Page 1687 - Week 06 - Thursday, 20 May 1993
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Let me give another example of something that happened in the past in another department outside the ACT. Let us say that the budget forecast for the year was $290m. Three-quarters of that money had been spent and there was a little over a month to go. They got up to spending $270m of it, which was not a bad effort, but they still came in under budget. The threat is that they would lose that money for the following year.
Ms Follett: So they ought to. It is very poor budgeting.
MR STEVENSON: The Chief Minister says, "So they ought to". I agree that it is very poor budgeting. I am raising the matter and suggesting some solutions because some of these things happen in the ACT. I picked a couple outside the ACT.
Mr Kaine: No, we always overspend here, Dennis. We never underspend.
MR STEVENSON: The system encourages overspending. Obviously, if you could not do the job within budget and actually needed more, the argument for reducing your budget is going to sound a little bit lame. In the Federal Parliament you can carry over 6 per cent of your budget compared to our 3 per cent of non-salary funds. Federally, the Finance Department issues one simple, single booklet that explains all these procedures. That is a very good idea. Moneys can be carried over in the Federal area and that includes quarantining certain amounts that can run on over a period of years. They can be used for just about any matter, even capital funding. Borrowing against future budgets is possible in the Federal area as it can be negotiated by Federal administrators. It is clear that the Commonwealth has lifted its game. These are fairly recent ideas within the Federal arena and they give us a lead as to what we might be able to do.
Let us have a look at a couple of other problems that might occur. If you have a very large budget in a department, that can affect pay scales set for people within the department. If the budget allocation is not spent, as I said, you can lose it. But let us look at a situation where someone has a budget of $100m, spends $87.5m and saves $12.5m or 12.5 per cent. It is highly likely that they would lose that budget. Does that make a lot of sense? Would it not be feasible to allow them to carry the money over, or a reasonable percentage of it, and use it with cost saving measures in mind? They may wish to introduce an entirely new computer system within the section or department, or they may wish to undertake a major training program. These are just a couple of hypothetical examples. There are many areas where the funds can usefully be carried over, certainly for capital expenditures.
Let us look at some of the solutions. I think it would be an excellent idea to reward public servants for savings. I think this is a good idea for members of parliament. I often talk about it. Say we had a billion dollar budget. I would suggest that we say to politicians - I do not necessarily mean members in this Assembly; I am talking about a principle, "Your budget is $100m. We will give you a certain percentage or a fraction of a percentage of whatever you save". Boy, I think you would see some action then. A principle that we understand is the principle that what you reward you get. If you reward thrift, if you reward effectiveness, you encourage that and you would get more of it.
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