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Legislative Assembly for the ACT: 2003 Week 13 Hansard (26 November) . . Page.. 4638 ..

MS DUNDAS (continuing):

A departmental email obtained by the Public Accounts Committee through freedom of information laws showed that cabinet and public servants desperately looked for something, almost anything, on which to spend the Treasurer's Advance to avoid its going back to consolidated revenue.

In the infamous instance of the $10 million authorised for expenditure on fire safety upgrades in the 2001-02 financial year not a penny was spent on the authorised purpose inside that financial year. Less than $220,000 was spent by 31 October 2002 and only $2 million of the $10 million was spent by July 2003. I understand that even now, two years later, the full amount of money allocated for urgent fire safety upgrades has yet to be expended.

I believe that this practice makes a mockery of the budget process. It goes against the spirit of accountability underpinning the requirement to present appropriation bills to the Assembly for approval. The bill I have tabled today seeks to put an end to the use of the Treasurer's Advance in this unaccountable way.

Although the Treasurer's Advance cannot exceed 1 per cent of the total moneys appropriated by all appropriation acts, this amount is very significant in light of the fact that the overwhelming majority of budget funds are non-discretionary, as they are required to meet fixed costs such as salaries of public sector workers. In this context, almost $21 million is a lot of money and it could be used in lots of different ways. I know that there are members of the community who would willingly put up their hand to expend $21 million in any given year.

As I have said, my amendment requires that the advance may be used only where there is an urgent and unavoidable need to meet an expense inside a financial year and there is no time to prepare and pass a supplementary appropriation bill. If any money from the advance remains unspent at the end of that financial year because it has not been handed over as wages, to contractors or for a capital item, I believe that it must be repaid to the territory banking account so it can be reallocated in the next budget.

My proposed section 18 (1A) (b) brings section 18 of the Financial Management Act closer to a previous version of this section. The previous version was considered in Auditor-General's Report No 11 of 2001 at pages 26 to 30, in discussing potential breaches of the Financial Management Act. Following criticism by the Auditor-General, this government moved an amendment to give itself more flexibility in the use of the advance, rather than taking more care to comply with the act.

The government overcame the problem of establishing whether expenditure could reasonably have been foreseen at the time of passing of any appropriation act by changing the wording of section 18 so that it was only required that the expenditure was not reasonably foreseen at the time of the first appropriation act. Even the government's budget papers tried to downplay the circumstances in which the Treasurer's Advance could be utilised by stating in the glossary that Treasurer's Advance funds were available for expenditure in access of specific appropriations or not specifically provided for by existing appropriations, not mentioning unforeseen or urgent need at all.

My amendments clarify who it is who must have responsibility for knowing what the Treasurer's Advance will be spent on had been reasonably unforeseen at the time the

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