Page 1803 - Week 07 - Tuesday, 15 June 1993
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It is apparent by the way the report and its recommendations are expressed that there is no clear view on the directional nature of these conditions. The first condition - that all investments of the Territory be undertaken through the ACT Borrowing and Investment Trust - is expressed too broadly. Under present arrangements, such Territory entities as the ACT Electricity and Water Authority separately invest their surplus funds. Whether this is appropriate is certainly a very important question, but it is not one that the committee has turned its mind to, nor come to a conclusion on. The next two recommendations, when taken together, point to the confusion within the report as to what should be the role of the management board. On the one hand, there is the proposal that it be advisory, overseeing ACTBIT's operations. On the other hand, it is required to report to the Assembly. Further, in the body of the report, there is the requirement that the board appoint the external fund managers. Madam Speaker, in the evidence presented to us by Treasury it was clear that the issues of accountability and expertise are separate.
On the question of expertise, Treasury advised that it enhances the capabilities of its own staff with the selective use of external advisers. Currently these include the actuarial firm of Towers Perrin and the capital market skills of Commonwealth Bank Advisory Services. This is appropriate and reflects the fact that the financial marketplace is both sophisticated and changing. It is Treasury's role to obtain maximum investment returns within prudent limits. Every dollar earned this way is one more dollar that need not be funded by the taxpayers of the ACT. The proposal to engage external funds managers is a further example of seeking out and securing the best advice available to the Territory. Strict guidelines, limits, reporting requirements and auditing are to be included in the contracts. Again, I consider that this is appropriate.
The separate question is that of accountability. The Audit Act is the definitive legislation in this area and it is clear that the Treasurer is accountable to this Assembly and to the community. In certain circumstances the Treasurer is able to delegate responsibility to officers of the Treasury. An advisory management board, as proposed in this report - I use the term "advisory" in an advisory fashion - is a confusion of terms. The appointment of a broadly based group of experts to advise Treasury will not result in such a group being responsible and accountable for the actions of the Treasury. It is the Treasurer, supported by the Treasury, who must report to the Assembly and who must take executive responsibility for entering into contracts. Madam Speaker, it is with regret that I find the report of the committee to be, at best, indecisive, and therefore I must distance myself from its recommendations.
MR MOORE (5.12): One of the things about the Audit (Amendment) Bill and the committee's response is that it is exactly that - a response to the Audit (Amendment) Bill. The committee worked hard in order to have a response to the Bill back to the Government at the beginning of this sitting, in order to provide the Government with the opportunity to deal with the Bill prior to the break in the middle of the year. That being the case, Madam Speaker, I think it is inappropriate to suggest that we should have gone broader than just the Audit Bill itself, as, I believe, Ms Ellis has recommended. I think that what we have achieved here is an appropriate balance between accountability, on the one hand, and risks, on the other hand.
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