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Legislative Assembly for the ACT: 2002 Week 1 Hansard (11 December) . . Page.. 93 ..

MR QUINLAN (continuing):

In such cases amendments to this bill provide that supplementary budget papers must state reasons why the fully revised budget statement from the department is not included and that the Treasurer must present the revised budgeted statement to the Assembly as soon as practicable. The result of these changes is that the level of accountability to the Legislative Assembly will be improved through the clearer specification of the act of what information is to be provided in supplementary budget papers.

This bill also provides for amendment to section 18 of the act. Section 18 deals with the use of the Treasurer's Advance. These amendments will address a weakness in the act that has resulted in the Auditor-General commenting on a possible breach of the act by the previous government. Currently, section 18 of the act provides for 1 per cent of the amount appropriated by all appropriation acts for the year to be appropriated for the purpose of the Treasurer's Advance. Section 18 further allows the Treasurer to authorise expenditure against this appropriation where the need for the appropriation could not reasonably have been foreseen at the time of the passing of any appropriation act. Application of the 'foreseen' requirement to the passing of an appropriation act, including supplementary appropriation acts, may hinder the efficient use of the Treasurer's Advance.

The application of good financial management practice requires agencies to manage budgets to annual appropriation limits. Wherever possible, approval to commit expenditure against the Treasurer's Advance is not granted until as late as is possible in the financial year, with the aim of encouraging agencies to manage funding pressures from within their current budgets and therefore reduce the final call on the Treasurer's Advance.

In practice, this has the effect that possible calls on the Treasurer's Advance may be known at the time of the supplementary appropriation bill but are not included in that appropriation bill as savings, or reprioritisation may be possible to fund the cost pressures from within existing budget limits.

Legal advice from the Government Solicitor has indicated that subsequent use of the Treasurer's Advance, where the need for that expenditure was known at the time of the tabling of a supplementary appropriation bill, may breach the provisions of section 18 of the act.

The current provisions of section 18 may therefore require that all known possible calls on the Treasurer's Advance be included in any supplementary appropriation bill introduced into the Assembly. This unnecessarily limits the government's flexibility in issuing a Treasurer's Advance to fund cost pressures during the course of the financial year and may promote inefficient budget management practices in relation to the funding of claims against the Treasurer's Advance.

Amendments proposed in this bill will provide that the Treasurer may authorise expenditure from the Treasurer's Advance, provided the need for that expenditure could not have been reasonably foreseen at the time of the presentation of the first appropriation act.

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