Labor has been accused of inadequately funding one of the central institutions safeguarding public administration, with transparency advocates and independent Senator David Pocock criticising commitments for the Australian National Audit Office (ANAO) in this week's budget.
Budget Funding Concerns
Parliament's Joint Committee of Public Accounts and Audit had previously warned the Albanese government that the auditor general's financial position is unsustainable and of 'serious concern' – even as the number of government agencies and functions subject to oversight expands significantly. Tuesday night's budget included new annual funding of $99.8 million for the ANAO, a below-inflation increase from the 2025–26 budget appropriation of $98.2 million.
The budget papers show the ANAO's average staffing level dropping from 435 in 2025-26 to 421 in 2026-27. The funding comes amid warnings that the ANAO will already struggle to meet its targets for audit reviews of the work of government departments and major spending programs. The agency is charged with supporting accountability and transparency through independent reporting to the parliament.
Auditor General's Warning
In October last year, the Auditor General, Caralee McLiesh, told Senate estimates hearings that the ANAO had been operating in deficit continuously for the past eight years, a position she described as no longer sustainable. The ANAO's annual report showed it recorded a loss of $5.3 million in 2024–25, with accumulated cash reserves being required to close the funding gap. Remaining reserves are required to fund liabilities to ANAO staff.
The ANAO's audit target was cut from 48 reports to 38-42 reports in 2025-2026, but even the lower target might not be met due to the ongoing budget challenges. Automation, streamlined business processes, and risk strategies are being used to drive efficiency.
Criticism from Transparency Advocates
Centre for Public Integrity Executive Director, Catherine Williams, said key oversight agencies including the ANAO should be subject to separate parliamentary appropriations, and an independent funding panel should be established to advise on appropriate resourcing levels. She warned the budget allocation announced this week was badly inadequate.
'A watchdog without resources is not a watchdog,' Williams said. 'It is a warning sign that government does not take accountability seriously. The Centre for Public Integrity's recent work demonstrates that key integrity institutions – including the auditor general – must be designed to withstand political pressure, including through independent funding and appointment processes and robust oversight mechanisms.'
Senator Pocock's Response
Pocock, the ACT independent senator, said the ANAO had uncovered serious failures by both Coalition and Labor governments, including grants rorts and defence procurement problems. 'The auditor general is now being forced to scale back the number of performance audits the office undertakes, and to discontinue the Major Projects Report, which has tracked the cost and schedule of major defence acquisitions,' he said.
'This is a report that considers projects that are notorious for running over budget and over time. This is shortsighted in every way. A well-funded ANAO pays for itself many times over by finding the waste no one else will. I'll keep pushing for the funding it needs to do its job.'
Pocock welcomed a small budget increase for the Commonwealth Ombudsman in the budget, worth $6.2 million over the four-year forward estimates period.
Defence Concerns
The shadow defence minister, James Paterson, has previously highlighted the breakdown around the Major Projects Report in the defence portfolio, arguing independent scrutiny and parliamentary oversight of spending and procurement 'is more important than it ever has been in today's dangerous world.'
