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This is a Bill, not an Act. For current law, see the Acts databases.


GOVERNMENT FINANCIAL RESPONSIBILITY BILL 1998

                       Western Australia




Government Financial Responsibility Bill
               1998


                         CONTENTS




                   Part 1 -- Preliminary
  1.       Short title                                             2
  2.       Commencement                                            2
  3.       Purposes of this Act                                    2
  4.       Interpretation                                          2
  5.       Obtaining information from public sector bodies         4
  6.       The financial management principles                     4
  7.       The financial elements                                  4
  8.       Matters to be addressed in statements and reports       5
  9.       Releasing financial statements and reports              5

       Part 2 -- Government financial planning and
                      reporting
  10 .     Government financial planning                           6
  11 .     Government Financial Strategy Statements                6
  12 .     Government Financial Projections Statements             7



                                                               page i
                            143 --1
Government Financial Responsibility Bill 1998




      13 .     Government Mid-year Financial Projections
               Statements                                       9
      14 .     Government Financial Results Report             12
      15 .     Pre-election Financial Projections Statements   12
      16 .     Costing pre-election commitments                14




page ii
                           Western Australia



                     LEGISLATIVE ASSEMBLY




 Government Financial Responsibility Bill
                1998
                               A Bill for


An Act to establish a framework for government financial planning
and reporting, to facilitate public scrutiny of government financial
policy and performance, and for related purposes.



The Parliament of Western Australia enacts as follows:




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     s. 1



                              Part 1 -- Preliminary
     1.         Short title
                This Act may be cited as the Government Financial
                Responsibility Act 1998.

 5   2.         Commencement
                This Act commences on the day on which it receives the Royal
                Assent.

     3.         Purposes of this Act
          (1)   The main purposes of this Act are --
10                (a)   to establish a framework for government financial
                        planning with a view to improving government financial
                        outcomes; and
                 (b)    to facilitate public scrutiny of government financial
                        policy and performance.
15        (2)   Nothing in this Act creates rights or duties that are enforceable
                in judicial or other proceedings.

     4.         Interpretation
                In this Act, unless the contrary intention appears --
                "Australian Accounting Standards" means the Australian
20                   Accounting Standards issued by the Australian Accounting
                     Research Foundation on behalf of the Australian Society of
                     Certified Practising Accountants and the Institute of
                     Chartered Accountants in Australia;
                "budget planning cut-off date", in relation to a budget year,
25                   means the date on which the Treasurer notifies the Under
                     Treasurer under section 12(4) that the budget process for
                     that year has been completed;

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                                                                  s. 4



     "budget year" means the financial year to which a budget
         relates;
     "external reporting standards" means --
          (a) the concepts and classifications set out in GFS
 5             Australia; and
          (b) the Australian Accounting Standards;
     "financial element" has the meaning given in section 7;
     "financial management principles" means the financial
         management principles set out in section 6;
10   "GFS Australia" means the publication of the Australian
         Bureau of Statistics known as Government Finance
         Statistics Australia: Concepts, Sources and Methods, as
         updated from time to time;
     "Government Financial Projections Statement" means a
15       statement under section 12;
     "Government Financial Strategy Statement" means a
         statement under section 11;
     "Government Mid-year Financial Projections Statement"
         means a statement under section 13;
20   "Pre-election Financial Projections Statement" means a
         statement under section 15;
     "pre-election period" means the period between the issue of
         the writs for a general election for the Legislative
         Assembly and the date of the general election;
25   "public sector body" means --
          (a) a department established under section 35 of the
               Public Sector Management Act 1994; or
          (b) a body, whether corporate or unincorporate, or the
               holder of an office, post or position, being a body,



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     s. 5



                          office, post or position that is established or
                          continued for a public purpose under a written law;
                "release", in relation to a statement or report made or to be
                     made under this Act, has the meaning given in section 9;
 5              "Under Treasurer" means the chief executive officer within
                     the meaning of the Interpretation Act 1984.

     5.         Obtaining information from public sector bodies
          (1)   The Under Treasurer may, in writing, ask a public sector body
                for any information needed to prepare a statement, report or
10              policy costing for the purposes of this Act.
          (2)   The Under Treasurer may issue written guidelines to help public
                sector bodies to provide the information needed to prepare
                statements, reports and policy costings for the purposes of this
                Act.

15   6.         The financial management principles
                The financial management principles are as follows --
                 (a) funding for current services is to be provided by the
                       current generation;
                 (b) spending and taxing policies are to be formulated and
20                     applied so as to give rise to a reasonable degree of
                       stability and predictability;
                 (c) financial risks are to be managed prudently.

