify my position, as distinct from the Accountability Round Table justifying its.

Ms PENNICUIK (Southern Metropolitan) — I move:

8.     Clause 23, lines 6 to 12, omit this subclause and insert —

“(1)  Section 60(2) of the Independent Broad-based Anti-corruption Commission Act 2011 is repealed.”.

Clause 23 of the bill amends section 60(2) of the IBAC act to remove the threshold for the conduct of an inquiry such that IBAC must not conduct an investigation under subsection (1) unless IBAC suspects on reasonable grounds that the conduct constitutes corrupt conduct.

As I have mentioned already in this committee stage, it is our view that IBAC should not have to reach that threshold but should be able to proceed with an investigation without having reached that threshold, or it should not have to come to that conclusion before it can continue an investigation. It may be that as IBAC continues an investigation it finds the action does not constitute corrupt conduct and therefore, because it acts as a clearing house, it may refer the investigation off to another authority, such as the Ombudsman, the Auditor-General or another body, or else it may not proceed any further. But the arguments have certainly been put that the existence of the threshold is a practical impediment and can be a legal impediment to IBAC conducting an investigation such that without the threshold it may uncover corrupt conduct, but it may be prevented from doing so because of the threshold.

In saying that, the Greens support the lowering of the threshold. We support the removal of the existing threshold, which Mr Rich-Phillips was questioning the minister about before, because that bar was widely recognised as being way too high. But our preferred position is to have no threshold. I know there would be other ramifications to this amendment passing, but I think it would make IBAC more closely aligned to how ICAC is set up.

Mr JENNINGS (Special Minister of State) — This goes back to the very first conversation we had this evening in the committee about the appropriate balance in relation to these thresholds. The experience we have had with ICAC and the confidence we have in the emerging practice of IBAC's operations in Victoria mean that we think IBAC will be assisted by lowering the threshold both in terms of the evidentiary requirements for its suspicion that an offence may have occurred on a reasonable grounds standard as an objective threshold test and also in terms of the scope of the various aspects, including that of misconduct in public office, that would be made available by this piece of legislation. As a result, in terms of both the breadth of issues that are covered and the threshold of evidence that is required, we have confidence in that balance.

What we are concerned about is if we move further, then we may get a difficulty that has bedevilled ICAC in terms of it being seen to appropriately balance its activities, particularly when overlaid by the extraordinary coercive powers that are available to IBAC and ICAC. They must exercise those investigative powers, which are actually quite onerous, appropriately and judiciously with low-order issues that may warrant some examination but deal with ill-disciplined behaviour or poor professional standards applying within the public service.

The government believes on balance that this legislation strikes the appropriate standard for the breadth and the trigger of investigative requirements. We would be concerned if we monumentally shifted that scope to areas where we believe that ICAC has had difficulty keeping an appropriate equilibrium and balance in its activities, notwithstanding that it has done some good work. I am not actually disputing that, so all of us are putting caveats on what we say in relation to our enthusiasm for activity. But we are mindful of an imbalance of coercive powers in the actions of ICAC in terms of public confidence. We think we are moving on a surer footing in relation to the reforms that we are introducing for IBAC.

Ms PENNICUIK (Southern Metropolitan) — I thank the minister, and I hear what he is saying. I earlier referred to the definition of corrupt conduct, which we tried to amend, so the two sort of go together. We are still of the view that that definition has not been broadened enough. While you have a definition which is tied to indictable offences — some common-law offences and misconduct in public office — and also a threshold, in our view and in the view of many others in the community that have been following this debate over many years, that is still too constraining. Yes, it is a discussion about the level of constraint, the balance and what people's views are about that; I acknowledge that.

There is also the provision in the bill that requires IBAC to focus on serious and systemic corruption, so that focuses its attention. That is one part to hold in relation to the question I am going to ask, which is: could there not be a situation where IBAC is not able to establish on reasonable grounds quite yet that the conduct constitutes corrupt conduct as defined by the bill — and our attempt to broaden that definition did not pass — and that may lead to some investigations which probably should proceed not proceeding? That is the concern: that there is too much of a threshold to establish that without necessarily having the ability to conduct an investigation to in fact establish that.

