Page 1147 - Week 07 - Tuesday, 22 August 1989
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Commission will in time establish debt servicing expenditure needs for the ACT without the risk of an inherited debt liability exceeding this capacity.
The ACT's contingent liabilities arising from claims of an insurance nature are being addressed in some detail. Following a major consultancy by Alexander Stenhouse Ltd, the Government has decided that the ACT will, as is the case with other governments, adopt a self-insurance policy. However, recognising the smaller financial base of the Territory, I have sought from the Commonwealth an indemnity for claims in excess of $1m for two years.
We are also identifying the areas of government which should be subject to more detailed risk management review and implementation. This will complement the Government's initiatives in the field of occupational health and safety. The ACT will also participate, for the first time, in Commonwealth-State natural disaster relief arrangements.
A further area of liability inherited from the Commonwealth is accrued long service leave. There has been an actuarial assessment of the extent of the unfunded liability transferred from the Commonwealth. The assessment estimates the liability to be $58m as at 1 July 1989. Accordingly, I have written to the Commonwealth proposing that a capital assistance grant of $58m be made to the ACT Government in 1989-90 to compensate for the accrued long service leave liabilities transferred from the Commonwealth to the ACT Government and for which financial capacity has not been transferred.
The other side of any review of a major organisation's balance sheet is, of course, an analysis of its assets. In the area of fixed assets, the Government is undertaking a review of property to ensure that its approach to asset management is both responsible and responsive to the changing needs of government. For example, the Government has put forward a plan to use surplus school buildings and land. Community views are very important on sensitive issues such as these, but getting value for assets is an essential part of future financial planning.
In the area of current assets, the Treasury conducts a cash management operation which trades actively on the national money market to ensure that the Government obtains the maximum return on its cash balances. The initial budget statement includes $10m from this source, and systems are still being improved in this area.
Mr Speaker, the Government is also conscious that on self-government day it inherited an audit Act which was essentially a working adaptation of the Commonwealth Act. The financial administration and audit legislation of the ACT is the most fundamental protection that this Assembly and the community at large have as to the probity of government action. This is an area in which the States have expended considerable attention over recent years, and the Government wants an audit system appropriate to ACT needs.
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