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Legislative Assembly for the ACT: 1996 Week 12 Hansard (19 November) . . Page.. 3782 ..

MS TUCKER (continuing):

Accrual accounting, obviously, does have some benefits, which we have heard about at length, so I will not elaborate on them here. But I want to say again that accrual accounting in its present form still tells us about only emerging financial liabilities such as superannuation and the depreciation of physical assets. Future financial liabilities will have an impact on the capacity to fund social services. But the danger, once again, with a model such as this is that we kid ourselves into thinking that these are all the costs. The costs are much broader and deeper than this.

The Greens are very pleased that, after knocking the idea of environmental accounting as loopy, there now seems to be genuine acceptance from the Government, or certainly from some senior officials, that having a better idea of environmental costs is the way to go. We look forward to working to apply appropriate models for the ACT. The correspondence between the Auditor-General and the committee has also been discussed. There are glitches, because this is the first year; but it does appear to be reasonably serious that unaudited financial statements were used for the preparation of the budget. The Auditor-General's report to the Assembly is, indeed, going to be very interesting.

As well as dealing with accrual accounting, the committee was faced with this budget being the first with a purchaser-provider model operational. The Greens are still very sceptical about the purchaser-provider reforms, for a number of reasons, including efficiency. When we look at an area in Urban Services, for example, where the purchaser is about 20 per cent of the overall expenditure on a particular service area, you have to wonder whether we are really decreasing the amount of bureaucracy. I think we really need to question the merits of the purchaser-provider model in a small jurisdiction such as this, particularly in some of the smaller departments. I acknowledge the benefit of having a clearer idea of what we are providing and how much these services cost; but we all have to be aware of the obvious danger of focusing on the cost as a sole measure of effectiveness, especially to compare very different areas.

The arts versus sports grants are a good case in point. Using a dollar figure to judge the effectiveness of an arts grant, as opposed to a sports grant, is very dangerous. Of course, arts grants are more costly to administer. So, comparing that to the cost of administering a sports grant does not necessarily tell us anything about the effectiveness of delivering services to the community.

Ms McRae: That is right, particularly when they make random decisions anyway. "Where was futsal?", I ask you.

MS TUCKER: Yes. I have just been to a meeting of the arts community, where they were being informed - but it was called "consultation", and they could not accept that. It was more like being informed about this trial that is being imposed. I did not see that the bureaucrats had an answer to the cost of this trial and the cost implications of it, let alone to the inappropriateness of it, for many other reasons.

If new models such as purchaser-provider, performance agreements and output-based funding are to be effective, the models need a lot more work. I think there was perhaps some explicit acknowledgment of the need for significant improvement and refinement in some areas, particularly on the indicator front. Apart from the overall lack of quality

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