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Legislative Assembly for the ACT: 2003 Week 11 Hansard (21 October) . . Page.. 3819 ..

MR STEFANIAK (continuing):

updates; and professional reviews by the Auditor-General of the integrity of economic assumptions and estimated financial statements incorporated in the budget.

A reading of the government's bill establishes that the first five components appear to have been picked up, at least in part. For reasons that are not apparent, the component that the Victorian Treasurer described as being the most significant component in that package, was ignored by this government, that is, the requirement for a professional and independent review of budget assumptions and methodology. Why is that so? Why did this government and this Treasurer leave out of the package the key element of those proposals for enhancing the financial framework in the ACT? It is disappointing that the Treasurer did not deem it necessary to incorporate in this bill the requirement for an independent review of budgetary matters.

On virtually every other count this bill contains many valuable provisions that will enhance the territory's financial framework. The bill contains a mix of provisions, some of which mandate actions that are currently being undertaken in any event-which is probably a good thing, given that those actions perform a useful function-and some new matters, such as requiring a mid-year budget review with a report to be published by mid-February, and requiring a pre-election budget update.

I note that those amendments appear to parallel amendments that were introduced in Victoria in 2000. As I said earlier, the bill does not include a provision for an independent report on the assumptions and methodology underlying the annual budget.

As a consequence, I foreshadow that I will be moving two amendments that will insert such a provision in the Financial Management Act. The first procedural amendment will require the report that is to be prepared by the Auditor-General to become part of the documents tabled by the Treasurer at the time of the annual budget. The second substantive amendment sets out the parameters under which the Auditor-General will work when preparing independent reports on various aspects of the annual budget. I will refer later to those amendments in the detail stage.

Suffice it for me to say that my proposed amendments are not necessarily intended to increase the workload of any people or organisations involved in the preparation of the budget; rather, they will impose an additional requirement only when the Auditor-General cannot find certain information or he is unable to confirm the basis and use of assumptions when developing budget estimates and forecasts. It is pertinent at this point to consider the public financial management experience of the Victorian government and the innovation in that state.

I am most encouraged to learn that, after some initial scepticism in the bureaucracy about the nature of the additional processes involved, the Victorian experience appears to have been extremely positive. A number of benefits have become apparent, in particular in respect of enhancing the rigour with which assumptions underlying budget estimates have been applied and in evaluating the methodologies being used to determine whether assumptions are appropriate. I think it would be appropriate to characterise this improvement as a process of continuous improvement in the budget preparation processes in Australian jurisdictions.

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