Mr JENNINGS (Special Minister of State) — Obviously there is a theoretical potential for this to occur, but part of the focus of the government and part of the focus of our various integrity bodies has been in trying to find the appropriate jurisdictional overlap so we can have investigative pathways that do not have gaps in them but account for information sharing and investigation sharing across those bodies. In those situations referrals to those bodies are more likely to complete the field of concern rather than to leave gaps.

If those bodies themselves, members of the community or any stakeholders identify that they believe that there is a jurisdictional gap, that there are issues of major systemic corruption, or for that matter individual issues of corruption that have not been pursued appropriately, and that they are not considered by other law enforcement agencies, such as the police, and if in fact we establish a body of concern about what those examples that have not been pursued may be and they are drawn to the attention of the Parliament, the government and the agencies themselves, then we will reflect about whether you have got a real concern or not.

The government is not divorced from looking at this, but it is confident on the basis of the advice that it has obtained from those investigative bodies at the moment that there is appropriate scope and appropriate focus. They believe that there is greater harmonisation and ability to share information and investigations across those bodies at the moment — better than ever before. We have added to that armoury in this piece of legislation. We are encouraging them to be vigilant in these matters and to exercise their judgement so we have a higher degree of confidence. That has been supported by the parliamentary committee that looked at this matter earlier in the year. It seemed confident with the overlay of this legislation in this form. Certainly the Law Institute of Victoria has been supportive of these provisions, as indeed have the integrity bodies themselves.

Ms PENNICUIK (Southern Metropolitan) — I do not want to take too much time with this, but the nexus of this legislation is the definitions on which it is constituted and built around. I put to the minister the example that if there were no threshold and IBAC could investigate any matter referred to it or reported to it, but it was constrained to focusing on systemic and serious corruption, would the practice be that IBAC would then refer that to the Ombudsman, if it were not systemic or serious corruption but it was maladministration, as the minister was talking about before? Or if it were a problem in local government, would it refer that off to the local government inspectorate and deem it not worthy of further investigation and so cease investigating? Would that in fact be the outcome, with the proviso that is already there for the focus of IBAC without a threshold? IBAC, with its focus on systemic and serious corruption, would, by its very nature, not continue with an investigation if it came to the conclusion that it was not the focus it was meant to have under the act.

Mr JENNINGS (Special Minister of State) — Ultimately the government's interest is to try to make sure that if any member of our community has a concern about either corrupt practice, whether it be through maladministration, poor financial controls and probity considerations or a public sector that is actually disciplined and responsive to the community, wherever the concern may arise or at whatever level, we are wanting to make sure that there is a framework and agencies that have appropriate jurisdictional cover and scrutiny of those issues. By design that is what we are intending to institute through the existing institutional arrangements augmented by what the government has put in this legislation.

We already have the ability, if any member of our community believes that in fact a matter that would warrant further examination has not been pursued to a situation that the evidence or the concern would warrant, for people to have an opportunity to draw that to the attention of the Inspector, for instance, who would actually then make an evaluation about whether there has been appropriate scrutiny and a process of examination that would be in accord with the significance of these issues.

The government accepts that we want to have the field covered. We do not want a situation where members of our community believe that there are jurisdictional gaps or no-one is taking their concerns seriously. We are designing a system to try to achieve that outcome. From the very first day of my responsibility in this portfolio I have made it very clear to the people who support me and the agencies that I interact with that that is what I am seeking to achieve. In terms of where we are at at the moment, I have a high degree of confidence that we will be able to achieve that, but I am not blind to the potential that we may fall short of that, and I will seek to achieve ongoing advice on those matters.

