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Legislative Assembly for the ACT: 1997 Week 13 Hansard (2 December) . . Page.. 4295 ..

MRS CARNELL (continuing):

At paragraph 2.30, the Auditor-General made comparisons with the Commonwealth and other capital cities. The committee considers that interstate comparisons of the kind attempted by the audit are important; but, given the relatively crude nature of these comparisons, caution is required in dealing with them. That is at paragraph 2.37. The Government reiterates the comments made in its submission to the committee that comparisons with State government, local government or other major cities are invalid because of the fundamentally different nature of the ACT to any of the comparison groups.

The committee makes comment at paragraphs 2.54 and 2.57 regarding the treatment of sale and lease-back and other financing-type arrangements. The Government received advice from Macquarie Bank, who were themselves advised by KPMG, on the fleet lease; and the Commonwealth Bank on the lease and lease-back of the ACT Magistrates Court and Dame Pattie Menzies buildings transactions. The advice was that these transactions were operating leases. Despite this, the Government acknowledged the Auditor-General's concerns and, in the end-of-the-year financial statements, the lease and lease-back of the ACT Magistrates Court and Dame Pattie Menzies buildings have been treated as borrowings even though the Government holds a different view about the interpretation of the application of that accounting standard.

The Government believes that the financial management reforms it introduced have made managers more accountable for their operating results. The improvement shown in the 1996-97 operating results for reporting entities is a reflection of the change in management approach. It is expected that further improvements in operating results will be made following final implementation of the financial management framework in 1998-99.

The committee's first recommendation is that the Government present a table of municipal accounts for the current budget year, that is, 1997-98, and that such a table be presented in all further budgets. The Government does disagree with this recommendation. The Government believes that the reforms it has introduced have changed the fundamental focus of the budget from inputs to service delivery and outcomes. The provision of municipal services forms part of many output classes across different agencies. Managers within these agencies are responsible for overseeing the provision of a variety of services to the Government in accordance with their purchase agreements. The information will not assist managers in providing services in an efficient and effective manner. The Government believes that the municipal information would still not be comparable to other municipal accounts because of the unique nature of the ACT.

The fundamental changes to the financial management framework introduced by this Government are aimed at encouraging departments to provide goods and services to the community in the most efficient manner possible. Management focus is not on a particular aspect of their operation but on the entire operation. Their performance is based on their ability to deliver outputs, and they are assessed according to the performance measures relating to the outputs. Delivery of municipal services is a subset of a range of different outputs and cannot easily be isolated and reported on separately. The Government is accountable to the Assembly and the community on a complete range of services, not just municipal services.

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