Page 3603 - Week 11 - Thursday, 22 September 2005

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Financial Management Legislation Amendment Bill 2005

Debate resumed from 18 August 2005, on motion by Mr Quinlan:

That this bill be agreed to in principle.

MR MULCAHY (Molonglo) (5.35): Mr Speaker, the essential elements of this bill are: changed reporting requirements, with some elements an improvement but others not satisfactory in respect of timing; the capacity for appropriations to be made direct to territory authorities and corporations; and several consequential amendments to provide for the new funding and accountability arrangements to apply to 22 territory authorities and corporations.

I am pleased to see the government is at last responding to calls to improve the quality of information in its annual financial and performance statements. I and others have been critical of the paucity of useful information in budgets and annual reports and have spoken of the need for data to be presented in a form that allows ready comparison of performance from year to year, compares results achieved with the original budget and shows how the budget has been revised throughout the year. The inclusion of a column showing the original budget and a separate column showing the revised budget will clear up confusion as to what the starting point was and give a presentation of actual performance against the original plan.

The proposed changes in performance measurement are obviously yet to be tested in the field. It will probably take a couple of years of experience, I suspect, to fully evaluate how effective the new approach will be in actually conveying meaningful information about agencies’ performance in financial management and the delivery of quality services to the community in a timely and efficient manner. No doubt the performance measures will be refined and improved in light of that experience.

Mr Speaker, the approach outlined in the supplement to the 2005-06 budget has two categories of performance measures. The first relates to the results compared with longer term and strategic outcomes. Since these are not readily quantified, especially those in the human services area, they do not lend themselves to a full audit opinion as to the accuracy of numbers, as required by the current Audit Act.

So it is not appropriate to try to make them subject to annual scrutiny by the Auditor-General in the same way as financial information. It is better that the audit office separately evaluate agencies’ performance against longer term and strategic outcomes along the lines that it has done recently; for example, on waiting lists for elective surgery and the development application and approval process.

The second category of performance measures is effectiveness and efficiency in delivering outputs. These are more readily measured in terms of volume and cost, and will be subject to annual scrutiny and report by the Auditor-General.

The opposition supports these changes in principle but, of course, it may take a couple of budget cycles to see how useful this information is and what the net benefits are in terms of disclosure and better delivery of outputs. However, a matter of concern is that

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