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Legislative Assembly for the ACT: 1995 Week 9 Hansard (21 November) . . Page.. 2213 ..

Ms Follett: No, that is not true.

MRS CARNELL: I am sorry; the reality is that on two occasions the estimates committee recommended that 5 per cent of the tobacco franchise fee be allocated to the Health Promotion Fund and on two separate occasions the Government, under Ms Follett, said categorically that this would not be accepted.

I turn now to the Planning and Environment Committee Report No. 5 on the draft capital works program. I would like to thank that committee for its work and for its cooperation in considering the draft program within what was a very short timeframe. A total of 18 recommendations were made by the committee. Of these, six related to individual projects, while 12 related to the capital works process generally. The committee report confirms many continuing difficulties with capital works, including poorly defined links to government objectives and service delivery outcomes, inadequate provision of alternative options, an apparent short-term planning focus, treatment of capital works as a free good with a consequent unproductive bidding process, and a lack of accountability and management responsibility for better costing, evaluation and analysis of capital works requirements.

There have been some major changes over recent years in the level and detail of information required to support capital works. Current specifications and guidelines are comparable to, if not more rigorous than, those that apply in other jurisdictions. The capital works group was also established to examine proposals for technical feasibility and to clear proposals for further consideration in the budget context. Criticisms by the committee have continued, however, and in particular have centred upon a lack of adequate justification for proposals. Further substantial changes are being planned to improve the capital works process. These changes will be linked to the Government's financial management reforms, including, where appropriate, contestability and outsourcing of service delivery. The objective of these reforms will be to place the formulation of capital works proposals, decision-making and delivery of works onto a much more businesslike basis.

Key elements of these reforms include providing agencies with capacity, through funding for depreciation, to plan for and undertake replacement works, providing incentives for more effective use of existing assets and requesting that new works be treated as a capital injection and be subject to a business case in the context of the Government's service delivery requirements. (Extension of time granted) Fundamental to the reforms will be much greater ownership of proposals by sponsoring agencies. This will require agency budgets and financial reporting to include all capital funding relevant to that agency.

For 1996-97, the draft capital works program will be substantially brought forward in time, compared to past practices, and it will be referred to the Planning and Environment Committee in January 1996 to enable the commitment of approved projects to occur as early as possible after 1 July. The Government is committed to improving the way capital works are considered and managed. This will lead to maximising the effectiveness of capital expenditure.

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