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Legislative Assembly for the ACT: 2002 Week 1 Hansard (12 December) . . Page.. 159 ..

MR QUINLAN (continuing):

This is a particularly disappointing situation, given the comments of the shadow Treasurer, Mr Humphries, that he believed that there was no reason why the ACT should ever find itself in deficit again. Given that Mr Humphries was, I presume, briefed up until the new government was sworn in, I can only assume that he did not understand the information that was presented to him.

In any case, the immediate implication is obvious. The inevitable trade-off between offering further service delivery versus fiscal positioning will become more difficult. The government stands ready to honour its commitments. The point being made is that this government will not experience the degree of revenue strength that the previous administration used to fund discretionary expenditure.

Mr Speaker, over the next few weeks, the government will study the extent and nature of the territory's projected deficit. To assist in this task, I intend to establish a commission of audit. Detailed terms of reference are being drafted and two broad areas are being considered.

The first is the state of the territory's finances prior to the October election. The following will be reviewed: the financial results and position as at the end of October 2001; the most likely full year financial results and position for 2001-02; and coverage in the forward estimates of known and probable significant events likely to impact on the budget, for example, wage increases for nurses and the social and community services award flow-on.

Also requiring review is the degree of exposure of the territory to any significant financial risks from the operation of its business entities; in particular, the business outlook for Actew and ActewAGL, with particular regard to the likely rate of return for Actew's investment in TransACT.

Mr Speaker, the need for a commission of audit, with a wide-ranging charter, would have been considerably lessened, or possibly put aside, if the previous government had insisted upon clearer and consistent standards for financial reporting. This government in its term will introduce a charter of financial integrity in order to strengthen its accountability requirements to both the Legislative Assembly and the ACT community.

The charter's purpose will be to improve financial policy outcomes. It will require the government to base its financial strategy on principles of sound financial management and to facilitate public scrutiny of financial policy and performance. The charter will also strengthen and consolidate the ACT's current financial framework and improve transparency and accountability mechanisms.

The government will formalise the charter with the introduction of amendments to the Financial Management Act. These will be supported by a broad policy document that outlines the guiding principle of the charter and the government's reporting requirements.

The government has now introduced a second appropriation bill during this sitting period. A bill would have been introduced by the previous government to obtain spending approval for commitments made over the past few months. As we did agree

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