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Legislative Assembly for the ACT: 1996 Week 6 Hansard (23 May) . . Page.. 1736 ..

MRS CARNELL (Chief Minister and Treasurer) (5.59): Mr Speaker, the Government will not be supporting this amendment. It is unacceptable because controlling investments by law, including regulations, is flawed in principle and is ineffective in practice. One of the interesting things to note is that Victoria tried to control investments. In fact, Victoria had some of the tightest government controls on investments, but it certainly did not stop the Tricontinental disaster. The fundamental problem in Victoria was lack of disclosure. The Victorian Audit Act was one of the most restrictive in specifying how money could be invested, but all it did was set up incentives to avoid restrictions and it led to investments by Tricontinental which nobody, apart from, we understand, two or three people on the inside, actually knew about. It is far better to rely on openness and transparency. Controls just do not work. All of the guidelines will be visible and transparent. They will be available to all, including, Mr Speaker, on the Internet.

The investments are for the purpose of liquidity management. The key is to maximise returns for the Territory and minimise risk. I am sure that that would be the case under any government, even those opposite who seem to think it is quite funny. Investments are not for any policy or political purpose such as promoting or sanctioning any particular entity in the private sector. It was put to me that possibly the Greens' view in this area was to attempt to rule out particular companies or sectors, such as possibly CRA, from having any ACT Government investment. The thing that we should be most concerned about is getting a maximum return for ACT taxpayers' money, obviously within prescribed investments. The Territory should not be disadvantaged in its ability to respond quickly to unanticipated changes in market conditions; but a disallowable instrument would, and certainly could, involve significant time delays.

The ACT has established the highest possible credit rating, reflecting the responsible approach which we have taken.

Mr Berry: Courtesy of Rosemary Follett.

MRS CARNELL: That includes the previous Government. I can be nice, even if you cannot. It would be irresponsible to cast any doubt on the reputation of the ACT Government for financial prudence and responsibility. The Greens' amendment creates the potential for maturing investments not to be renewed if an instrument is disallowed. This could really damage the ACT, in terms of reputation with regard to investment and also with regard to income for the community.

MR MOORE (6.03): Mr Speaker, I am flabbergasted by that talk from the Chief Minister. Not so long ago, when she was in opposition and we were dealing with the issue of derivatives, she had a very different attitude indeed.

Mrs Carnell: But this Bill does not allow for derivatives in investments.

MR MOORE: She indicates that this Bill does not allow for derivatives. Indeed. The issue is about whether the Assembly should say whether we allow certain types of investments or not. When she was in opposition she was very keen for us to examine very carefully the issue of derivatives, which we did. In fact, the Assembly, after a great

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