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Legislative Assembly for the ACT: 2004 Week 06 Hansard (Thursday, 24 June 2004) . . Page.. 2631 ..

MS TUCKER (12.14): The Greens will not be supporting Ms Dundas’s bill. We will be supporting the government’s bill. We had a committee inquiry looking at this issue that made a number of recommendations and the government’s bill has picked up most of the changes recommended by that inquiry. The main points of difference between Ms Dundas’s approach and that of the committee, and now the government, were the issues of unforeseeability, return of funds and urgency.

In brief, the committee recommended that the government’s proposed amendments to the Financial Management Act should:

(a) provide for urgent and unforeseen expenditure, and where there is an error in omission or the understatement of other appropriations;

(b) include the Commonwealth’s definition of urgency;

(c) define expenditure as:

(i) entering into a contract to make a payment for goods or services; or

(ii) entering into a contract to make a payment of a grant or subsidy; or

(iii) entering into a contract to make a payment for a capital injection.

(d) provide for the return of “unspent” funds to the Territory’s Banking Account by 30 June each year;

(e) provide that Treasurer’s Advance authorisations be tabled in the…Assembly within 3 sitting days of issue and that this information be presented cumulatively, with a summary of total expenditures tabled at 30 June each year.

We did not make the recommendation to deal specifically with the question of who in government is required to foresee the need for the expenditure. However, the report did include several points of view on this matter. The Auditor-General, in particular, made some interesting comments that were quoted in the committee’s report. Basically, she said:

I think the unforeseeable test is actually quite confusing because it can be foreseen by most Chief Executives throughout the year about cost pressure and so on, but as the Treasurer advised, because you’ve foreseen the need of the cost pressure, but at the time you don’t know if you could use other mechanisms to take care of it, or you don’t know the certainty of when that will happen or you don’t even know the quantity of it to be accurately advised to Government.

Hence in many cases, if you’re really strict in the terms of the foreseeable test, then most of the need can be foreseen by the Chief Executive running the department. So that test is quite confusing in terms of foreseeable by whom, foreseeable at what time, is it before the Appropriation Bill No 1, i.e., the first one, or supplementary bill. So if you would like to ensure that the Treasurer’s Advance is limited for urgency or urgent need for expenditure, then that test, the unforeseeable test, may or may not be required.

To keep the unforeseen test is not helpful [because] Chief Executives foresee some of these things already, but if they do that then they are in breach of the law by asking for Treasurer’s Advance later. So it doesn’t work in practice. So…the urgency test would be a better test to apply and remove the foreseeable test.

As I understand it, the problem is that, if you include chief executives of the department and Treasury, along with the minister for that area, then you are saying that the need for expenditure must not have been foreseen at basically any stage of the budgeting process.

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