THE DEFENCE BUREAUCRATS CANNOT ACCOUNT FOR

$4.4 BILLION OF TAXPAYERS’ MONEY

Defence Department finances are in tatters as billions of dollars remain unaccounted for, a problem so severe that the head of the taxpayer watchdog says the department may not be aware of everything it owns.  Federal Auditor-General, Ian McPhee, admits accountability is so sub-standard, he cannot detect $4.4 billion of Defence’s stated assets and almost $1 billion of its liabilities.  Mr. McPhee’s scathing assessment is the fourth consecutive year that its financial controls have been found wanting, regardless of its claims it has tried to fix them.

The Department, with the most of the Federal Government’s non-financial assets, spent more than $18.3 billion last financial year.  But it has such “significant weaknesses” in its internal controls that Mr. McPhee questions whether it knows what it owns.  About 25% of its liabilities, including leave owed to staff, were also in question, he said.  The “inadequacies” in financial management are so serious, they led Mr. McPhee to cast doubts on the Government’s entire finance statements, according to his report, which was published by stealth on the eve of the holiday season.  “There is still pervasive uncertainty in relation to the Defence financial statements taken as a whole” he said.  “This uncertainty affects the accuracy of the reported net result and net assets of the Australian Government.”

The department’s secretary, Ric Smith, and the recently retired acting Chief Finance Officer, Ken Moore, could not guarantee or even assure us that the financial statements were “a true and fair view” because of “doubts about account balances,” he said.  “Defence thought it would take 5 years to overcome the problem,” he said.  He questioned the accuracy of Defence’s reported $87.0 million deficit.  Of the 252 Federal bodies’ financial statements, the Auditor-General detected 18 breaches of the Constitution, mainly through using faulty agreements to give them the authority to keep revenue from independent sources.  Defence does not know what it holds in general stores  -  reported to be worth $1.29 billion  -  owing to its stocktaking and supply systems being still in a mess, his report shows.  While it does not say what could be missing, an audit officer, Warren Cochrane, told a Senate Estimates Committee in May 2005 that items which could not be tracked included clothing, trucks, ambulances, grenades and guns.

Another $5.42 billion value that Defence has placed on its infrastructure, plant and equipment is in question because $103 million of assets have not been revalued as they should, the report said.  And inadequacies in Defence’s staff leave records mean it is unable to validate that its leave provisions are $896 million as claimed, it said.  The Minister for Defence, Robert Hill, told the Senate this month:  “It has not been easy for the Defence Department to comply with accounting requirements that have been basically designed for the private sector, because it’s simply not a business for profit.”

A spokesman for the Minister for Finance, Nick Minchin  -  who approved the accounts  -  said that the Constitutional breaches were technical breaches.  This is the greatest load of crap we’ve ever heard.  If the Defence Department was a private sector business under Corporate Law and the Trade Practices Act, the Minister, Senator Robert Hill, and his Departmental Bureaucrats would be indicted as incompetent corporate criminals.  Senator Minchin, Minister for Finance, says the Department’s Constitution breaches were only technical.  Are you joking, Senator?  Do you think, because the majority of Australians voted your Government into power, that we are all brain-dead?  Senator Minchin, do you honestly want us to believe that the 18 Constitutional breaches detected by the Auditor-General, Mr. McPhee, were all technical breaches?

It has become evident to many Australians that the aforementioned Ministers and their Bureaucrats have become blatantly dishonest, a lesson they’ve learnt well from their leader John Howard.  The Prime Minister promised there would never, never, ever be a GST.  But there was.  He later defended his actions by saying his promise was not a “hard core promise.”

John Howard was the same man who came to the rescue of the National Textile Workers when the company became insolvent under the CEO Stan Howard, the Prime Minister’s brother, and yet when Ansett  collapsed, the Howard Government imposed a $10 levy for external plane travelers to overseas destinations, so that the Ansett workers would not lose their entitlements.  Four years hence, and Ansett workers are still owed an average $20,000 per worker by the Howard Federal Government, even though they still hold $151.3 million collected from the travel levy.

The Howard Government’s many agencies have spent millions of dollars without the authority of Parliament.  The transgressors in the past 8 years are: Family and Community Services, Finance and Administration, Foreign Affairs and Trade, Health and Ageing, Transport and Regional Services, Centrelink, Australian Bureau of Statistics, Australian Federal Police, ASIO, Australian Security Intelligence Service, Australian Competition and Consumer Commission, Australian Transaction Reports and Analysis Centre, Bureau of Meteorology, Office of Film and Literature, Classification, Office of National Assessments, Human Rights and Equal Opportunity Commission, and Office of the Inspector-General of Intelligence and Security.

When you study the evidence we have provided on our website, it leaves no-one in doubt that Australia has been white-anted by successive Federal and State Governments for the past 30 years plus.

But for a Government that emulates the style in which Hitler ruled Nazi-Germany, the Howard-Vaile-Liberal-National-Coalition Government wins hands down.  Their dictatorial manner is most evident in the way they rushed the full sale of Telstra bill, the Industrial Relations Laws and the Anti-Terrorism Acts through both Houses of Federal Parliament without reasonable and decent debate.  Add to this the Government’s stealth in signing the United States-Australia Free Trade Agreement (FTA) without telling the people of Australia what concessions they conceded for the agreement.  Link >>>> UPDATE – AUGUST 2004.

Multi-Media have governed on lies and deceit, and the Federal Auditor-General’s report corroborates our allegations including the assertions of Prime Minister Howard and Treasurer Costello that Australia has a sound economy, with an $11 billion plus surplus for the 2005-2006 budget.  Can they please explain how they can broadcast such a surplus when we have concrete evidence that both the Defence and the Customs Services Departments have many deficiencies in their general accountancy practices?

The 18 Constitutional breaches by the Defence Department were technical breaches?  Does Senator Minchin think all Australians are of the “brain-dead variety”?  Give us a break!  It’s worth remembering that, in 1983 when Malcolm Fraser lost the election to Bob Hawke, the outgoing Treasurer, John Howard, miscalculated his Government’s deficit by $7 billion plus.