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Legislative Assembly for the ACT: 1999 Week 7 Hansard (30 June) . . Page.. 1784 ..

MS CARNELL (continuing):

As Chief Minister, I take responsibility for that mistake and take this opportunity to formally apologise for the fact that it occurred. However, it is important to stress that the actions of every public servant were well intentioned and were not the result of any improper or unlawful motive. The people concerned acted as they had always done, believing that they did so fully in accordance with the law. Mr Speaker, what this history shows is that the Bruce Stadium upgrade was not carried out in an ad hoc fashion, or with any improper or unlawful motive. I would like to say that again, Mr Speaker: This history shows categorically that the Bruce Stadium upgrade was not carried out in an ad hoc fashion, or with any improper or unlawful motive.

Mr Speaker, I will now turn to the legal issues surrounding the validity of the Bruce Stadium loan transactions. A number of questions were raised by the Auditor-General and these questions were submitted for advice by senior counsel - Richard Tracey, QC, of the Melbourne bar. In essence, Mr Tracey was asked to advise whether the loans and their repayment were legally authorised under the Financial Management Act. If Mr Tracey decided that the loans made by the CFU were not legal, he was asked then to advise whether the reason was that the legislation did not permit such transactions at all, or whether any illegality followed as a result of administrative defects. Mr Tracey was also asked to advise on the effect on his answers to these questions of a new financial management guideline which was given retrospective effect to the date of commencement of the Financial Management Act.

Mr Speaker, it is important for members to remember what Mr Tracey said. Remember, it is important that Richard Tracey, QC, is one of the most eminent administrative lawyers in this country. Mr Tracey said that, since the Bruce loan payments did not fall within the range of prescribed investments, they were not authorised under the Financial Management Act. He went on to say that, for the Bruce Stadium loans to qualify within the range of prescribed investments, it was necessary to have in place a guideline pursuant to section 38(1)(e) of the Act which permitted an investment of that kind, and no such guideline had been made by the Treasurer.

He went on to say that Bruce Stadium could have been made a prescribed investment if an appropriate guideline existed at the time of the transactions, and if such a guideline had existed, Mr Tracey would have advised that the transactions were lawfully valid. In other words, Mr Speaker, the transactions were capable of being undertaken using the authority conferred on the Treasurer by section 38 of the Act, but a flaw in the process, that is, the failure to make the necessary investment guideline, rendered the transaction invalid. Therefore, although expenditure of money by government must be authorised by appropriation made to it by the Assembly, it is possible for the Government to make investments which do not require an Appropriation Act. I will say that again, Mr Speaker: Therefore, although expenditure of money by government must be authorised by appropriation made to it by the Assembly, it is possible for the Government to make investments which do not require an Appropriation Act. That is a key fact, Mr Speaker, which I will come back to later.

It was also discovered that many other transactions undertaken by the CFU were similarly affected. To rectify this problem, a guideline was made by me in terms which authorised investments such as Bruce Stadium and the other, more routine, transactions affected by this procedural flaw. This guideline was given retrospective effect, thus

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