Page 2587 - Week 09 - Wednesday, 24 August 1994
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Amendment agreed to.
Bill, as a whole, as amended, agreed to.
Bill, as amended, agreed to.
GOVERNMENT CONTRACTUAL DEBTS (INTEREST) BILL 1994
Debate resumed from 20 April 1994, on motion by Mr Humphries:
That this Bill be agreed to in principle.
MS FOLLETT (Chief Minister and Treasurer) (12.01): The Government is not able to support Mr Humphries's Bill, which concerns government contractual debts, although Mr Humphries has raised a concern which is certainly shared by the Government. What we have done is to take a different tack in addressing that concern. The concern that both Mr Humphries and the Government are seeking to address is the effect that late payments of debts have on our local community. As I am sure Mr Humphries knows, Treasury direction 8.9 requires that claims be processed to ensure that cheques are issued two days before the due date, which is 28 days after the receipt of the goods or service and a properly rendered invoice, or otherwise, in accordance with any contract that has been entered into. Accordingly, Mr Humphries's Bill addresses a matter that is covered by existing legislation. Indeed, it is this requirement that has significantly contributed to the Government's performance in this area. Mr Humphries himself conceded that, in fact, the ACT Government may have a better record than other Australian governments on this matter of payment of debts.
The inclusion of an interest penalty in Mr Humphries's Bill does appear to be a side issue, in that it is the threat of penalty rather than the penalty itself which Mr Humphries hopes will assist in this area. Mr Humphries, in speaking to his Bill, referred to a number of alleged cases of late payment; but he cited only one specific example. I do not believe that legislating for one example is legitimate. The reference that he made to outstanding claims held by ACT Health related to the period before Health was transferred to the public account and its administrative independence was repealed. This transfer, which occurred from the start of 1993-94, actually brought Health under the scope of Treasury direction 8.9. So there is legislation which applies also in that case.
Mr Humphries made a comparison between government's payment to business and Territory taxation, which in some instances provides penalties for late payment; but I do believe that a more appropriate comparison would be where the Territory is owed money by local business in a normal commercial situation - and that occurs. In this case, the Territory is also open to late payment, and in some cases to non-payment. In contrast, while very rarely the Territory may make a late payment, you can be absolutely certain that all of the Territory's accounts are paid, unlike the reverse situation.
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