Ms LAWRIE - 2001-10-24
Can you please inform the House of how the Community Benefit Fund has been managed to date?
Mr Reed interjecting.
ANSWER
I would like to thank my colleague, the member for Karama, for her question. The former Treasurer just interjected the word ‘deceit’. This is another story about the deception of the previous government in terms of management and mismanagement of the Territory’s finances. Professor Allan’s report has passed judgement in terms of what incompetent financial managers the previous government was. The CLP’s cavalier attitude to financial management can best be outlined in terms of how they managed the Community Benefit Fund, for which I am now responsible.
The Community Benefit Fund is established under the Gaming Machine Act. Section 150 of the Gaming Machine Act provides that licensees must pay a community benefit levy to the Community Benefit Fund on a monthly basis. The proceeds of the fund were intended to be allocated on the basis of advice from a broadly-representative committee reporting to the Minister for Racing and Gaming. Applications to the fund were supposed to go to a broadly-representative committee to assess the applications in terms of their benefit towards the community, and then decisions and recommendations made to the Minister for Racing and Gaming. This was how the fund was set up initially.
For some reason, known only to those members opposite, shortly before the election the responsibility for the fund was taken over by the former Treasurer, the member for Katherine. In fact, the previous Minister for Racing and Gaming delegated his responsibility - hand-balled his responsibility - over to the former Treasurer, without any independent committee or a representative committee being put in place to actually look to applications for this fund. It is significant that this occurred just six months prior to the election. I am not sure what this says about the view taken about the former Minister for Racing and Gaming, but obviously the previous Treasurer decided that he was not happy with the way disbursements from the fund were occurring, and decided that he could do a better job of it himself.
Under the then Treasurer, the fund was reinvented as the $1m Small Grants Program. The actual real reason for the fund in terms of community benefit all of a sudden became a Small Grants Program. A couple of ads were put in the paper asking for applications to the fund. What happened then? What was the process in terms of identifying payments from the fund? The process became so manic and fragmented the financial accountability was thrown out of the window; paperwork was sloppy, inconsistent or non-existent; the tax implications of the grants were not taken into account; and there were significant processing errors. For instance, five different grants totalling $62 210 were paid twice, such was this wonderful process that occurred inside the Treasurer’s office. We can also understand how the $107m black hole came into place. Five different grants totaling $62 000 were paid twice under this process. Not only did the process become fragmented, the process became corrupt.
Where did we go from here? Prior to the 18 August election, the former CLP administration approved 272 grants to community organisations. These grants were worth $1.562m. Yet the CLP - and we have heard the story before in the capital works program - had only allocated $159 000 from the Community Benefit Fund to fund these promises. Here we have commitments of $1.5m but an allocation of only $159 000 from the fund. This is another example of the sloppy and incompetent financial management that Professor Percy Allan has highlighted.
It is also interesting to note the timing of these payments under the fund. Of the Small Grants Program approved by the government, around $357 000 was paid prior to 30 June 2001. But in July 2001, the following month, a whopping $1.205m in payments were made. $305 000 in the 11 months preceding, and in the one month of July, $1.205m in payments. Members would be entitled to ask what was happening in this month. What was happening? What was happening soon after July this year - 18 August? What was happening - oh, an election! So, here we have the great pork-barrel, $1.205m in payments, out a fund that only had $159 000 allocated to it. This is just a further example of the irresponsible way the previous government mismanaged the public purse. Their economic formula, highlighted by the Leader of the Opposition since the election, was to spend, spend, spend in order to buy, buy, buy votes prior to the election. This was the formula: spend, spend, spend, to buy, buy, buy votes just prior to the election. We stand on this side of the House because that particular master plan failed on behalf of the former government. This government will continue to clean up the CLP’s mess to ensure that ordinary Territorians are not punished for their incompetence.
