Bill: Financial Management Legislation Amendment Bill 2025

BILL:

FINANCIAL MANAGEMENT LEGISLATION AMENDMENT BILL 2025.

Tuesday, 17 June 2025.

James NEWBURY (Brighton) (16:49):

I rise to speak on the Financial Management Legislation Amendment Bill 2025.

At its core what this Bill should be about is enhancing financial integrity in Victoria, because that is what this State desperately needs. We need to see the rules around financial integrity enhanced. Sadly, this Bill is a lost opportunity to enhance that integrity. In fact, what has been exposed is a Bill that sneakily undermines truthfulness in financial reporting and sidesteps proper accountability when it comes to financial integrity in this state, and what a shame.

For background, the issue around financial integrity and enhancing financial integrity rules has been a chequered one over recent years, not only in this Parliament but in two Parliaments prior. Two Parliaments prior, a Bill was introduced into this place which had some mechanisms contained within it that would, in theory, increase financial integrity measures. At that time there was not an agreement by this Parliament to proceed with that Bill, and so the Bill did not move through the Chambers, because I think there was a recognition even at that time that what the Government was trying to do then was obfuscate truthfulness in Budget reporting. We saw in that  particular Bill a number of the contentious measures, not all of the contentious measures but some of the contentious measures, that are contained in the Bill.

I might take a moment to talk about the comparison between the Bill then and the Bill now in terms of the measures contained therein. One of the most contentious,
which is in both Bills – the draft Bill then and the Bill now – is the removal of warrants. In shorthand, a process exists, which the Government now try to publicly mock because they are trying to justify the reason for removing this important accountability mechanism, whereby the Governor effectively signs off on Government spending. What the Government will say is: when these mechanisms were put in place, money was physical, and so therefore there was a need to account for expenditure. Well, as we now know, has there ever been a time in history where the amount a Government spends needs to be accounted for more than is the case now? We heard the Member for Rowville speak earlier today about the amount of debt that was chalked up over the 158 years of this place until 2014 being minuscule by comparison to the debt that has been chalked up under this Government.

The warrant mechanism is a mechanism that allows the Governor a signing right, effectively, for the money that the Government is spending, the appropriation of
this Government. That the government wants to remove that should not, frankly, surprise anybody. I think that the Government would of course want to remove that oversight. But that was a common provision, and I suspect it was a contentious issue in 2017 when the forebear of this particular Bill was introduced and one of the reasons why the Parliament said it was a bridge too far. We know that it is a core part of the current Bill and one that we completely and wholeheartedly oppose.

Why should we have the Governor sign off on Bills that go through both Chambers of this place? You could make the same argument. It would be a false argument, but you could. Only a Government that spends too much money and does not want people to know about it could possibly argue that that requirement of oversight is unnecessary. Only a Government that does not see an accountability need to watch their own spending, because they have forgotten that the money they spend is first earned by a taxpayer, could argue for the removal of that process. We will hear Government speaker after Government speaker say, ‘Well, times have changed, money’s not physical. Things have changed, and so therefore we don’t need that accountability measure anymore.’ Has there ever been a time in history where that has been needed more? I can assure you there has not. So, we wholeheartedly oppose the Government’s proposal to remove that accountability measure.

The original Bill in 2017 did have clearer Ministerial directions in relation to compliance obligations, and as a measure in the current Bill we understand that. We understand that there are some measures within the Bill that effectively move it from Ministerial guidance to legislative requirements in relation to financial management, and that makes sense. It is important to put on record that those changes which were contained in the original Bill of 2017 do make sense, as do certain financial management obligations in relation to public bodies and departments that were also included in that Bill. Those measures were really the core part of the original Bill.

Post that Bill failing, the Department conducted a review into financial management obligations as they exist through this act, And what we found out through the process of this particular Bill is that that review has never been completed, so we have a Bill that is before this Chamber based on a review that has not been completed. The Department, after failing on their first Bill two terms ago, conducted a review, and the review has never been completed. The review was an internal review that only consulted other Departments – of course it did. I mean, why would you talk to anybody in the financial markets? Because they would tell you what they really think. There was, as the Government said, no consultation outside the Departments. The Government admitted that. They admitted that when it came to rules around financial obligation there was no external consultation as part of that review. That is what the Department said in the Bill briefing. We can only take them at their word. But the review that was undertaken, the Department also confirmed, was not completed. So, what is this Bill? This Bill is based on a review that has not been completed and a review that has not seen the light of day. I am not aware that, other than the officers that dealt with the draft review, anybody else has seen it. So that is the guts of what has supposedly led to this new updated Bill.

