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Legislative Assembly for the ACT: 1999 Week 7 Hansard (2 July) . . Page.. 2145 ..
MS CARNELL (continuing):
which should enable more informed decision making on financial strategies and public resource allocation as well as enhancing accountability.'
The report shows that we have been successful in halving the operating loss from $344m in 1995-96 to $170m in 1997-98 and continue to improve our result as shown in the 1999-2000 budget papers where we are forecasting to achieve an operating surplus by 2000-01. The Auditor-General notes that 'when assessed over a sequence of years the operating result is an important indicator of the financial sustainability of the government's strategies and policies'.
In the face of significant cuts in funding from the Commonwealth we have kept borrowings to a minimal level and maintained the ACT's AAA credit rating.
Mr Speaker, the Government Response to Report No. 14 addresses three issues raised by the Standing Committee:
� The first being, our treatment of depreciation under accrual accounting:
Our treatment of depreciation conforms with the relevant Australian Accounting Standards. The cost of maintaining or replacing the community's assets has been taken into account and it is very important not to underestimate or ignore this cost. The ACT's financial statements would be subject to audit qualification if depreciation principles were not properly applied.
� The second issue raised by the committee is a question as to whether accrual accounting precepts, which are appropriate to the private sector in terms of taxation and retained profits are relevant to the activities of government:
The payment of taxation, or its equivalent, by our government's agencies is part of the disclosure of the full cost of their activities. Competition policy also requires that competition between private and public sectors be conducted on a level playing field.
The third issue is the statement by the committee that alternatives to Asset Sales were not given:
I would like to draw the committee's attention to the fact that the government's alternatives to Asset Sales are included in the Auditor-General's report in the appendix on page 53 which were:
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