     7.         The financial elements
          (1)   For the purposes of this Act, a financial element is --
25               (a) the assets of the State;
                 (b) the liabilities of the State;
                 (c) the net assets of the State;


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                                                   Preliminary           Part 1

                                                                              s. 8



                 (d)    the operating expenses of the State;
                 (e)    the operating revenue of the State;
                  (f)   the operating balance of the State; or
                 (g)    any other significant element of the Government's
 5                      financial management or performance.
          (2)   For the purposes of this Act, the amount or value of a financial
                element is to be calculated in accordance with the principles of
                the external reporting standards.

     8.         Matters to be addressed in statements and reports
10        (1)   Financial projections or financial reports released under this Act
                are to include projections or reports of the matters usually
                addressed in a general purpose financial report within the
                meaning of Australian Accounting Standard 31 (Financial
                Reporting by Governments).
15        (2)   A projection or report of an operating surplus or total equity is
                either to be consolidated in accordance with Australian
                Accounting Standard 31, or to be calculated in such a way that
                the projected or reported result is the same as if it had been
                consolidated in accordance with the Standard.

20   9.         Releasing financial statements and reports
          (1)   Where this Act provides for the release of a statement or report,
                the statement or report is to be --
                  (a) tabled in each House of Parliament; and
                  (b) made publicly available.
25        (2)   If a House of the Parliament is not sitting when a statement or
                report is to be released, the statement or report is to be made
                publicly available at that time, and is to be tabled in the House
                as soon as practicable.


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     Part 2      Government financial planning and reporting

     s. 10



                 Part 2 -- Government financial planning and
                                reporting
     10.          Government financial planning
           (1)    The Government's financial planning is to be consistent with the
 5                financial management principles.
           (2)    The Government's financial planning may deviate temporarily
                  from the financial management principles in special
                  circumstances.
           (3)    If there is any deviation from the financial management
10                principles, the Under Treasurer is to prepare, for inclusion in the
                  next Government Financial Strategy Statement to be released --
                    (a) a statement of the reasons for the deviation; and
                    (b) a summary of the Government's proposed programme
                           for reverting to compliance with the principles.

15   11.          Government Financial Strategy Statements
           (1)    The Treasurer is to release a Government Financial Strategy
                  Statement at least once in each calendar year.
           (2)    A Government Financial Strategy Statement is to --
                    (a)   set out the Government's medium-term targets in
20                        relation to the financial element or elements relevant to
                          each target;
                    (b)   explain how the targets are to be achieved;
                    (c)   indicate how the targets are related to the financial
                          management principles;
25                  (d)   contain a statement and summary under section 10(3), if
                          required; and



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                                                                              s. 12



                  (e)   indicate the time frames proposed for achieving the
                        targets.
           (3)   If the Government makes a significant change in its financial
                 strategy, the Treasurer is to release a new Government Financial
 5               Strategy Statement, dealing with the matters listed in
                 subsection (2), and giving the reasons for the change.
           (4)   The new Government Financial Strategy Statement is to be
                 released as soon as possible after the change in financial
                 strategy, but in any case no later than when the next
10               Government Financial Projections Statement is released.
           (5)   If the financial strategy to be dealt with in a Government
                 Financial Strategy Statement has not changed significantly from
                 the financial strategy dealt with in the previous Government
                 Financial Strategy Statement, then, instead of releasing a full
15               Government Financial Strategy Statement in accordance with
                 subsection (2), the Treasurer may release a Government
                 Financial Strategy Statement to the effect that the information in
                 the previous Government Financial Strategy Statement is still
                 current.

20   12.         Government Financial Projections Statements
           (1)   The Treasurer is to release a Government Financial Projections
                 Statement when the appropriation Bills and budget papers for a
                 budget or supplementary budget are tabled in the Legislative
                 Assembly.
25         (2)   A Government Financial Projections Statement is to include the
                 following --
                   (a) financial projections for the Government for the budget
                        year and the 3 following financial years;
                   (b) an account of the economic and other assumptions on
30                      which the financial projections are based;

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                (c)   an explanation of the implications of the financial
                      projections for meeting the financial targets set out in
                      the most recently released Government Financial
                      Strategy Statement;
 5              (d)   an analysis of the degree to which the financial
                      projections are likely to be affected by changes in the
                      circumstances on which the economic and other
                      assumptions are based;
                (e)   a statement of any risks, quantified as far as practicable,
10                    that could materially affect the financial projections,
                      including particulars of any contingent liabilities and
                      any government negotiations that have not been
                      finalized;
                (f)   a certificate by the Under Treasurer under
15                    subsection (7).
        (3)   When preparing a Government Financial Projections Statement,
              the Under Treasurer is to take account of the following --
                (a) the implications of all relevant decisions that were taken
                     by the Government before the budget planning cut-off
20                   date and that were known to the Under Treasurer on or
                     before that date;
                (b) any other information that could have a material effect
                     on the financial projections and that was available to the
                     Under Treasurer on or before the budget planning
25                   cut-off date.
        (4)   When the Treasurer is satisfied that the budget planning process
              has been completed for a budget year, the Treasurer is to notify
              the Under Treasurer to that effect.
        (5)   On or before the budget planning cut-off date, the Treasurer
30            must give the Under Treasurer all available information about
              government decisions taken before that date --


