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Video: How our system works

Ever wondered about all that money our government seems to have, and how it pays for everything?

This video file is 9.5MB in size, and is 2 minutes and 55 seconds long.

Transcript of this video

Ever wondered about all that money our government seems to have, and how it pays for everything? Ever wondered where it gets all that money from, to build roads, museums, hospitals, schools and all those other great things we have in this great little country of ours?

It's really quite simple. People who have jobs pay a little bit of what they earn to the Government. These are called taxes. And people who own a house or property pay money to their local council. (Because councils pay for things, too.) These are called rates. Actually, some people think both taxes and rates are quite a lot of money and sometimes you’ll hear these people grumble. That's another story.

she can report on anything she finds, to anyone she chooses, because the Auditor-General is completely independent

This story is about the money – the rates and taxes – and what happens to it.

The Government and the local councils collect the peoples' money and decide how and where to spend it. There are a lot of organisations to help out. Think of the schools, the colleges, the universities, the public swimming pools, libraries, the Police, the firefighters – and you get an idea of how far this money needs to go.

Like most other countries, we've got an Auditor-General to make sure that money isn't wasted and is spent on what it was supposed to be spent on. An auditor is someone who examines an organisation's finances, and sometimes its performance, to make sure everything's all right. This process is called an audit. An auditor writes a report and makes suggestions about how the money could be spent better, or how the organisation could work more efficiently.

The Auditor-General is in charge of all the auditors who keep an eye on where and how our taxes and rates are spent.

The people who get elected to run the country – those in Government – spend money, too. The Auditor-General watches what the Government does as well, which is why the role is sometimes called Parliament's watchdog – the Government can't tell the Auditor-General what to do. Instead, the watchdog reports to the whole of Parliament (all of the elected MPs, not just those in power).

The Auditor-General guards against organisations doing silly things with the public's money, and sniffs out problems. If the watchdog finds something that smells fishy, like money gone missing or money being wasted, then the Auditor-General can launch a special audit called an inquiry, to find out what's going on. And she can report on anything she finds, to anyone she chooses, because the Auditor-General is completely independent.

September 2011