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Legislative Assembly for the ACT: 1996 Week 4 Hansard (18 April) . . Page.. 1038 ..

MRS CARNELL (continuing):

Accrual reporting alone is a significant advance. It ensures disclosure of assets and liabilities. It identifies the full cost of services and full revenues rather than just cash payments and receipts. The real value of this disclosure will not be achieved unless budget estimates are also developed and presented on a consistent basis. This will ensure that government planning and management decision-making take full account of all costs of services provided. It will ensure that the Assembly and the community are aware of how efficiently and effectively public resources are being used. Importantly, it will provide a more meaningful and objective basis on which to discriminate between good and poor financial management. For too long public sector managers have not had adequate financial information on which to base management decisions. The reforms to budgeting and reporting embodied in this Bill will place much greater emphasis on how well public sector assets and liabilities are managed. The reforms will enable a greater focus on maintenance of our buildings, infrastructure and community assets.

Mr Speaker, the Bill embodies other important reforms and continues those aspects of the Audit Act 1989 that remain relevant and important. I would like to touch on just a few of these aspects. For the first time, the Bill formalises the process of settling the budget of the Legislative Assembly. It recognises the Assembly's independence from the Executive and the desirability of formal consultation. The Assembly is not bound by the Bill to observe requirements for performance measures applying to its own functions. I trust, however, that the Assembly will elect to disclose this information in the interest of public accountability.

The Bill simplifies the accounting structures applying within the ACT public sector. The multiplicity of trust accounts will no longer be needed. Trusts will be restricted to genuine trust moneys. The Bill will facilitate more efficient cash management. It will enable the Territory's borrowing requirements to be more closely aligned to its real cash deficit. It will enable maximum benefit from investment of cash balances. Previous arrangements placed significant impediments in the way of efficient cash management.

The Bill incorporates the concept of net appropriations. This will enable greater flexibility in meeting the demands where sufficient revenue is generated to cover costs. The Bill discontinues the provision in the current Audit Act which enables the Treasurer's Advance to be increased through actions of the Executive. The Bill will not allow transfers from capital to recurrent purposes after the budget is brought down. The Bill introduces additional disclosure requirements for variations to estimates below the appropriation level. The Bill continues the standing appropriation included in the Audit Act 1989 to meet borrowing expenses. As at present, estimates of borrowing expenses will continue to be included in the annual budget and appropriations. This provision is, however, of more than symbolic significance. It recognises the Territory's obligation to meet its external debts.

The Bill sets out the financial responsibilities of chief executives. This includes responsibility to observe appropriation limits. The Bill also requires chief executives to comply with accrual budgets, considered by the Assembly when it authorises an Appropriation Act. These measures in no way reduce the overriding responsibilities of Ministers. They make explicit responsibilities which are implicit under the current Audit Act. The measures reinforce the concept that departmental appropriation

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