Page 1801 - Week 07 - Tuesday, 15 June 1993
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On further examination we discovered that in fact, through an account called the ACT Borrowing and Investment Trust Account, some $400m is invested. So we now have the money that is invested through the trust fund. The balance of the $400m is only held in the Consolidated Fund by way of provision or reserve of that kind, plus money that is held surplus on other trust accounts. We began to wonder, then, whether simply referring to the trust fund was adequate, since only $120m out of approximately $400m is currently invested, and that, no doubt, will change from year to year.
The committee concluded, and we have made recommendations to this effect: First of all, all money to be invested, whether it is from the trust fund, whether it is from the consolidated account, or whether it is from other trust accounts like, for example, the Housing Trust, or some other trust - all of that money that is available for investment - should be processed through the ACT Borrowing and Investment Trust Account and that would account for all of it. That would be the whole $400m currently available for investment. Secondly, there ought to be a management board set in place to oversight all of the investment transactions that take place in connection with this money. That includes, firstly, the requirement to ensure that there is a proper investment strategy spelt out so that everybody who need to know knows what the ACT Government's investment strategy is. That, I submit, includes members of this Assembly because it is public money we are talking about. Secondly, there is the requirement that there is somebody who is directly responsible for the oversight and management of the investment transactions with this money. Thirdly, there is the requirement that there is somebody immediately responsible for the contractual arrangements under which outside financial managers take care of our business for us.
This is a very important operation - $400m of public money at the moment. That could increase or it might reduce - we do not know - depending on the level of reserve money and the amount of money held in the various trust accounts from time to time. It is an amount of money that is very significant and it includes a fairly high proportion of money that is regarded as trust money. We, as a body that has to be accountable, collectively - the Executive is accountable in the ultimate extreme - believe that we ought to have a proper management arrangement set in place, with the rules clearly set down and clearly defined so that we know how these people are to work and who is responsible for what. This body, while it is a management and oversighting body essentially, should include the necessary expertise and should draw on the private sector for people with expertise and qualification in the investment of money of this order of magnitude. They can then also, if you like, become an advisory body to the Government in some respects; but they should be primarily a management board. One of the recommendations is that a broadly based management board be established to advise on and oversee the investment operations of Territory moneys through the ACT Borrowing and Investment Trust Account.
Madam Speaker, we are not being too prescriptive in how this might be done. We are merely suggesting to the Government that, in order for the members of this Assembly to be confident that this money is being properly managed, there are some preconditions under which we will approve the proposed amendment to the Audit Act, and they are set out in this report. We believe that it is prudent and sensible to proceed in this fashion, but we are leaving it open to the Government, to some degree, to determine.
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