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Legislative Assembly for the ACT: 1999 Week 7 Hansard (30 June) . . Page.. 1833 ..

MS TUCKER (continuing):

After losing that argument, the Chief Minister then said that this was just a technical breach; that it was nothing to worry about and could be easily fixed through the retrospective issuing of financial guidelines. However, I do not think the issue is as simple as that. The fact that the Under Treasurer sought a loan of $9.7m from the Commonwealth Bank, which was provided on 30 June 1998 and which was then repaid the next day but in a new financial year, is very strong evidence that someone in the Government knew that the overexpenditure was not allowed under the Financial Management Act and that something needed to be done to make sure that the books still balanced at the end of the financial year.

On the matter of financial guidelines, I will remind members that in the initial debate on the Financial Management Act the Greens did put an amendment which would have required that financial guidelines be disallowable. This was because we recognised the importance of such measures and therefore saw the need to have an accountable and open process for their development. Unfortunately, at that time we did not get support from either Labor or Liberal.

The actions of OFM were not just an isolated technical breach by public servants who were confused by the complexity of the Financial Management Act, as Mrs Carnell would have us believe. It seemed more like the first stage of a continuing attempt to get the Government out of an illegal financial mess. It was not the complexity of the Act that was the problem; it was the complexity of the stadium deal that the Government wanted pushed through.

The Government also said that everything was disclosed in the financial statements that were reviewed by the Auditor-General and the Chief Minister's Committee, with the implication that if the information was publicly available then it must be legal. However, she neglected to mention that the Auditor-General was not that happy with the arrangement and was seeking further legal advice from the Government Solicitor, which is very long in coming and which was subsequently overtaken by the Government seeking its own advice.

Then the Government used the line that payments by the Central Financing Unit to the Bruce redevelopment did not need an appropriation because they were really an investment. However, they glossed over a very important issue. Firstly, there were no financial guidelines in place at the time that prescribed this type of investment. Secondly, even if there were guidelines in place, it would be very hard to justify that this expenditure was in any real sense an investment. Section 38 of the Financial Management Act, which covers investment, gives the clear impression that this section is about investing money which is surplus to the immediate requirements of government in a financial institution as a short-term measure. It is not about the transfer of money from one part of government to another for the purpose of paying for capital works. The Auditor-General also raised the point in estimates about whether this so-called investment conforms to the accepted accounting definition of an investment. It is also interesting to note that no interest was ever paid on the supposed investment.

The Government, however, persevered with the line that all it needed to do was to respectively apply new financial guidelines to call the unappropriated money an investment. However, the two non-government legal opinions were quite clear that the Treasurer did not have the power to make retrospective guidelines under the Financial

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