COMMITTEES

Mr BURNS (Macnamara) (10:09): On behalf of the Joint Committee of Public Accounts and Audit, I present the committee's Report 518: inquiry into the 2023-24 and 2024-25 major projects reports. Report made a parliamentary paper in accordance with standing order 39(e). Mr BURNS: by leave—Today will be the final time that the committee does table a report into the Defence Major projects report, but it will not be the end of the parliamentary Joint Committee of Public Accounts and Audit's scrutiny of Defence expenditures.

A government member: Hear, hear! Mr BURNS: Thank you, Former Chair. The Major projects report has served as a landmark of Defence accountability for eighteen years.

What commenced as a response to poor visibility on the progress of major projects evolved over the years into a very technical document that has provided the data necessary for parliamentary scrutiny. It has also provided for broader national discussions on Defence acquisitions, which remain some of the most expensive and complex projects undertaken by the public sector.

Conducted at the request of the committee, the MPR has reviewed 63 major projects and contributed to improvements in the performance of the Department of Defence in areas as diverse as risk management, project governance, financial reporting, records management, and lessons. This report, the outcome of the committee's inquiry into the 2023-24 and 2024-25 major projects reports, finds that although there have been improvements in Defence performance, Defence projects continue to experience scope, budget and schedule difficulties, when compared to the original second-pass approval.

A particular focus of the committee in this report has been Defence's use of 'minimum viable capability' (MVC). The broad concept of MVC is one where Defence seeks to minimise the cost to taxpayers—which is obviously reasonable—while being able to acquire and integrate new technology and assets into the Australian Defence Force (ADF). However, it has caused a difficulty, or a challenge, as compared to the original purpose of the MPR, which did highlight specific milestones and points in which the committee was able to assess the acquisition of projects in accordance with Defence requirements.

Given the importance of parliamentary oversight and accountability, the committee has made the recommendation to clearly specify the details contained within the MVC, especially as they relate to projects identified to the committee. Now, it is worth just taking a moment, for the benefit of the House, to understand how we got to this point and why we have chosen not to continue with the MPR.

The request, or the advice, of not proceeding with the MPR did not originate from the committee; it originated from the Auditor-General. The Auditor-General themselves suggested that the compilation of this very, very comprehensive document, over time, was not serving the parliament adequately and was not serving the parliament in a way that gave proper parliamentary oversight.

Therefore, there is a better way, which the Auditor-General suggested and which obviously focused on things like their own performance audits—which have the ability for the Auditor-General to provide recommendations, as opposed to just reporting what is in the MPR, which is a crucial difference—as well as the parliamentary Joint Committee of Public Accounts and Audit being able to specifically inquire into projects that it deems necessary, which we have done and we are doing, having already commenced two separate inquiries on two separate Defence acquisition projects.

I understand that the other place made a recommendation to continue with the MPR, but, actually, that recommendation doesn't heed the advice of the Auditor-General. I want to make clear that the public accounts and audit committee has had a proud history of overseeing our Defence acquisition. It is a responsibility of this committee to do so, but it will do so in a way which actually serves the parliament properly and doesn't just provide information for information's sake but is able to get to the bottom of acquisitions and inquiries that it sees as the most important ones or ones where there are the greatest issues.

That is a far more effective way of having parliamentary oversight in this matter. I invite anyone, in either this place or the other place, to watch our public hearings when we continue to scrutinise the defence department, and I think it will be clear to anyone that we take this responsibility extremely seriously, and we will continue to do so. In addition to the changes in reporting due to MVC, having noted that changing strategic circumstances were prompting Defence to classify increasing amounts of information in the MPR, the committee concluded scrutinising major Defence acquisitions through a single consolidated report was no longer fit for purpose.

We needed to evolve, and that's exactly what we've done. As a first step in this reformulation of Defence scrutiny, the committee's third recommendation is that Defence should provide information to the committee as requested, containing specific data on the projects the committee deems necessary. This will be specific information that assists the committee to audit and assess Defence's performance and governance of its major acquisition projects.

Further, the committee will increase its scrutiny of performance audits in the Defence portfolio, and we are already commencing that with our inquiry into the procurement of the infantry fighting vehicles Land 400 phase 3. We are also going to be consulting with the newly created Parliamentary Joint Committee on Defence to ensure that we can assist them in the best way possible with their scrutiny and their oversight of Defence in their own newly formed committee in a methodical, robust and comprehensive way.

I want to thank the Auditor-General and her team for the exceptionally diligent and detailed work that they have done over the years in scrutinising the MPR and producing the MPR and scrutinising Defence acquisition. They are exceptionally hardworking and focused and professional public servants, and the committee is in great debt to their work. We appreciate their advice and their collaboration and the constructive relationship that they have with the committee, and I think that we owe them a great thanks.

I also want to thank the secretariat for all of their hard work in preparing this, especially Dr Fiona Allen, who was the lead secretariat for this report, obviously working with Jenny Adams, who is an outstanding secretary of the committee. I'm very grateful for her ongoing counsel and all of her work in assisting me in steering the committee. But I also do want to thank the Department of Defence for assisting in the process of the MPR over the years.

I think it is a healthy thing where the department comes to the parliament and answers questions on Defence acquisition. I understand that there are genuine strategic concerns that the department has that they didn't have when the MPR initially was formed. However, having that relationship with the parliament is essential, and the public accounts and audit committee will continue its role in scrutinising Defence procurement.

Defence will continue to be scrutinised—it will evolve; it will be more focused—but it is not going to disappear. The same concerns that motivated the committee to act almost 20 years ago today are still relevant and, unfortunately, we face a more complex strategic environment and the stakes are even higher. Therefore, we must continue our work.

I thank the committee members, I thank the deputy chair and I commend the report to the House.