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Legislative Assembly for the ACT: 1995 Week 11 Hansard (14 December) . . Page.. 3052 ..

MRS CARNELL (continuing):

Major components of new legislation, in particular, new financial management and Auditor-General legislation, are explained. I should emphasise that these are for the purpose of outlining the Government's intentions. They provide a basis for discussion. They reflect the Government's commitment to broad and effective consultation with the Assembly and the wider community. They do not represent final legislative proposals. The paper will provide an opportunity for all interested parties to examine the principles prior to final decisions being made.

Whilst this proposed legislation is about financial management, I must also emphasise that improved financial management is not an end in itself. The objective is high-quality, more cost-effective services. These proposals are therefore directed towards improvements in the quality and delivery of services to the community. The existing Audit Act 1989 has a large number of shortcomings which have been recognised over a long period of time. It is not based on contemporary principles of effective financial management; it does not readily facilitate public accountability; it contains numerous provisions which are out of date; and it is repetitive and obscure. Since self-government, repeal of the Act and its replacement with more modern and relevant legislation has been recognised as a high priority, but the previous Government failed to act.

Current arrangements are clearly inadequate. They limit the role of the Assembly and the executive government to controlling and oversighting the cash component only of public sector resources. The Assembly is, however, fully accountable to the community for all public resources. Hence, with the current cash-based system which we inherited, the Assembly cannot do its job properly.

The main objectives of the proposed new laws are recognition of the primacy of the Assembly's role in the parliamentary budget process, and enhanced and better focused accountability to the Assembly and to the community. The proposals will promote greater transparency in budget decision-making at all levels - the Assembly, the Executive and the public service. The reforms also have the objective of improved public sector management. The reforms will place constraints on government only in the sense of requiring increased disclosure. Limitation of the oversight of parliaments to cash only resources of the public sector is an unacceptable limitation on the role of the legislature. It also limits the right of the community to be informed of the financial position of elected governments. Present arrangements focus attention on compliance with cash controls. This can be at the expense of other significant indicators of acceptable financial management.

The reform proposals place at least equal weight on the quality, quantity and timeliness of services funded by appropriations. A major objective of the reforms is to improve the quality of public sector management and accountability. A prerequisite of this is improvement in the quality and relevance of management information. Under reformed arrangements, the receipt of funding from government will be conditional on the provision of adequately defined and described outputs. The Government's interests will be made more explicit in terms of two clear roles. Firstly, as a purchaser of services, in which the Government has an interest in the quality, quantity, timeliness and place of provision of those services; and, secondly, as owner of the entity providing the service. In this respect the Government has an interest in the ongoing capacity of the agency to deliver services. This includes its longer-term viability and financial position.

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