Mr RICH-PHILLIPS (South Eastern Metropolitan) — I just want to explore with the minister his current proposal, as opposed to Ms Pennicuik's proposal to remove this threshold test completely, to get a sense of the substance of the change that the minister is seeking to achieve in changing the threshold from 'is reasonably satisfied' to 'suspects on reasonable grounds' and to get a sense of the magnitude of change and the practical impact of shifting from that first criterion to the minister's proposed criterion. How significant is that lowering of the threshold in a practical sense? Can the minister give us some sense of that and some context for that line?

To read more click here.

Ms PENNICUIK (Southern Metropolitan) — I move:

8.     Clause 23, lines 6 to 12, omit this subclause and insert —

“(1)  Section 60(2) of the Independent Broad-based Anti-corruption Commission Act 2011 is repealed.”.

Clause 23 of the bill amends section 60(2) of the IBAC act to remove the threshold for the conduct of an inquiry such that IBAC must not conduct an investigation under subsection (1) unless IBAC suspects on reasonable grounds that the conduct constitutes corrupt conduct.

As I have mentioned already in this committee stage, it is our view that IBAC should not have to reach that threshold but should be able to proceed with an investigation without having reached that threshold, or it should not have to come to that conclusion before it can continue an investigation. It may be that as IBAC continues an investigation it finds the action does not constitute corrupt conduct and therefore, because it acts as a clearing house, it may refer the investigation off to another authority, such as the Ombudsman, the Auditor-General or another body, or else it may not proceed any further. But the arguments have certainly been put that the existence of the threshold is a practical impediment and can be a legal impediment to IBAC conducting an investigation such that without the threshold it may uncover corrupt conduct, but it may be prevented from doing so because of the threshold.

In saying that, the Greens support the lowering of the threshold. We support the removal of the existing threshold, which Mr Rich-Phillips was questioning the minister about before, because that bar was widely recognised as being way too high. But our preferred position is to have no threshold. I know there would be other ramifications to this amendment passing, but I think it would make IBAC more closely aligned to how ICAC is set up.

To read more, click here.

Ms PENNICUIK (Southern Metropolitan) — I move:

9.     Clause 92, line 22, omit 'sector;”.' and insert —

'sector;

(iv)  there are any environmental issues in the performance of Victorian public sector operations and activities having regard to the principles of environment protection as set out in sections 1B to 1L of the Environment Protection Act 1970;”.'.

The amendment adds that in the conduct of a performance audit by the Auditor-General the Auditor-General could look at environmental performance. I am very keen to pursue this amendment, not only for obvious reasons. It is one that the Auditor-General has been asking for for a long time. It is something that exists in various other audit acts in other jurisdictions both within Australia and in similar jurisdictions to ours.

I think also it is very important in respect of this bill that implements the follow-the-dollar powers for the Auditor-General to follow public money with regard to performance audits, in this case, where public funds are being expended by private entities or non-government organisations on behalf of the public, that environmental performance is a focus of those performance audits and that that focus, while it may occur already, should be a legislative focus as it is in other jurisdictions. Given that some of those public-private partnerships or private contractors that are acting on behalf of the government may be involved in activities that have significant environmental effects, this should be a focus of the act, particularly as we are now having the new follow-the-dollar powers inserted by the bill.

To read more, click here.

Ms PENNICUIK (Southern Metropolitan) — I move:

10.      Clause 92, line 26, after “when” insert “auditing an authority's financial statements under section 8(1) or”.

This amendment adds the words 'auditing an authority's financial statements under section 8(1)'. Amendment 11, which is tested by amendment 10, further elaborates on the purpose of the amendment, which is to allow the Auditor-General, with follow-the-dollar powers, to conduct financial as well as performance audits.

I have certainly had some conversation with the government about this issue. It is one of the issues that has been requested for a long time by the Auditor-General's office. Priority 1 in its top 10 priority reforms states:

The Auditor-General cannot fully audit the use of public money provided by government to organisations delivering government services on commercial terms. We are seeking the power to audit any matter relating to public money, with the associated necessary access powers.