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                        Government financial planning and reporting      Part 2

                                                                           s. 13



                  (a)   that has or could have material financial or economic
                        implications relevant to preparing the Government
                        Financial Projections Statement; and
                  (b)   that the Under Treasurer could not reasonably be
 5                      expected to have already.
           (6)   The Government Financial Projections Statement does not have
                 to include commercially confidential information.
           (7)   The Under Treasurer is to certify to the effect that --
                  (a) the financial projections, and the economic forecasts and
10                     assumptions, in the Government Financial Projections
                       Statement were prepared by the Under Treasurer;
                  (b) the statement takes account of all relevant information
                       available to the Under Treasurer on the budget planning
                       cut-off date;
15                (c) the statement sets out the implications of all relevant
                       decisions that were known to the Under Treasurer on
                       that date; and
                  (d) the economic assumptions on which the financial
                       projections in the statement are based were finalized on
20                     the date set out in the certificate.

     13.         Government Mid-year Financial Projections Statements
           (1)   The Treasurer is to release a Government Mid-year Financial
                 Projections Statement not later than 15 February in each budget
                 year.
25         (2)   A Government Mid-year Financial Projections Statement is to
                 include the following --
                   (a) financial projections for the Government for the budget
                         year and the 3 following financial years;



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     s. 13



                (b)    an account of the economic and other assumptions on
                       which the financial projections are based;
                (c)    an explanation of the implications of the financial
                       projections for meeting the financial targets set out in
 5                     the last Government Financial Strategy Statement;
                (d)    an analysis of the degree to which the financial
                       projections are likely to be affected by changes in the
                       circumstances on which the economic and other
                       assumptions are based;
10              (e)    a statement of any risks, quantified as far as practicable,
                       that could materially affect the financial projections,
                       including particulars of any contingent liabilities and
                       any government negotiations that have not been
                       finalized;
15               (f)   a certificate by the Under Treasurer under
                       subsection (5).
        (3)    When preparing a Government Mid-year Financial Projections
               Statement, the Under Treasurer is to take account of the
               following --
20               (a) the implications of all relevant decisions that were taken
                      by the Government before the cut-off date referred to in
                      the certificate under subsection (5) and that are known
                      to the Under Treasurer (excluding any interim decisions
                      taken in the course of planning the budget to be brought
25                    down in the next budget year);
                 (b) any other relevant information available to the Under
                      Treasurer before the cut-off date noted in the certificate
                      under subsection (5).
        (4)    The Government Mid-year Financial Projections Statement does
30             not have to include commercially confidential information.



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     (5)   The Under Treasurer is to certify to the effect that --
            (a) the financial projections, and the economic forecasts and
                 assumptions, in the Government Mid-year Financial
                 Projections Statement were prepared by the Under
 5               Treasurer;
            (b) the statement takes account of all relevant information
                 available to the Under Treasurer on the cut-off date
                 noted in the certificate;
            (c) the statement sets out the implications of all relevant
10               decisions that were known to the Under Treasurer on the
                 cut-off date; and
            (d) the economic assumptions on which the financial
                 projections in the statement are based were finalized on
                 the date set out in the certificate.
15   (6)   If any information to be included in a Government Mid-year
           Financial Projections Statement under subsection (2) is the same
           as information included in the last Government Financial
           Projections Statement to be released then, instead of setting out
           the information in full, the Government Mid-year Financial
20         Projections Statement may include a summary of the
           information, with a note to the effect that the information is
           unchanged from the previous statement.
     (7)   If --
             (a)   the last financial projections statement released before a
25                 Government Mid-year Financial Projections Statement
                   is released was a Pre-election Financial Projections
                   Statement; and
            (b)    the information to be included in the Government
                   Mid-year Financial Projections Statement is the same as
30                 information included in the Pre-election Financial
                   Projections Statement,


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                 then, instead of setting out the information in full, the
                 Government Mid-year Financial Projections Statement may
                 consist of a statement to the effect that the information given in
                 the Pre-election Financial Projections Statement is still current.

 5   14.         Government Financial Results Report
           (1)   The Treasurer is to release a Government Financial Results
                 Report for each budget year within 3 months after the end of the
                 budget year.
           (2)   A Government Financial Results Report must --
10                (a) be prepared in accordance with the Australian
                       Accounting Standards;
                  (b) include the financial result for the budget year;
                  (c) include an explanation of the factors and considerations
                       that contributed to any material differences between the
15                     financial result and the financial projections; and
                  (d) include an explanation of the factors and considerations
                       that contributed to any material differences between the
                       financial result and the Government's medium-term
                       targets applying at the beginning of the budget year.

