The auditor-general has hit back at a gag order placed on him by the Treasurer in the lead up to May’s budget, saying he has received legal advice that he should have been able to tell a parliamentary committee about cuts to the office's budget.
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The Australian National Audit Office's budget was cut by $690,000 in 2018-19 and $920,000 a year across the next four years in the budget, but auditor-general Grant Hehir was prevented from notifying the Joint Committee of Public Accounts and Audit about the cut by Treasurer Scott Morrison. The committee's chairman, Liberal Senator Dean Smith, and deputy chairman, Labor MP Julian Hill, endorsed the office's budget in the parliament on budget day, but they weren't aware of the cut.
The auditor-general answers to Parliament through the committee and not to a minister, in order to protect the independence of the office.
In the weeks following the budget, Mr Hill told Parliament he felt "aggrieved that I was not informed of the true situation and may have inadvertently misled the house or, at the best, provided the basis for a misunderstanding".
"Unbeknownst to the committee or to me at that time, the government, as part of the budget process, had decided to further reduce the funding available to the ANAO. Thus, the committee did not consider or endorse the proposed budget for the auditor-general as set out in the appropriations bill now before the house," Mr Hill said on May 21.
Since then Mr Hehir has taken legal advice from the Australian Government Solicitor, saying he should have been able to disclose the true nature of his office's budget to the committee despite secrecy provisions around the budget.
"In effect, I have a statutory duty to respond to a request from the JCPAA [the joint committee] to disclose information about the ANAO’s pre-budget estimates, and am advised that section 53 [of the Auditor-General Act] is designed to ensure the information is available to the JCPAA despite its otherwise confidential status," Mr Hehir wrote in a submission to an independent review of the Public Governance, Performance and Accountability Act.
"I am advised that this leaves no real room for executive discretion based on conventions around pre-budget confidentiality."
Mr Hehir has also used the audit office's corporate plan to mount a defence of his office's independence.
"This independence is fundamental to the ability of the ANAO to provide evidence-based reports for Parliament to enable further enquiry, noting that the JCPAA reviews every audit report tabled by the auditor-general," the recently published corporate plan said.
"To maintain credibility in exercising the auditor-general’s powers and delivering the mandate, the ANAO should demonstrate the strongest integrity."
Mr Hill said he stood by the statement he made to parliament, and the committee "is absolutely turning its mind" to the issue with a view to resolving it by the end of this term of parliament.
"Any shred of ambiguity should be resolved," Mr Hill said.
The auditor-general declined to comment further on his submission to the independent review.
