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Wednesday, 11 December 2002
Page: 7722

Senator WEBBER (2:00 PM) —My question is to Senator Minchin, the Minister for Finance and Administration. Is the minister aware that the Auditor-General reported yesterday that the Department of Employment and Workplace Relations received legal advice that a special account created under section 20 of the Financial Management and Accountability Act `could not be used' to make payments under the General Employee Entitlements and Redundancy Scheme? Can the minister now confirm for the Senate that, in the face of this clear legal advice, the department went ahead and made the payments through this special account anyway? Does the Minister for Finance and Administration condone the use of special accounts for illegal purposes? What action does the minister intend to take now that the Auditor-General has exposed this illegal payment?

Senator MINCHIN (Minister for Finance and Administration) —Mr Deputy President, I am not aware of that Auditor-General's report. Of course, the question is more appropriately addressed to the Minister representing the Minister for Employment and Workplace Relations who, under the legislation, has direct responsibility for special accounts for which he has ministerial responsibility. Off the top of my head, I am not sure whether that account was by way of legislation or by way of determination. I will certainly have at look at that ANAO report although, as I say, that is a matter for the relevant minister and the relevant department to deal with.

Of course, the language of `illegality' is completely over the top in relation to special accounts. The legislation or determinations which set up these special accounts, which of course have to be approved by this parliament in the first place, broadly set out the terms and conditions under which moneys can be paid out of those accounts. From time to time, the Auditor-General will take note of the fact that a department may not necessarily have complied entirely with the legislative provisions in relation to their use—and that will occur. It should not occur and we do try to ensure that departments observe to the letter the rules and regulations regarding the use of special accounts. I would remind you that special accounts have been a feature of Commonwealth activities since 1908. They are an appropriate and sensible way in which government departments deal with moneys and they have been so for nearly 100 years. I will have a look at the Auditor-General's report on that matter but, as I say, it is really a matter for the relevant minister.

Senator WEBBER —Mr Deputy President, I ask a supplementary question. I thank the minister for his answer. Again I go to a section of the Financial Management and Accountability Act and I ask the minister: are you aware of the recent Auditor-General's report on the management of trust moneys held by the government under section 16 of the Financial Management and Accountability Act? Minister, can you confirm that the Auditor-General concluded that the government had failed to meet its legal responsibility to keep trust moneys separate from other public moneys? Minister, do you condone illegal practices in the Commonwealth's management of trust money?

Senator MINCHIN (Minister for Finance and Administration) —It is childish and silly in the extreme for the opposition to refer to notes made by the Auditor-General as indicating illegal activity. Senator Webber, you have not asked a supplementary; you have asked a different question in relation to the ANAO report on trust money. The ANAO said in that case that they endorsed the financial framework in relation to agencies administering trust moneys. They found that, despite the guidance available, classification of trust moneys is not always straightforward.

The ANAO report has recommended better implementation of the framework by agencies, so it is a strong endorsement of the framework which is the responsibility of my department. It is the responsibility of departments to ensure that they implement that framework correctly. In that case, the ANAO recommended that, where there is uncertainty as to the status of moneys being reported as trusts, organisations should preferably seek legal advice to determine whether agreements constitute legally binding trusts. The ANAO made some sensible recommendations and they will be implemented.