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Legislative Assembly for the ACT: 2002 Week 9 Hansard (21 August) . . Page.. 2646 ..

MR QUINLAN (continuing):

It is with this challenge in mind that the Department of Treasury is conducting a review of the Financial Management Act. The previous Assembly passed a number of amendments flowing from the first part of this review last year. These amendments focused on technical amendments to the act required to eliminate ambiguities and avoid technical breaches of the act.

Today, with the Financial Management Amendment Bill, I am tabling amendments dealing with the next part of the review. This second part of the review focused on a number of issues that had greater policy implications or complexity. The amendments for which this bill provides will achieve a number of goals. The proposed amendments will clarify the responsibilities of the chief executive in relation to the financial targets they are required to achieve, allow performance criteria to be varied under particular circumstances, and allow Commonwealth payments for specific purposes to be efficiently passed on to departments.

The proposed amendments will also remove redundant requirements within the act, particularly the need for warrants and the ability, under certain circumstances, to make payments in advance of appropriation.

Finally, the proposed amendments will further strengthen financial management accountability by requiring the reporting of particular information in the case of waivers of appropriated loans, allowing the executive to direct the transfer of monies from various banking accounts, and providing for the earlier completion of the territory's audited annual financial statements.

I would now like to deal with the detail of the major amendments provided for in this bill. Section 31 of the act provides that the chief executives are responsible for ensuring that the operations of a department give a financial result that is in accordance with the estimates contained in the budget papers. The budget papers, however, contain a range of financial results that may be applied to the operations of each department. Section 31 has therefore been criticised as being ambiguous.

To help address this issue, the budget papers will, in future, clearly specify which key financial targets the chief executive is responsible for achieving. This initiative was, in fact, introduced in the budget papers tabled in the Assembly on 25 May 2002. This will now be supported by amendments to section 31 of the act-and, if I might adlib, there is, I think, constructive comment in the Estimates Committee report in this area.

To ensure that these key financial targets remain relevant-where, for example, a department's appropriations have been adjusted during the year due to administrative arrangements orders-the amendments will allow the Treasurer to amend, by instrument, these key financial targets. Further, so that appropriate and timely accountability is maintained, these amendments also provide that an instrument varying these key financial targets will be a notifiable instrument and will therefore be available on the ACT Legislation Register.

The act contains several provisions that allow for appropriations to a department to be varied or transferred between either departments or output classes. The act, however, contains no provision to allow the performance criteria for the delivery of outputs to also be varied to reflect those changes in appropriations. Departments may also need to vary

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