According to the opposition, it could mean disaster for businesses as there is a move to sharpen the teeth of the auditor-general.

The private member’s bill of independent MP Rob Oakeshott that targets to give the auditor-general greater powers to follow money trails and to ensure the government gets its money is being debated by the Senate.

The audits will be extended to government business enterprises such as NBN Co. should the bill be passed.

Furthermore, the bill will also allow the investigation on how federal money has been used by states and territories and assess the performance of contractors such as home insulators.

Due to the risks of audits, many small and medium sized enterprises may already opt to avoid government contracts. This was told to the Chamber by Liberal Senator Mathias Cormann. With this, those who will tender for such contracts are only those companies that have resources that are enough to comply with an investigation.

"It will get rid of the pesky competition from small and medium tier businesses who will just give up because there is so much red tape involved," said Cormann.

On the other hand, Senator Nick Xenophon believes in the importance of improving the scope of the auditor-general particularly in ethics, and effectiveness of government programs.

According to Labor Senator Mark Bishop, the bill contains the appropriate restrictions of the extent of power of the auditor-general.

"It's not a frolic on its own by the auditor-general. It's not able to cavalier and investigate near and far, the audit is limited,” he said.

The Commonwealth is the primary focus of the auditor-general.

For now, debates continue on the Auditor-General Amendment Bill 2011