Legislative Assembly for the ACT: 2009 Week 14 Hansard (Wednesday, 18 November 2009) . . Page.. 5136 ..
government would be preparing policy responses as soon as possible. By following this course, the Treasurer would be acknowledging that some situations require a specific response from government that is outside the required or normal reporting requirements.
On 23 December 2008, Ms Gallagher said that there is no perfect time to deliver a midyear review. What a load of rubbish. There is a perfect time to release a midyear review: after the midpoint of the year has been reached. What the Treasurer should have said was that some events demand a specific and extraordinary response and the global financial crisis was one such event.
Let me turn to the nature of midyear reviews. The commentary in the latest midyear review, that for 2008-09, provided a summary of what each review should aim to do: provide an update of forecast results, provide financial and economic parameters, analyse the impacts of any policy initiatives, analyse the effects of any significant events since the annual budget, and review the territory’s financial position.
The critical issue that my bill deals with is not the actual way in which the midyear reviews are currently prepared; rather, it deals with the period which is the subject of the review. As I noted a few moments ago, the Canberra community was treated by the current Treasurer to the nonsense of the purported midyear review for 2008-09 actually being released on 23 December 2008. It is obvious that, being released a week before the end of half-year, this review failed the test of being a midyear review. What it did do, though, was not cover up to two months of activity. Indeed, I was told by a senior Treasury official in a briefing on 9 December 2008 that the estimates for revenue expenditure were mostly based on data as of 31 October 2008, not the end of the year—except for interest revenue, which was calculated at 3 December; tax revenue, as at the end of November; commonwealth revenue, as at 18 November; and GST revenue and indexation adjustments, as at 5 November.
What a mishmash of an approach. It calls into question the veracity of the analysis contained in the midyear review. Clearly, this was not a review of performance to the end of the half-year. In fact, it is not possible to say what the cut-off point for this midyear review was. There is no way that having a cut-off for expenditure of 31 October, for example, represents a midyear review; it is only a third of the year. You have to question the relevance and usefulness of this approach.
The midyear review as it was prepared in 2008-09 ignored developments during the last part of that period. In 2008 these developments were most significant, as the world sank into the global financial crisis, and may have led to an inaccurate analysis of performance and developments. Moreover, in 2008 we had an Assembly election. As required by legislation, a pre-election budget update was prepared and published, on 18 September 2008. So not only did we not have a proper midyear review but we had a purported midyear review only three months after the previous review.
It is pertinent to recall the comments made by former Treasurer Ted Quinlan when introducing the requirements for a midyear review. In presenting his financial management amendment bill 2003 on 21 August, the then Treasurer said: