Legislative Assembly for the ACT: 2003 Week 10 Hansard (25 September) . . Page.. 3678 ..
MR SMYTH (continuing):
the extent of information that was published about the activities of entities in which each of these agencies had a close involvement.
In the case of Actew, the auditor was concerned that Actew had not accounted for its interest in TransACT using the equity method rather than the cost basis that was used by the board of Actew. The auditor concluded that Actew should have used the equity method because Actew had significant influence over the activities of TransACT. A major reason for this was that at 30 June 2002 Actew held just less than 25 per cent of the TransACT voting shareholder votes.
The significant implication flowing from the use of this accounting method would have been that Actew would have had to take into account a share of TransACT's losses and this of course would have had a direct impact on Actew's financial result, leading to a reduced dividend flowing from Actew to the ACT government. Irrespective of the consequences of adopting particular accounting methods, the committee agrees with the auditor that Actew should report to the community on the basis of reflecting the reality of commercial relationships.
The situation with Totalcare is that it was a joint venture partner in the Williamsdale quarry. The auditor noted that Totalcare provided financial statements for the joint venture for 2000-01 but did not do so for 2001-02, and the committee asks why. What changed between the 2000-01 and 2001-02 years? As far as the committee is aware, there was no reason why Totalcare could not have reported on the Williamsdale quarry joint venture in the 2001-02 report. On the contrary, the committee believes that it was important for the community to have such information provided in the annual report from Totalcare.
This was a major report from the Auditor-General and it involved the committee in considerable analysis, the taking of evidence and the preparation of its findings. I would like to thank the former Auditor-General and his staff and the Treasurer and his departmental officers for their contribution to this inquiry. My sincere thanks go to our committee secretary, Stephanie Mikac, for the report that she has put together and her splendid efforts in preparing such a report on such a complex set of matters.
I would also like to thank my colleagues: Ms Tucker, who is here today and who I am sure will soon speak on this, and Ms MacDonald-who is not with us; she is away on sick leave-for the most constructive way in which we were able to tackle the technical issues raised in this inquiry. I would like to just bring to the attention of the Assembly that, in order to process this report, with Ms MacDonald away, we had a phone hook-up, a teleconference, which worked very effectively. We worked through the entire report over a couple of phone calls and I would commend to other committee chairs the use of the teleconferencing technique; it does work and it allows the work of the Assembly to continue. So well done to Ms Tucker for raising some time ago the use of teleconferencing. All that said, I commend the report to the Assembly.
MS TUCKER (11.02): This Auditor-General's report gave qualified audit of the territory's financial statements and the financial statements of the general government sector. There was comment about financial reporting and audit in the ACT public sector. The auditor's report covered all the territory agencies and the committee commented on the workers compensation supplementation fund, the Williamsdale quarry joint venture,