What is new in this Bill? There are some notable key differences, and some of them are meritorious. I do note a new, effective budget overrun process. Currently, where a budget overrun is likely, there is no official process other than guidance that notification needs to be made in relation to that overrun. It makes sense to legislate that, so I do put on record our view that that additional measure, which was not included in the original Bill, is noteworthy.

You can argue that the warrant removal was, at the time of the original Bill, the worst thing in the Bill. Well, I think now there is a new measure that pips it. This new Bill seeks to remove quarterly reporting in the final quarter after an election. The Department says, ‘It’s all too hard after a pre-election update to then complete an update post the election before the end of the year.’ It is all too hard. At face value you might say, yes, a Department would say it is hard because it is extra work, though the Department is in caretaker and so they have nothing else to do. They are literally in caretaker. I see the Department staff laughing, but they are in caretaker and so there is less work. By its own definition, there is less work. So initially you might take it at face value that they think it is all too hard, but we are talking about the disclosure of taxpayer money. This is the problem with this government. They misunderstand that there is a requirement and an obligation to account for the way they spend other people’s money. It is not their money, it is other people’s money. In an election year what this Bill proposes to do is remove the requirement for that report. It removes it entirely, so there will be less financial reporting in an election year, full stop. There will be less under this Government.

How you can put a Bill forward to this place saying you are going to improve financial management but report less is deeply, deeply concerning. Frankly it is sneaky. How can you propose to remove requirements to report under a Bill that by its definition should be seeking to enhance the way finances are reported? It cuts against the very grain of what this Bill proposes to do. It should concern every Victorian that the two core measures of this Bill – and I did note there are other measures that are meritorious – reduce the requirement for financial reporting in a major way, because if you are removing the requirement for a quarterly report then by its own very definition you are removing the current requirement that exists in a Bill that shamelessly proposes, in name only, to enhance financial management in this State. Only this Labor Government could do it.

What this Bill should be called is the ‘scrapping financial reporting requirements Bill’. That is what this Bill should be called, the ‘scrapping financial reporting requirements Bill’, because that truthfully would explain what this Bill is all about – reducing the number of financial reports. As I said earlier, when we went
through the briefing process the Department spoke about it being difficult to produce these reports because of the tight turnaround. What the Department also said is it is difficult for an incoming government, because if there is a change in Government the new Treasurer will have a short timeline after an election to approve a report. So, the first thing I said was, ‘Well, there have been three occasions where that has occurred.’ The Department only had record of one. I spoke to the Treasurer at the time, who dealt with it a second time. The Department only had a record of one of the three, but anyway I was able to find record of the other, and on both occasions, it was accepted that there was no issue. So, the Department acknowledged in the one instance they were aware of that the Treasurer dealt with the issue without any problem. I spoke to the Treasurer at the time, the Member for Rowville, who said he also had no problem managing that timeline and the reporting process. So, what is the problem that they are trying to solve with this scrapping of a financial reporting requirement? What is the problem that the Government is trying to resolve?

We had a conversation in the Bill briefing about policy and politics, and this change is actually more about politics than it is about policy. If the Department had said simply, ‘It’s hard doing work when we’re in caretaker period,’ I am sure that any Government would say, ‘Well, come on, you’ve been doing it for how many decades? In the three instances that we are aware of there’s never been an issue, so just deal with it.’ But what we do know is that the Government want to reduce their requirement for financial reporting, and that is what, at its core, this Amendment is about. The Bill should be called the ‘scrapping financial reporting requirements Bill’ because that is truthfully what it is, and the second Amendment removes the Governor’s oversight of appropriations.

You have a Bill that does a number of – I will not say minor things, but certainly in terms of financial management they improve financial obligations, and we concede that. We concede that when it comes to reporting of overruns and Treasury’s legislated right to ensure that changes in Departments are made with Treasury’s awareness, they are fair and reasonable. Also, there are certain declarations in relation to very, very small entities – for example, cemetery trusts. Where those changes occur with those entities, they can be exempt from a traditional form of financial reporting, and that makes sense. In a very small number of circumstances where entities have effectively no budget, these obligations – more broadly on notification processes and also exemptions – and these changes make sense. But what does not make sense is what is actually at the core of this Bill. At the core of this Bill are two very big, sneaky things that the Government is trying to hide under a Bill that is supposedly about enhancing financial management.

The Coalition will not support these changes, which are trying to hide how the Labor Government spends taxpayers’ money. Only a Labor Government could come into this chamber under the guise of improving financial management and hide the way that Victorian taxpayer’s money is spent, and that is the truth of this Bill. This Bill is a very, very sneaky Bill, and it was called out today in the media for what it is – a very, very sneaky Bill. You can see that a number of people, including experts, have made it very clear that there should be the reporting regime that exists now into the future, which is our position too.

