Legislative Assembly for the ACT: 2004 Week 7 Hansard (1 July) . . Page.. 3102..
MR QUINLAN (continuing):
The bill not only contains improved governance and accountability arrangements but also addresses certain anomalies in the Territory Owned Corporations Act. The proposed improvements are consistent with the government's commitment to integrity in government processes and improved accountability.
Let me go first through the improvements to the governance and accountability arrangements addressed in the bill. Under the existing provisions of the act, there are two sets of principal objectives for territory owned corporations, one set for ACTEW and another set for all other territory owned corporations. ACTEW's objectives cover financial, social and environmental matters. However, the objectives of other territory owned corporations are related to financial matters only.
ACTEW's objectives are consistent with the concept of sustainability and the government's desire to introduce principles of sustainability in the use of resources. The bill proposes to extend the objectives applying to ACTEW to other territory owned corporations. This means that all territory owned corporations will be working towards a consistent set of objectives.
The government, as owner of the territory owned corporations and subsidiaries, has a legitimate right to access regular and timely financial and operational information, and other information, in order to review and monitor their performance. Currently, the Territory Owned Corporations Act provides for a territory owned corporation to give the voting shareholders information required by them. The bill expands on this requirement by clarifying the type of information the voting shareholders may require and the time period within which the information should be provided.
It is important that the territory owned corporations and subsidiaries do not inadvertently expose the government to unintended risk. It is for this reason that the Territory Owned Corporations Act in its current form prescribes certain transactions that require the written consent of the voting shareholders. The bill seeks to expand these transactions to include requiring an undertaking that could reasonably be expected to become a main undertaking and entering into, or making significant change to, a partnership, trust, unincorporated joint venture or other, similar, arrangement. Following on from this proposed amendment, it is also proposed that the portfolio minister inform the Assembly within 15 days of the consent given by the voting shareholders.
In the past there have been occasions where there has been uncertainty about the interpretation of the terms "main undertaking" and "significant". It is therefore proposed that the Territory Owned Corporations Act be amended to include provisions that will assist in the interpretation of these terms. It is proposed that the terms "main undertaking" and "significant assets and interests" be interpreted in accordance with the accounting standard, or materiality, or as identified in a public document such as the statement of corporate intent.
The government, as owners of territory owned corporations and subsidiaries, need to be kept informed of any internal or external events that may have a significant impact on the value of the business or operational performance of a territory owned corporation or subsidiary. The Territory Owned Corporations Act in its current form does not provide any guidance to directors in this regard.