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Legislative Assembly for the ACT: 2004 Week 06 Hansard (Thursday, 24 June 2004) . . Page.. 2634 ..

appropriation bills. I welcome that move from the government but I would prefer to see this new culture backed by a legislative direction, so that it remains in the future.

Second, my bill would seek to clarify who it is who must not have reasonably foreseen the need for the expenditure item before the Treasurer’s advance can be used. Previous legal advice on this issue has indicated that the condition is not clear and, to be more effective, the condition needs to specify who is responsible for foreseeing the expenditure. It is currently unclear whether the need for expenditure must have been not reasonably foreseeable by the Treasurer, officers of Treasury or officers of the agency requesting the funds. The Auditor-General raised this issue specifically with the Public Accounts Committee.

The government bill uses the word “unforeseen” but replicates the shortcomings of the existing Financial Management Act because it does not clarify who must not have foreseen the need for the expenditure. My proposal would make it clear that, if the Treasurer, the chief executive of the appropriate department or the chief executive officer of the authority, or any minister, had knowledge of the need to meet the expense and knew this prior to the date of presentation of the last appropriation bill, the Treasurer’s advance should not be used. If any one of these people knew of the need for spending on this item in the current financial year before the tabling of the last appropriation bill, they obviously had an opportunity to get that item into the appropriation bill through the cabinet process.

Third, under my proposals, if any money from the advance remains unspent at the end of the financial year because it has not been handed over as wages, to contractors or for a capital item, it should be repaid to the territory’s bank account so that it can be reallocated in the next budget. The government’s proposal is not explicit on this particular issue, so it seems to me that unspent money can simply be rolled over and disappear from view, as is currently the case. It is challenging to keep track of unspent initiatives money, and knowing that unspent Treasurer’s advance will be returned to the territory’s bank account for reappropriation would provide more peace of mind and accountability.

The Treasurer’s tabling speech suggested that the Treasurer’s advance will only be used when payments must be made or firm commitments have been entered into. However, this is not clearly expressed in the government’s bill. I hope we will not see any loopholes being used here, and that we will see the Treasurer’s advance being used when we know that payments have to be made and commitments have to be met.

Finally, I would like to discuss the government’s decision to allow the Treasurer’s advance to be drawn on if a contractual commitment is entered into but a payment is not required before the end of the financial year, or before the passage of a subsequent appropriation bill. Contract law permits a contract to be broken with payment of only enough money to put the wronged party back into the position they were in before the contract was entered into. This can be a very small sum of money if a contract is terminated at an early stage.

By only allowing the TA to be used when an actual payment had to be made, my proposal would require the government to ask for an appropriation to cover a contract that has been entered into, but has not yet required any payments. I am thinking of a

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