20   15.         Pre-election Financial Projections Statements
           (1)   The Treasurer is to release a Pre-election Financial Projections
                 Statement within 14 days after the Legislative Assembly is
                 dissolved or expires.
           (2)   A Pre-election Financial Projections Statement is to include the
25               following --
                   (a) financial projections for the Government for the budget
                        year and the 3 following financial years;
                   (b) an account of the economic and other assumptions on
                        which the financial projections are based;

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                                                                         s. 15



            (c)    an explanation of the implications of the financial
                   projections for meeting the financial targets set out in
                   the last Government Financial Strategy Statement;
            (d)    an analysis of the degree to which the financial
 5                 projections are likely to be affected by changes in the
                   circumstances on which the economic and other
                   assumptions are based;
            (e)    a statement of any risks, quantified as far as practicable,
                   that could materially affect the financial projections,
10                 including particulars of any contingent liabilities and
                   any government negotiations that have not been
                   finalized;
             (f)   a certificate by the Under Treasurer under
                   subsection (6).
15   (3)   When preparing a Pre-election Financial Projections Statement,
           the Under Treasurer is to take account of the following --
             (a) the implications of all relevant decisions that were taken
                  by the Government before the Legislative Assembly was
                  dissolved or expired and that are known to the Under
20                Treasurer (excluding any interim decisions taken in the
                  course of planning the next budget to be brought down);
             (b) any other information available to the Under Treasurer
                  at the end of 3 days after the Legislative Assembly was
                  dissolved or expired.
25   (4)   Within 3 days after the dissolution or expiry of the Legislative
           Assembly, the Treasurer is to give the Under Treasurer all
           available information about government decisions taken before
           the date of dissolution or expiry --
             (a) that has or could have material financial or economic
30                 implications relevant to preparing the Pre-election
                   Financial Projections Statement; and


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                  (b)   that the Under Treasurer could not reasonably be
                        expected to have already.
           (5)   The Pre-election Financial Projections Statement does not have
                 to include commercially confidential information.
 5         (6)   The Under Treasurer is to certify to the effect that --
                  (a)   the financial projections, and the economic forecasts and
                        assumptions, in the Pre-election Financial Projections
                        Statement were prepared by the Under Treasurer;
                  (b)   the statement takes account of all relevant information
10                      available to the Under Treasurer at the end of 3 days
                        after the Legislative Assembly was dissolved or expired;
                  (c)   the statement sets out the implications of all relevant
                        decisions that were known to the Under Treasurer at that
                        time; and
15                (d)   the economic assumptions on which the financial
                        projections in the statement are based were finalized on
                        the date set out in the certificate.
           (7)   If any information to be included in a Pre-election Financial
                 Projections Statement under subsection (2) is the same as
20               information included in the last Government Financial
                 Projections Statement or the last Government Mid-year
                 Financial Projections Statement (whichever was released later)
                 then, instead of setting out the information in full, the
                 Pre-election Financial Projections Statement may consist of a
25               statement to the effect that the information in the previous
                 statement is still current.

     16.         Costing pre-election commitments
           (1)   The Treasurer may request the Under Treasurer to prepare
                 costings of policies that have been publicly announced by the
30               Government in a pre-election period.

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     (2)   The leader of a party in opposition that was represented in the
           Legislative Assembly when the Legislative Assembly was
           dissolved or expired may ask the Treasurer for a costing of a
           policy that has been publicly announced by the party during the
 5         pre-election period after the dissolution or expiry.
     (3)   The Treasurer may ask the Under Treasurer to prepare a costing
           requested under subsection (2).
     (4)   A request for a policy costing must --
            (a) be in writing;
10          (b) outline the policy to be costed, giving enough
                  information for the Under Treasurer to be able to
                  prepare the costing; and
            (c) state the purpose or intention of the policy.
     (5)   A person who requests a policy costing to be prepared may
15         withdraw the request by writing to the Under Treasurer.
     (6)   When the Under Treasurer prepares a policy costing, the Under
           Treasurer is to --
            (a) send a copy of the policy costing, through the Treasurer,
                  to the person who requested it; and
20          (b) make the policy costing publicly available.
     (7)   The Under Treasurer is not obliged to prepare or finish
           preparing a policy costing if insufficient information or time is
           available to do so before the end of the pre-election period.
     (8)   If the Under Treasurer is unable to prepare or finish a policy
25         costing before the end of the pre-election period, the Under
           Treasurer is to inform the person who requested the costing to
           that effect, by writing to the person through the Treasurer.




 


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