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Legislative Assembly for the ACT: 2011 Week 14 Hansard (6 December) . . Page.. 5652..

Public Accounts—Standing Committee

Report 20

MR SMYTH (Brindabella) (10.05): I present the following report:

Public Accounts—Standing Committee—Report 20—Inquiry into the exposure draft of the Financial Management (Ethical Investment) Legislation Amendment Bill 2010, dated 1 December 2011, including a dissenting report (Ms Le Couteur), together with a copy of the extracts of the relevant minutes of proceedings.

I move:

That the report be noted.

I am pleased to present the report of the public accounts committee's inquiry into the exposure draft of the Financial Management (Ethical Investment) Legislation Amendment Bill 2010. I note that the committee made a statement to the Assembly on 28 October 2010, setting out how it had determined to undertake this inquiry. In that statement, the chair of the public accounts committee told the Legislative Assembly that, to avoid any possible perception of a conflict of interest, the chair had offered to relinquish this role for the purposes of this inquiry and that I, as the then deputy chair, had agreed to chair that inquiry. Subsequently, after the election of a new deputy chair of the public accounts committee on 5 August 2011, the chair of the committee made a further statement to the Assembly, on 17 August 2011, and, by leave, moved a motion that the Assembly approve that I continue as the chair for the inquiry. The Assembly agreed to the motion.

I now turn to the committee's inquiry into this exposure draft. The proposed bill would amend the Financial Management Act 1996 and the Territory Superannuation Provision Protection Act 2000 to provide for ethical investment strategies that promote socially responsible investment. The main objectives of the bill are to prescribe the standards and priorities for the investment of public funds by the ACT government. The bill, even if it is only partially implemented, will signal a significant change to the ACT's current investment practices. The committee's inquiry was therefore an important opportunity to consider the proposed bill in the context of the territory's investment framework and management of the investment portfolio.

The most fundamental issue faced by the committee has been about the word "ethical"and the use of the word. The committee has determined that it is not possible to legislate for something to be ethical. Ethics are an individual response to model issues. Consequently, it is not feasible for any legislation to define an ethical position for a community. Indeed, the committee notes that there is no definition of "ethical"in the bill, perhaps because it is so hard to define.

It is self-evident, therefore, that it is not possible to provide a definition of "ethical"in such a bill, because of the partisan nature of what is meant by "ethical". The significant concern that is raised by the inability to define "ethics"or "ethical"is that

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