Committee Details

COMMITTEE'S CONSIDERATION

In its Report No. 34, 57th Parliament - Annual Report 2021-22, tabled on 17 October 2022, the committee reported on its consideration of a number of Auditor-General's reports referred to it, including Auditor-General Report 15: 2020-21 - State finances 2020. The committee did not resolve to hold further inquiries into these audit reports and made no recommendations to the Legislative Assembly.

Overview

Role of the Auditor-General

The role of the Auditor-General is to provide Parliament with independent assurance of public sector accountability and performance. This is achieved through reporting to Parliament on the results of its financial and performance audits and other insights.

About the Auditor-General Report

The Auditor-General’s report to Parliament 15: 2020-21—State finances 2020 is a financial audit report analysing the consolidated financial position of the Queensland Government.

Report 15 advises that the following financial statements are reliable and comply with legislative requirements and Australian accounting standards:

• Queensland General Government and Whole of Government Consolidated Financial Statements, which provides a consolidated view of the financial results for 93 state entities
• Consolidated Fund Financial Report, which records amounts received into and paid out of the Queensland Government's consolidated fund (the government’s central bank account)
• Public Report of Ministerial Expenses
• Public Report of Office Expenses for the Office of the Leader of the Opposition.

Report 15 notes that the Queensland Government reported a net operating deficit of $9.2 billion for the total state sector, an increase of $8.1 billion on the previous year. Revenue earned by the state decreased by 4% to $66.8 billion. Expenses incurred by the state increased by 7% to $76 billion.

The report further notes that the state’s net worth (the difference between total assets and total liabilities) declined by $8.6 billion (4.5%). The value of total state sector borrowings in 2019-20 increased by $12.2 billion (11.9%) to $115 billion, and the Queensland Budget 2020-21 forecasts that borrowings will continue to increase.

The report notes that the Queensland Future Fund—Debt Retirement Fund is expected to be established by 30 June 2021, with initial investments valued at over $5.7 billion. Amounts withdrawn from the fund may only be used to reduce debt.

Report 15 advises that COVID-19 had a significant impact on the financial results. This included reducing revenue (mostly due to the downturn in economic activity), increasing expenses (largely due to measures implemented by the government and higher employee expenses, mostly in health and education), increasing borrowings (to fund responses and acquire new assets) and decreasing investments (due to the impact of COVID-19 on financial markets).

Challenges to the Queensland Government’s future financial performance include the ongoing impact of COVID-19, uncertainty about the level of future funding from the Australian Government, an expected weakening in coal prices, additional liabilities potentially arising as a result of native title claims, and ongoing international geopolitical and trade tensions.

The report makes two recommendations for the Treasurer and Queensland Treasury. The first calls for a legislative timeframe for the certification and tabling in parliament of the consolidated Queensland Government financial statements each year. The second recommends a requirement for financial statements to be prepared, audited and made publicly available for each fund created under the Queensland Future Fund Act 2020. The Under Treasurer’s response to the recommendations is included in the appendices to Report 15.

Referral to Committee 

Standing Order 194B provides that the Committee of the Legislative Assembly shall as soon as practicable after a report of the Auditor-General is tabled in the Assembly refer that report to the relevant portfolio committee(s) for consideration. 

The committee is responsible under section 94 of the Parliament of Queensland Act 2001 for assessing the integrity, economy, efficiency and effectiveness of government financial management by examining government financial documents and considering reports of the Auditor-General.

The Committee of the Legislative Assembly referred this Auditor-General’s report to the committee on 25 March 2021.