Auditor-General critical of Govt

Press, 1 July 1988, Page 1

Auditor-General critical of Govt

By

OLIVER RIDDELL

in Wellington

The Government has been strongly criticised by the Audi-tor-General, Mr Brian Tyler, for they way it has set up its Stateowned enterprises. “A large part of the public estate has been removed from the control of the people’s representatives,” he said in his annual report to Parliament yesterday. He could see no justification why Air New Zealand, the Bank of New Zealand, the Maori Development Corporation, Liquid Fuels Investment, Ltd, and Synthetic Fuels Corporation, Ltd, were excluded from the accountability requirements of the Stateowned enterprises legislation. Because of their exclusion, Parliament had no opportunity to participate in strategic decisions, agree on an appropriate set of performance measures, or to monitor their subsequent performances adequately.

In his first report to Parliament covering companies, corporations, statutory boards and other matters, Mr Tyler outlined an appropriate accountability framework for State-owned organisations. He said the issue was what information should be made available to Parliament while still providing maximum flexibility in management and minimum operating constraints. It should be Parliament that determined the boundaries

within which the organisations worked, that agreed to performance targets, and then reviewed performance, he said. Neither Parliament nor the Government should interfere once these boundaries had been set.

The boundaries had to be explicit enough to avoid misunderstandings while allowing accurate measurement of performance, Mr Tyler said. But Parliament as a whole, and not just the relevant Cabinet Minister, must be allowed to influence their development. “It is disappointing that the accountability requirements of the State-owned Enterprises Act have not so far been well ful-

filled,” he said,

“My particular concern is over the superficial nature of the statements of corporate intent prepared last year. These are fundamental to the process of accountability. “The statements tabled in Parliament last year contained objectives that were very broad and difficult to measure,” Mr Tyler said. Many had contained statements of philosophy and provided little information on future activities such as an indication of the scale of operations or the degree of capital expenditure planned. These statements had certainly not met the accountability needs of Parliament, he said. As long as Parliament had a proprietary interest in the operations of an organisation, even in instances of partial ownership, the process of public sector accountability ought to apply. The Opposition spokesman on State-owned enterprises, Mr lan McLean, said the report was a devastating indictment of the Government.

It had failed to make Stateowned enterprises accountable to Parliament, he said. The Auditor-General was telling Cabinet Ministers they must not treat State-owned enterprises as their personal playthings but make them accountable through Parliament to the people.

Mr Prebble, page 4