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Legislative Assembly for the ACT: 1993 Week 06 Hansard (Thursday, 20 May 1993) . . Page.. 1686 ..


LEAVE OF ABSENCE TO MEMBER

Motion (by Mr Humphries) agreed to:

That leave of absence from 21 May 1993 to 3 June 1993 inclusive be given to Mrs Carnell.

BUDGETARY ALLOCATIONS AND SPENDING POLICY
Discussion of Matter of Public Importance

MADAM SPEAKER: I have received a letter from Mr Stevenson proposing that a matter of public importance be submitted to the Assembly for discussion, namely:

The potential improvements that can be made to budgetary allocations and spending policy.

MR STEVENSON (3.37): I raise this matter of public importance to highlight a problem in the use of taxpayers' funds that I believe can be solved. First of all, I would like to identify a couple of the problems specifically to do with the fact that departments cannot carry over any appreciable amount of their budget to the following year. I think it raises the wrong principle when there is a limit of 3 per cent on budget carryover. Even that amount is not available for staff allocation, staff funding. The major problem is that it rewards ineffective principles and penalises those who would do well in their budgetary design.

Let me give a couple of examples as to why people are encouraged, first, to spend all their budget and then perhaps to spend even a little bit more. If you save money on a budget you can reach a situation where, when there are budgetary cuts because of hard times, you get no benefit from having saved money previously. I give one example in the ACT. Without specifying particular amounts or departments, let us say that half a million dollars is saved by a department through very effective planning. What happens is that in the following year they get no extra allowance for that half a million dollars. Their budget is reduced by that amount because they saved that through their future budgetary practice. Not only that; in the ACT they have to save an extra 2 per cent of their overall budget.

There are some examples around Australia. I give as an example one department at the moment with a $2,000m budget. Ninety per cent of the year has gone but they have spent only about 70 per cent of their budget. At the moment there are meetings being held and there is a mad flurry of activity as they wonder what they can spend all the money on. I think we all understand that this time of the year is the ideal time to push forward your pet project, a project that might not get funds allocated at any other time of the year. When there is money that needs to be spent you put forward your pet idea and it is far more likely to get approval. I am not suggesting that people would necessarily throw money away, although such things have happened. What I am suggesting is that it does not encourage the effective use of taxpayers' funds.


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