The economist Saul Eslake spoke about the crucial need for the quarterly report that the government is proposing to scrap to remain because of the crucial differences between a pre-election Budget update and a quarterly update thereafter. There are going to be differences, and just removing the requirement is simply wrong in principle, and it also undermines the financial reporting regime that exists.

There were some additions, as I spoke to earlier, that were worthy and meritorious, but one does wonder why this Government, when looking at the previous bill and adding to what was originally put in 2017, decided, for purely political reasons, to remove a quarterly reporting requirement. Why would you do that? Why would any Treasurer, and especially this new Treasurer, think that is a good idea? You might not it understand fully, but you could see with the former Treasurer, who had been there for a decade and clearly was an expert in covering up his own mess, why he would personally want to reduce reporting requirements. Of course, he would want to reduce the reporting regime in the state. But for a new Treasurer to tick off this Bill to come into this place – I mean, what a shocking record.

Katie Hall: On a point of order, Acting Speaker, on relevance, the Member for Brighton is speaking a lot about Treasury. I note that this is actually a finance Bill, and I am not quite sure why the Member for Evelyn is not leading this contribution from the Opposition. I wonder whether the Member for Brighton has pulled rank. But if he could get back to the finance aspect.

The ACTING SPEAKER (Paul Mercurio): That is not a point of order.

James NEWBURY: I did not even know that member was still in this chamber. I am speaking directly to the reporting regime that the Government in this Bill is trying to scrap. You can completely understand why this government are getting so anxious about that being exposed, because they were hoping this one would sneak through and that no-one would notice the reduction in the reporting requirements. That is why we have as a Coalition put forward such a strong plan in relation to enhancing financial reporting in this State, which we have spoken about over recent weeks – because we believe that the future of this State is about growing this State, and at the core of that is ensuring that the market and the broader economy have trust in what the Government is doing and what the Government is reporting. We have seen time and time again the credit rating agencies especially saying, ‘We don’t trust what the Government is saying.’ That is why they put this State on notice in terms of the credit rating. I mean, what a bad rating we have. But they put us on notice.

As my colleagues are rightly pointing out, we know the Treasurer has just been in New York begging to keep the current credit rating – begging on the taxpayer’s dollar, no less. It will be very interesting to see because I am not quite sure how those rating agency meetings will have gone with a Treasurer who has literally no plan to fix the problem that this Government has created. When you talk about the biggest project in this State’s history and the Budget line item is ‘TBC’, you must walk in and think that you are a joke. Well, you are as Treasurer. ‘How much is this going to cost?’ ‘TBC. Don’t know.’

When the Federal Government ask how much it is going to cost, they will not even tell them. So, the credit rating agencies of course are saying, ‘Hang on, your budget mechanisms aren’t transparent, and they don’t make sense.’ They have said that over and over again, not only putting our ratings on warning but also putting our infrastructure spends and the lack of proper oversight on our infrastructure spends on the record. They have said it. For rating agencies to be saying that over and over and over and over again, including after the Budget, should tell you everything you need to know. They have also spoken about this giant ticking debt bomb that this State now is sitting on because of this Government.

What the Coalition has identified is a crucial need to enhance truthfulness, honesty and transparency in the way the Budget is reported but also how spending decisions are made, what things will cost and when they will be delivered. To think that in the first 10 years of this Government, between what they promised to spend and what they did spend, there was a $129 billion blowout – $129 billion between what the Budget said and the budget actual. How can you make a mistake like that unless you are being deliberately deceptive? The average was $14 billion a year between what was promised and what was spent, so is there any wonder that there have been calls for truthfulness, honesty and enhanced financial reporting. And what have we seen instead – we have seen a Bill come into this chamber which does, as I acknowledged, make a number of minor, I would say, technical changes in relation to notifications and reporting which, if they were in a Bill in and of themselves, I would suggest we would be supportive of. But what this Bill does is try to cover two really, really sneaky changes with these other amendments. We know when it comes to the Governor’s effective signing off, for want of a better phrase, of the Government’s appropriations – scrapped if this Bill is passed. The Governor’s oversight of spend – gone. Why would this Government want anybody to watch what they spend? But also, then there is the reporting of what is being spent through a quarterly reporting process.

It does not matter what those on the other side say to try and explain how times have changed, there is not a need, Departments are busy and all that rubbish. It is all rubbish. The truth is, because of those two measures at the core of this Bill, our financial management obligations in this State are being reduced. The truth is that is what this Bill is about – scrapping those. We cannot support those, and I think that it should be seen for what it is. It will be seen for what it is. It is deeply concerning to think that we have a new Treasurer who has ticked off on this Bill and is trying to sneakily hide what this Government is spending and reduce the amount of oversight of that spending. This is not the Government’s money, it is taxpayers money, and this Labor Party has well and truly forgotten that.