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Monday, 22 April 1985
Page: 1335


Senator RYAN (Minister for Education)(9.47) —I move:

That the Bill be now read a second time.

I seek leave, Mr Deputy President, to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

The purpose of this Bill is to repeal the National Welfare Fund Act 1943. Welfare and social service payments presently met from a trust account ledger head called the National Welfare Fund will in future be met directly from standing appropriations of the Consolidated Revenue Fund under the specific acts authorising the particular payments.

The National Welfare Fund was established as a trust account by the National Welfare Fund Act 1943 with amounts provided from general revenue, as a vehicle for making various welfare and social security payments. From 1945 funds to meet these payments were provided from social security levies specifically earmarked for this purpose. However, in 1952 the legislation governing the National Welfare Fund was amended to permit the National Welfare Fund to receive funds directly from the Consolidated Revenue Fund equal to whatever expenditure had to be met from the National Welfare Fund. The amounts provided for welfare and social service payments were thus no longer directly linked to levies. The National Welfare Fund effectively then became no more than a ledger head in the accounts through which payments were made. So, in other words, since 1952, expenditure on welfare, although made through this account, did not depend on it for funds.

It was a policy decision of the Government of the day which determined how much would be spent on welfare, and has been so ever since. From 1976 there has been no continuing balance in the National Welfare Fund and payments from it have been matched simultaneously by payments into it from the Consolidated Revenue Fund.

The process of transferring funds into a special account which are then simultaneously paid out of it has been time consuming and wasteful of scarce resources. It has been criticised by the Auditor-General in his report for the year ended 30 June 1981 as a mechanism that served no useful function entailing significant and unnecessary accounting work.

The Joint Committee of Public Accounts and the Senate Standing Committee on Finance and Government Operations have been consulted and agree that the National Welfare Fund serves no useful purpose.

The new accounting procedures are designed only to remove an inefficient and anachronistic process and are consistent with other initiatives by the Government to improve financial management in government.

The change to the accounting procedures has no bearing on policy issues relating to welfare payments, i.e., the way in which recipients are paid, or the quantum of funds allocated by the Government to social welfare. I would like to stress this: These changes will have absolutely no effect on the amounts available to the Government for social security purposes.

Other than the administrative savings which will result from the new procedures this legislation has no financial impact.

It is intended that clauses 1, 2 and 5 of this Bill, which provide the mechanism for the continuing payment of welfare and social security benefits, come into operation on the day the Bill receives royal assent. The remaining clauses of this Bill will come into operation on a day to be fixed by proclamation, the tentative target being 1 July 1985.

I commend the Bill to the Senate.

Debate (on motion by Senator Reid) adjourned.