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Legislative Assembly for the ACT: 1999 Week 7 Hansard (30 June) . . Page.. 1785 ..

MS CARNELL (continuing):

filling the crucial procedural gap identified by Mr Tracey. After this guideline was made, Mr Tracey was asked to advise on its effect on the validity of the Bruce transactions. He concluded that the retrospective guideline rendered the transactions lawful. Mr Speaker, once the guideline was issued, Mr Tracey, QC, concluded that the retrospective guideline rendered the transactions lawful.

The Government was advised that such a guideline could be made to have retrospective effect by no less an authority than the Parliamentary Counsel for the ACT. Yes, Mr Speaker, the Parliamentary Counsel that everyone in this house relies on for advice on just about every piece of legislation that goes before this place. Mr Speaker, a formal written opinion on the subject was prepared by the Parliamentary Counsel, and that opinion was released for public information. The Parliamentary Counsel's opinion on this aspect was accepted by Mr Tracey, who is an eminent practitioner in administrative law. Apart from the legal basis for the retrospective guideline, the desirability of rectifying in this way the procedural flaws identified by Mr Tracey also needs to be understood. Whilst many of the transactions entered into by the CFU since the Financial Management Act commenced have been concluded, there are a number that are still active.

Since Mr Tracey's opinion was publicly released, it has been claimed by the Labor Party that the Bruce development is incapable of being an investment, another issue that Mr Stanhope raised earlier. For the benefit of the Assembly, let me explain why it is simply wrong. In the Financial Management Act, the word "investment" has a plain and ordinary meaning. It does not have a technical or restricted meaning. The ACT acquired a lease in relation to Bruce Stadium and, through the redevelopment, is restructuring the facilities on the lease. These improvements will materially affect the use to which the stadium can be put. In turn, this is expected to generate a commercial return to the ACT over time.

The redevelopment is characterised as an investment for two reasons. Firstly, the redevelopment constitutes an investment as an improvement in real property for the purpose of securing a monetary return on the money invested, obtaining rental profit, permitting a subsequent sale or obtaining a capital appreciation on the property. No doubt those things occur, Mr Speaker. Secondly, the transactions underlying the redevelopment constitute an investment as an internal loan undertaken for the purpose of obtaining interest revenue in relation to the improvement in the real property.

These purposes are entirely consistent with the documents generated at the time by the officers of the Central Financing Unit, which clearly describe the transactions as loans. Mr Speaker, earlier Mr Stanhope said that there was no indication at all that the Government had thought about this as an investment until recently. Mr Speaker, as you can see, the documents generated at the time by the officers of the Central Financing Unit clearly describe the transactions as loans. At the time of establishing the loan from the Central Financing Unit to the Bruce Redevelopment Authority, it was clearly an investment, Mr Speaker, and still is. In summary, what the Government did was perfectly legitimate under section 38 of the Financial Management Act, but for the fact that a guideline was not issued - a technical flaw, Mr Speaker.

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