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Wednesday, 8 December 2004
Page: 74

Senator HILL (Minister for Defence) (3:04 PM) —I have some further information in response to a question asked by Senator Hogg on 2 December in relation to Auditor-General's report No. 15. I seek leave to incorporate that information in Hansard.

Leave granted.

The response read as follows—

Senator Hogg asked the Minister representing the Minister for Veterans' Affairs without notice on 2 December 2004:

With reference to the Auditor-General's report No. 15, which uncovers massive financial bungling by a range of government departments and entities

(1) Why did the Department of Veterans' Affairs operate an illegal operating overdraft in 2002-03 in breach of its contract with its bank?

(2) Did the Minister know of and/or approve such an arrangement?

(3) In respect of the overdraft, what was the interest rate payable and total interest bill paid for this illegal overdraft scheme?

(4) In respect of the overdraft, why was such an expensive funding operation entered into?

Senator HillThe Minister for Veterans' Affairs has provided me with the following information in response to the Honourable Senator's question.

(1) The Department of Veterans' Affairs has had extensive discussions with the Department of Finance and Administration regarding this matter. The DVA administered payments account group inadvertently went into debit balance on once occasion, late December 2002. However, under the Commonwealth banking arrangements, any debit balance is replenished at the end of the day. Accordingly, no overdraft existed and there was no cost to the Commonwealth. It was also not a breach of the Department's contract with its transactional banker, the Reserve Bank of Australia and payments made by DVA to its clients were not affected.

(2) No. The matter is effectively procedural in nature and the Minister was not advised by the Department.

(3) No interest penalties were incurred by the Department.

(4) The account funds are government appropriations that are drawn down as needed.