Page 1689 - Week 06 - Thursday, 20 May 1993
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We have introduced a range of strategies to improve equity, the fairness of decisions, and to assist the Government in meeting our priority policy objectives. These measures include, for example, resource agreements with major spending and service delivery programs, like Health, ACTION and the Canberra Institute of Technology. They include revisions to and restructuring of budget control levels, the introduction of a threshold to avoid minor claims against the Treasurer's Advance, and the introduction of a carryover system to provide for the carryover of up to 3 per cent of unspent program non-salary running costs at the end of the financial year.
They include amendments to the Audit Act to provide for allocation of funds to programs for increased funding from the Commonwealth for tied grants, and amendments to the Audit Act to provide for appropriated funds to be transferred with the approval of the Executive between and within programs, limited to 3 per cent of the original appropriation levels. They include incorporation of the forward estimates into the annual budget and also a commitment to uniform presentation of budgetary information to enable comparability between State and Territory financial positions.
Budgetary reforms such as those that I have mentioned are aimed at improving financial planning, at providing greater flexibility to program managers in the management of their resources and assisting in the development of longer-term strategies for meeting the financial adjustment task that the ACT has to face. These reforms have been introduced gradually and carefully, taking into account budgetary allocation policies in the Commonwealth and in the States, and we will continue to monitor the reforms implemented in other jurisdictions. Where appropriate, we will adopt those practices which will assist us to manage the financial resources of the ACT better.
The specific issue of carryovers which Mr Stevenson referred to, and the so-called end of year spend-ups, I think can quite easily be taken out of any sensible context. Experience in other governments, including the Commonwealth, does indicate that a pattern of building up the rate of expenditure towards the end of the year is not unusual. Indeed, Mr Stevenson has referred to that. In many cases it can reflect prudent management practices. Agencies may, for example, defer committing major items of expenditure until later in the year when the end of year outcome is clearer.
At the beginning of any fixed budget period managers face the risk of unforeseen matters arising which will consume both resources and time but for which they have a responsibility to manage within their budget limits. That occurs frequently. It is only natural that as the year progresses the risk of such unforeseen priorities occurring is reduced and therefore commitments for expenditure can be entered into with greater confidence. It would be incorrect, therefore, Madam Temporary Deputy Speaker, to conclude that patterns of expenditure that reflect higher rates of expenditure towards the end of the year than at the beginning reflect nothing more than efforts to exhaust budget appropriations. In many cases this pattern can reflect good management practice.
The budget rules applied within the ACT enable the carryover of non-salary running costs within agreed limits. Furthermore, no agency is penalised in any way for completing the year under budget. Other than in exceptional circumstances, the budget base for the next year is not affected by such underexpenditure. This is especially the case for major plant and equipment when the timing of delivery and payment can be uncertain. To do otherwise
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