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Legislative Assembly for the ACT: 2001 Week 8 Hansard (9 August) . . Page.. 2631 ..

MR HUMPHRIES (continuing):

The first stage of this review has focussed on technical amendments to the Act required to eliminate ambiguities and avoid technical breaches of the Act. The second stage of the review is focussing on issues that have greater policy implications or complexity and will address some of the more fundamental issues:

It is amendments dealing with the initial stage of the review that I am tabling here today in the Financial Management Amendment Bill 2001 (No 3).

Mr Speaker, I again emphasise that the amendments set out in this Bill are largely technical in nature. The amendments will eliminate inconsistencies and ambiguities, refine definitions and terminology and allow for the improvement of financial management practices and processes.

Mr Speaker I now wish to turn to the major provisions of this Bill.

Mr Speaker, this Bill proposes a number of amendments in relation to the borrowing and investment activities of Territory authorities. These amendments will strengthen the financial management of Territory funds and remove a number of inconsistencies within the Financial Management Act.

The Financial Management Act provides that Territory authorities may only borrow money with the approval of the Treasurer. In the interest of providing full and transparent accountability it is also considered appropriate that where the Territory lends money to a Territory authority such transactions require appropriation and warrant. The Financial Management Act is, however, currently unclear on this matter.

Mr Speaker, amendments provided for in this Bill will clarify that the Territory may only lend money to a Territory authority where funds for such a transaction have been appropriated and approved by warrant. This will ensure that the Assembly will be able to consider the merits of such a loan before it is issued.

I am also proposing to amend the financial management guidelines to provide`that loans to Territory authorities are no longer prescribed as an investment under paragraph 38 (1) (e) of the Financial Management Act.

Mr Speaker, I repeat that these proposed amendments to the Financial Management Act and the financial management guidelines will provide a greater level of scrutiny by the Assembly in the event that Government decides to issue a loan to a Territory authority.

Mr Speaker, the definition of public Money in section 3 of the Financial Management Act provides that all money received by the Territory is public money. The definition, however, excludes money received by a Territory authority. This is consistent with the principle that Territory authorities operate at arm's length with the Government.

The Finance and Investment Group invests funds on behalf of several Territory authorities. Funds are therefore transferred from Territory authority bank accounts to the Territory Banking Account for the purpose of investment. The current defnition of public money requires clarification that such funds received for investment remain outside the definition of public money. These amendments will provide for such clarification.

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