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Legislative Assembly for the ACT: 1999 Week 7 Hansard (30 June) . . Page.. 1817 ..

MR HARGREAVES (continuing):

Such is not the case with the current situation of breaches of the Financial Management Act in the expenditure without parliamentary approval, the repayment of the loan, nor the issue of guidelines to retrospectively fix illegal actions. We know about these issues. To let them lie would be to ignore the seriousness of them. We must consider them now.

The Financial Management Act, unlike its predecessor, contains no sanctions. It is thus incumbent upon us in this Assembly to decide whether an act has been perpetrated illegally, and then, if proven, to decide on the fate of the perpetrator. The only course of action open to us is to seek the resignation of the responsible party.

Let us turn to the proof required by Mr Rugendyke. This proof must be beyond reasonable doubt. The Government commissioned Mr Tracey, QC, to advise on the illegalities. He found, and I quote:

He quoted the Auckland Harbour Board case, as did the other two legal advisers, saying that the Privy Council - in those days a higher court even than the High Court - found that "any payment made out of the Consolidated Fund without parliamentary authority is simply illegal and ultra vires and may be recovered by the Government". The Government's own adviser has found that payments were made illegally. He underscored the illegality by saying, and again I quote, "In the absence of an appropriation, the payments by the Unit" - that is, the Central Financing Unit - "to the departments and the subsequent expenditure of the same funds by departments was, in my opinion, unlawful". I will repeat that in case people think he did not say that there was something illegal. He said the subsequent expenditure of the same funds by the departments was, in his opinion, unlawful. This is pretty clear, Mr Deputy Speaker.

Ms Carnell: Then he goes on to say that if the guidelines had been issued it was legal.

MR HARGREAVES: Do you want me to keep going? Mr Tracey also found that the repayments of the loan were illegal because there had been no delegation to sign warrants under section 37 of the Financial Management Act. As for the original expenditure, there was no appropriation for the loan repayment. The second illegality has been highlighted, again by the Government's own adviser.

Both Mr Sackar, QC, and Professor Richardson agree with Mr Tracey. Mr Sackar found that the payment of the $9.7m in expenditure was unlawful as there was no valid appropriation of those funds. He also found that the obtaining of the loan, "daylight accommodation", was unlawful. He further found that the issue of retrospective guidelines was unlawful because it was an improper abuse by the ACT Treasurer of the guideline-making power. It is noteworthy that Mr Sackar felt the seriousness of such illegality was such that the papers should be referred to the DPP. So here we have two QCs agreeing that at best there were two illegal acts. Mr Tracey felt that the guidelines could retrospectively fix the illegalities, but Mr Sackar felt that the guidelines were in themselves illegal.

Enter the emeritus Professor of Law, Professor Richardson, SC, at Mr Osborne's request. Professor Richardson found, and I quote:

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