Page 1555 - Week 06 - Tuesday, 18 May 1993
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ADJOURNMENT
MADAM SPEAKER: Order! It being 9.30 pm, I propose the question:
That the Assembly do now adjourn.
Mr Berry: I require that the question be put forthwith without debate.
Question resolved in the negative.
AUDIT (AMENDMENT) BILL 1993
Debate resumed.
MR KAINE: It is a course that expands current options and is a course pursued by some superannuation fund managers in the Commonwealth and the States and in major public institutions. But because there are a number of adverse precedents for this Bill or the action that is proposed in it, I do not believe that it should be supported. The benefits from this proposal are arguably a lot higher than the Government's resources could produce on their own, but with higher returns there is also higher risk. In the ACT's financial situation, entertaining higher risks is not prudent, even if the risks are somehow containable - and I am not convinced that they are. This short Bill totally lacks reference to any investment strategy or any management structure to ensure that returns are within acceptable levels of risk.
What is proposed in this Bill is a scheme that removes the Executive from the management of, responsibility for, or ability to foresee, the consequences of investment of trust funds. That, in fact, was the root cause of the financial disaster in Victoria and South Australia. In both those States the management of community funds was divorced from direct control, high gains were sought without proper or adequate accountability, the money managers were not properly overseen by the Executive, errors and corruption occurred without detection and the appropriate controls were not in place. The Ministers responsible had no idea of what was happening to the funds supposedly under their control. This Bill will put our Executive in that same position. The managers made mistakes and the community suffered. The Government had given up its responsibility to experts who failed it without the Government having the wherewithal to know that they had failed. That simply must not happen here, and it certainly must not happen with our superannuation funds. We must not and we cannot ignore the warnings we have in Victoria and elsewhere.
I am not simply acting conservatively. The risk of inadequate controls is real. It has been demonstrated in other places. The Bill imposes no requirement for reporting to the Executive; it makes no reference to the provision of management guidelines for the investments that might be made on our behalf; it sets out no rules or procedures for ensuring a basic level of protection for funds.
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