Attorney Generals Shunt
The AGE-Melbourne May 29, 2006
Last time Victoria's auditor-general had to be replaced, his role had become a hot election issue. It got to the point that Ches Baragwanath, whom Labor was claiming had been "hounded" from office by the Kennett government, objected to the unauthorised use of his photograph in ALP fund-raising material. Now Mr Baragwanath's successor, Wayne Cameron, is not seeking reappointment when his seven-year term expires in September, and Liberal leader Ted Baillieu is claiming the Auditor-General was "forced from office". The issue does not have quite the same potency as it once did. The Bracks Government honoured its promise to restore many of the powers that had been stripped from the Office of the Auditor-General. In naming Des Pearson as Victoria's 25th auditor-general on Friday, Premier Steve Bracks also noted that the appointment was made on the recommendation of the Parliament's Public Accounts and Estimates Committee, a process he had promised in 1999. The public service and auditing experience of Mr Pearson, the current Western Australian Auditor-General, suggests he is eminently well qualified to succeed Mr Cameron.
Mr Pearson will have his work cut out for him, and not just because of the inherent difficulties of being a public watchdog. The fact is the Bracks Government has not honoured other commitments it made in its Integrity in Public Life policy in September 1999. In particular, it is still more difficult than it should be for Victorians to assess whether they are getting good value from the use of public-private partnerships to deliver many big projects. These include toll roads, Southern Cross railway station, the County Court building, the Convention Centre and the Royal Women's and Royal Children's hospital redevelopments. Difficulties include the complexity of contracts and the use of commercial confidentiality to deny the public the sort of detail needed for a proper assessment. Labor promised to permit only a narrow definition of commercial-in-confidence - specifically relating to patents and trade secrets - that would prevent the public release of documents. Instead, the concern that dominated Mr Baragwanath's final report, that the Government was happy to use commercial confidentiality provisions to hinder scrutiny of deals to see whether the public was getting value for money, remains valid.
In the lead-up to the November 25 election, Mr Pearson will also be called on to scrutinise other sensitive issues such as government advertising (the Bracks Government's self-promotion is a further breach of its 1999 commitments), allegations that veteran Labor MP George Seitz's electoral office has been involved in a scheme to pay for branch stacking and the allocation of the Snowy Hydro sale proceeds. However, a deal that cries out for independent scrutiny is the Government's arrangement with Transurban to finance the Monash-CityLink-West Gate freeway upgrade. In terms similar to last year's smaller deal to fix the Calder-Tullamarine freeway interchange, the Government has given up $2.9 billion in concession payments due from Transurban for up to 28 years. In return, the toll-road operator will put $609 million into the freeway expansion over four years.
The sums appear to work out badly for the public. The Government, which could have borrowed at 6 per cent or less (or taken $150 million a year from budget surpluses over the next four years), is paying an effective interest rate of 9.7 per cent - a difference that costs taxpayers about $500 million. Transurban borrows at 6.8 per cent to finance its contribution, which then goes to the Government at 9.7 per cent, thus netting the company almost $18 million a year. It also nets the extra tollway profit resulting from freeway access improvements and increased capacity of 30 to 40 per cent. It is little wonder the market's valuation of Transurban jumped by $250 million.
Victorians should not have to rely on Mr Bracks' say-so that the deal is "the best value . you could get" and that peak travel times will be halved. Key details needed to assess such claims are not being released due to commercial confidence. Deals such as this remind Victorians why they need an independent and effective auditor-general.
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