Page 4672 - Week 15 - Wednesday, 7 December 1994
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and, very importantly, they carry the full force of law. The directions are issued pursuant to the provisions of sections 125 and 126 of the Audit Act 1989 and Finance regulation 81. Paragraph (d) of subsection 126(1) and Finance regulation 81 are quite explicit on this matter. They say that failure to comply with a direction shall be deemed to be a contravention of the Finance regulations.
Madam Speaker, as it is apparent that the thrust of what Mr Humphries is trying to do here is to seek a legally enforceable method to ensure prompt payment of government accounts, and given that the Treasury directions already achieve that objective - they are legally enforceable - I consider that his Bill is unnecessary. But that is not the only problem with it. As I stated during the in-principle debate, the Bill has been poorly thought out, and it appears to include a number of serious oversights and unintended consequences. A number of clauses - in particular, those dealing with the due date - are convoluted and may, in fact, provide a disadvantage where the due date is actually specified in the contract.
Furthermore - I would like to thank Mr Moore for raising this matter during the in-principle debate - there is the important matter of the application of Mr Humphries's Bill to accounts which are the subject of dispute. Mr Humphries indicated that the Bill covered that matter. He further indicated that, as a consequence of his proposed legislation, the Territory would be required to resolve any disputed matter via the courts. Madam Speaker, this approach, which is completely at odds with normal practice, where the claimant would need to litigate where an amount is in dispute, is, thankfully, and despite Mr Humphries's assurances, not actually present in his Bill. There is, in fact, no dispute settlement provision. So, where a dispute is able to be resolved without reference to the courts, a determination of when the account became payable may be very difficult to ascertain from this Bill.
Madam Speaker, there are numerous other definitional and practical problems present in what is, I consider, a poorly drafted piece of proposed law. Despite the fact that Mr Humphries is well intentioned - and I recognise that - his Bill effectively achieves nothing that the Treasury directions have not already achieved, with perhaps one exception. I think that what Mr Humphries's Bill does do is to send a completely inappropriate message to public servants. That message is: If in doubt, do not risk an interest penalty for late payment; just pay the bill. This is completely at odds with the Government's financial management principles, which place the protection of public moneys above this sort of expedient and inappropriate advice.
I reiterate that the Government does share Mr Humphries's concern about late payment. We acted some years ago to introduce what are legally enforceable arrangements to ensure that the Government's trading clients are properly protected from the effects of late payment. For those few accounts which are paid late, I think that the further delay that would be required to calculate penalty interest can hardly serve the interests of business, particularly where the overdraft rates paid by businesses may greatly exceed the Supreme Court rate that is specified in the Bill. So, we remain unconvinced that business would be better off under the arrangements that Mr Humphries has proposed. Accordingly, I find myself still unable to support this Bill.
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