These changes, which passed in Parliament on Wednesday night, build upon last month’s Treasurer’s Direction that codifies special budget arrangements for the state’s five integrity agencies.
The amendments reinforce the independence of the NSW Audit Office, Independent Commission Against Corruption (ICAC), Law Enforcement Conduct Commission, NSW Electoral Commission and the Ombudsman’s Office.
The changes to the Government Sector Finance Act 2018 (GSF Act) require integrity agency budgets to be reviewed by Parliamentary oversight committees.
The Parliamentary committees will examine and report on the agencies’ budgets, with the Treasurer then required to respond to the Committee reports.
The Treasurer will also be required to detail the reasons for any variations from agency budget proposals.
In addition to the above, the Government is setting aside $20 million in contingency funding for these integrity agencies for unexpected matters that require urgent attention.
The contingency funding system will also be subject to Parliamentary committee oversight.
The legislation complements a Treasurer’s Direction published on 6 August 2024 – which outlined the Charter of Independence for NSW Integrity Agencies.
This fulfils a request from the Chief Commissioner of the ICAC that the Government formalise the budget management model using a Treasurer’s Direction.
This direction, made under the GSF Act, is unprecedented and provides access for these agencies direct to the Cabinet itself during the preparation of each year’s budget.
The five agencies will be able to submit advice directly to the Cabinet’s Expenditure Review Committee (ERC).
In addition:
- The integrity bodies are quarantined from central agency financial management requirements.
- Integrity agencies will not have efficiency dividends imposed upon them.
- A specialist integrity agency unit within Treasury manages representations for budget funding and ensures that the independence of integrity agencies is preserved during the budget process.
This represents the latest milestone in the Government’s significant reform agenda aimed at helping restore public trust and improving public integrity, transparency, and accountability, which includes:
- The commitment of an additional $228.6 million in new expenditure over 10 years, commencing in the 2023-24 Budget, to ensure integrity agencies remain adequately resourced.
- Amendments to the Independent Commission Against Corruption Act 1988 to make it a legislative requirement for the Government to respond to recommendations of the ICAC directed to the Government.
- The implementation of recommendations made by the ICAC in relation to Operation Witney and Keppel.
- The landmark ban on political parties accepting donations from clubs which have gaming machines.
- A significant tightening of grants regulation to ensure the highest possible standards of grant administration.
Premier Chris Minns said:
“We are ensuring our integrity agencies are best placed to hold public officials and government departments to the highest standards.
“The additional checks we are introducing safeguard the funding of these independent agencies.
“We will continue to focus on strengthening our critical public institutions for the long-term benefit of New South Wales.”
Special Minister of State John Graham said:
“Integrity agencies must be allowed to get on with their essential work of investigating and preventing corruption and maladministration. The NSW Government is committed to supporting this work.
“Safeguarding their funding and enhancing transparency around funding to integrity agencies, including the ICAC, delivers on this commitment.”