In its commentary as to whether this is addressed in the bill, the Auditor-General's office says it is partially addressed by the performance audit provisions as the bill provides for performance audits of associated entities but not financial audits. The Auditor-General goes on to state that the office does not wants to do financial audits of associated entities but it needs the ability to follow the dollar if a government entity, for example, contracts parts of its financial services — for example, payroll — so it can complete the financial audit of the entry.

I think this is a gap. The government has responded to me in writing; we asked its advisers this question and we got a written response. The minister has reiterated that response, which is that basically the government does not want the Auditor-General to be the financial auditor of the private sector.

But I do not think the way I have put the amendment would not be that; it would just be with regard to public money that is being held or being used by an associated entity as it is defined under the act so that the public can be assured not only that the performance of that associated entity is effective, efficient and economic — but so far not environmental — but also that the funds that have been transferred or allocated have actually been expended as they were meant to be expended. I think that is an important power that the Auditor-General should have — restricted to the public money, not a full audit of that associated entity but the money that they are using on behalf of the public, taxpayers money.

Ms PENNICUIK (Southern Metropolitan) — I move:

12.   Insert the following New Clause to follow clause 96 —

'C.   New section 10A inserted— Access to accounts, information, money and property

After section 12 of the Audit Act 1994 insert —

“12A          Access to accounts, information, money and property

(1)   In this section—

authorised person means a person who has written authority to exercise powers under this section;

premises means any land or place;

written authority means a written notice signed by the Auditor-General.

(2)   For the purposes of an audit the Auditor-General or an authorised person, is entitled to full and free access at all reasonable times to—

(a)    all accounts, information, documents, systems and records that the Auditor-General considers to be relevant to the audit; or

(b)   public money, other money or statutory authority money; or

(c)    public property or other property—

that is or are in the possession of any person and the Auditor-General, or any authorised person, may make copies of or take extracts from any of the accounts, information, documents and records.

(3)   For the purposes of subsection (2), the Auditor-General may cause a search to be made in, and extracts to be taken from, anything in the custody of the Treasurer or in any office of an authority, without paying any fee for doing so.

(4)   Subject to subsection (6), the Auditor-General or an authorised person may, at all reasonable times, enter and remain on any premises in order to exercise powers under this section.

(5)   If an authorised person, enters, or proposes to enter, premises under this section, the occupier must provide the authorised person with all reasonable facilities for the effective exercise of powers under this section.

Penalty: 50 penalty units, in the case of a natural person;

             250 penalty units, in the case of a body corporate.

(6)   An authorised person is not entitled to enter or remain on premises if the authorised person fails to produce a written authority on being asked by the occupier to produce proof that the entry is authorised.

(7)   This section extends and applies to an associated entity and to persons employed by the associated entity.”.'.

This amendment is to insert a new clause into the bill to follow clause 96 that would be to insert a new section 10A into the Audit Act 1994. This is about access to accounts, information, money and property — without reading the very long wording of the amendment — such that the Auditor-General, when auditing an associated entity, would be able to have access to the premises of that entity for the purposes of the audit. That would include to look at accounts, documents, information systems and records, public money, other money or statutory authority money, or public property or other property.

This is one of the other priorities of VAGO with regard to the follow-the-dollar powers that this bill is instituting into the Audit Act. The Auditor-General's office says access to premises is not included in the bill, but it should have been included. VAGO can use its existing powers to call for people and documents, but some things must be seen on site — for example, some systems need to be seen in place. In order to audit a building permit, they may need to access the premises to see if the work is compliant.

Also I would suggest that if it is a school or a prison or any other facility being constructed on behalf of the public using public money, then the auditor should be able to access that and should be able to access the property of the associated entity, as mentioned there, to look at systems, permits et cetera that may be held at that property in terms of the office of the Auditor-General conducting a performance audit to see whether the conduct is effective, efficient and economical, if not environmental.

I think it is an important power that, like environmental, should be going in concert with the introduction of the follow-the-dollar powers, and it sort of makes the follow-the-dollar powers not quite complete without having the ability to access the premises of the associated entity for the purposes of following the dollar.

To read the rest of Ms Pennicuik's amendments and the debate, click here.