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Legislative Assembly for the ACT: 1996 Week 4 Hansard (18 April) . . Page.. 1037 ..

MRS CARNELL (continuing):

The Bill introduces the concept of appropriation for outputs. This will promote a greater focus on what is being achieved by the use of public resources. The Assembly will know that considerable work has been done to improve measures of public sector performance. This includes reports of the Estimates Committee and the Public Accounts Committee and of the Auditor-General. This Bill also adds impetus and importance to this. The Bill provides that performance criteria will be subject to independent audit. These criteria will include measures of quantity, quality and effectiveness, timeliness, and price. This reform will enhance the quality of decision-making and improve accountability to the Assembly and to the community. I am undertaking consultations with the community on performance measures to be incorporated in the 1996-97 budget. This aspect of our financial management reform is of critical importance. Considerable progress is being made this year. I trust that this will be built on in future years through a consultative process.

The reforms introduce the concept of government as purchaser of services on behalf of the community. They recognise departments as the provider of services. The reforms will ensure that the customer, rather than the provider, evaluates the service. The concept of appropriation for expenses on behalf of the Territory is introduced in this Bill. Many areas of public expense, such as payment of concessions, are not and should not be substitutable for other departmental activities. They should be subject to separate appropriation by the Assembly. Similarly, the concept of appropriation for capital injections is also being introduced by the Bill. This recognises the numerous reports of committees of this Assembly urging improvement in the funding of capital programs. It recognises that capital is a scarce resource. It also recognises that expenditure of capital resources should be treated as an investment for the future.

Mr Speaker, I would also like to refer to the provisions of the Bill dealing with budget papers and financial statements. A serious deficiency in the existing Audit Act is that it does not establish an acceptable basis on which elected governments should be accountable to the Assembly or to the community. It is silent on the nature of budget documentation. The only audited Territory financial statement it requires is the aggregate financial statement. This does not relate to the budget and is an inadequate statement for accountability purposes on any measure. This is the case, notwithstanding the importance of adequate accountability to the Assembly and the community's right to know how its resources are being utilised.

The Bill establishes a number of important principles. Firstly, it enshrines the principle that budget and financial statements should be prepared in a comparable form, with the application of consistent principles. Secondly, it establishes minimum disclosure requirements for the nature of budget documentation and financial statements. This does not preclude provision of additional documentation, including that necessary to meet intergovernmental agreements. Thirdly, the Bill requires the presentation and reporting of the budget on a full accrual basis. Most Australian governments have a commitment to the introduction of accrual accounting. This was supported by the previous ACT Government.

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