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Legislative Assembly for the ACT: 1997 Week 13 Hansard (2 December) . . Page.. 4355 ..

MRS CARNELL (continuing):

of the FMA and its associated amendments, thereby further supporting the new initiatives announced by this Assembly with regard to financial management reforms. These amendments to the Bill do not fundamentally change the legislation. They are simply technical changes to improve the responsiveness of the legislation to policy changes and to allow the business of government to operate smoothly.

I will address each proposed amendment. Mr Speaker, the financial management reforms recognise that efficient and effective financial management necessitates not only appropriate accountability mechanisms but also a degree of flexibility. In recognition of this, the Bill, in clauses 6 and 7, amends sections 14 and 15 of the principal Act. These sections deal with the transfer of funds between and within appropriations respectively. In the case of transfers between appropriations, the current proposed amendments to the Bill seek to omit subsection 14(2) of the principal Act. The omission of this subsection enables the transfer of funds between different appropriations. This will allow the Government to implement the most efficient and effective financing methods and also appropriately reflect the nature of the appropriations for the delivery of the approved outputs.

Subsection 14(3) of the principal Act is also clarified by further defining the 3 per cent threshold limit to 3 per cent of the appropriation type that is to be reduced. The proposed amendment to subsection 14(3) to establish a 5 per cent threshold limit has been withdrawn after negotiation with various members of the Assembly.

In the case of transfers within appropriation, the current amendment restricts the transfer of funds to 3 per cent or $300,000, Mr Speaker. I understand that Mr Berry wishes to amend that $300,000 to $150,000. For the information of members, it is currently $50,000 and, taking into account that 3 per cent of particular appropriations can be significantly more than that, obviously we need to sort out those figures. The established accountability mechanisms for both types of transfer will remain unchanged. Where required by the FMA, the Government will table details of the transfers within three sitting days after the direction is given. In this way the balance between flexibility and accountability is established - that is, there is no way that the Government can do these things without the Assembly knowing about them.

At present section 17 allows the Treasurer by instrument to vary appropriated specific purpose Commonwealth payments to reflect the amount actually provided by the Commonwealth. This section recognises that it is not always possible to budget accurately for specific purpose Commonwealth grants, particularly when the ACT budget precedes the Commonwealth's. This section, however, does not require the Treasurer to provide a copy of the direction to the Legislative Assembly. What this amendment seeks to ensure is that the Legislative Assembly is fully informed when changes such as these are necessary. To this end, this amendment requires the Treasurer to lay a copy of the direction before the Legislative Assembly within three sitting days after the direction is given. Mr Speaker, I will leave it there. I ask that the Assembly support this amendment No. 1 circulated in my name.

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