It is also worth noting that the Auditor-General is conducting a comprehensive audit of the previous government’s administration of the Community Benefit Fund. I look forward to reporting back to the House once the Auditor-General completes his report.
Mr Reed interjecting.
ANSWER
I would like to thank my colleague, the member for Karama, for her question. The former Treasurer just interjected the word ‘deceit’. This is another story about the deception of the previous government in terms of management and mismanagement of the Territory’s finances. Professor Allan’s report has passed judgement in terms of what incompetent financial managers the previous government was. The CLP’s cavalier attitude to financial management can best be outlined in terms of how they managed the Community Benefit Fund, for which I am now responsible.
The Community Benefit Fund is established under the Gaming Machine Act. Section 150 of the Gaming Machine Act provides that licensees must pay a community benefit levy to the Community Benefit Fund on a monthly basis. The proceeds of the fund were intended to be allocated on the basis of advice from a broadly-representative committee reporting to the Minister for Racing and Gaming. Applications to the fund were supposed to go to a broadly-representative committee to assess the applications in terms of their benefit towards the community, and then decisions and recommendations made to the Minister for Racing and Gaming. This was how the fund was set up initially.
For some reason, known only to those members opposite, shortly before the election the responsibility for the fund was taken over by the former Treasurer, the member for Katherine. In fact, the previous Minister for Racing and Gaming delegated his responsibility - hand-balled his responsibility - over to the former Treasurer, without any independent committee or a representative committee being put in place to actually look to applications for this fund. It is significant that this occurred just six months prior to the election. I am not sure what this says about the view taken about the former Minister for Racing and Gaming, but obviously the previous Treasurer decided that he was not happy with the way disbursements from the fund were occurring, and decided that he could do a better job of it himself.
Under the then Treasurer, the fund was reinvented as the $1m Small Grants Program. The actual real reason for the fund in terms of community benefit all of a sudden became a Small Grants Program. A couple of ads were put in the paper asking for applications to the fund. What happened then? What was the process in terms of identifying payments from the fund? The process became so manic and fragmented the financial accountability was thrown out of the window; paperwork was sloppy, inconsistent or non-existent; the tax implications of the grants were not taken into account; and there were significant processing errors. For instance, five different grants totalling $62 210 were paid twice, such was this wonderful process that occurred inside the Treasurer’s office. We can also understand how the $107m black hole came into place. Five different grants totaling $62 000 were paid twice under this process. Not only did the process become fragmented, the process became corrupt.
Where did we go from here? Prior to the 18 August election, the former CLP administration approved 272 grants to community organisations. These grants were worth $1.562m. Yet the CLP - and we have heard the story before in the capital works program - had only allocated $159 000 from the Community Benefit Fund to fund these promises. Here we have commitments of $1.5m but an allocation of only $159 000 from the fund. This is another example of the sloppy and incompetent financial management that Professor Percy Allan has highlighted.
It is also interesting to note the timing of these payments under the fund. Of the Small Grants Program approved by the government, around $357 000 was paid prior to 30 June 2001. But in July 2001, the following month, a whopping $1.205m in payments were made. $305 000 in the 11 months preceding, and in the one month of July, $1.205m in payments. Members would be entitled to ask what was happening in this month. What was happening? What was happening soon after July this year - 18 August? What was happening - oh, an election! So, here we have the great pork-barrel, $1.205m in payments, out a fund that only had $159 000 allocated to it. This is just a further example of the irresponsible way the previous government mismanaged the public purse. Their economic formula, highlighted by the Leader of the Opposition since the election, was to spend, spend, spend in order to buy, buy, buy votes prior to the election. This was the formula: spend, spend, spend, to buy, buy, buy votes just prior to the election. We stand on this side of the House because that particular master plan failed on behalf of the former government. This government will continue to clean up the CLP’s mess to ensure that ordinary Territorians are not punished for their incompetence.
It is also worth noting that the Auditor-General is conducting a comprehensive audit of the previous government’s administration of the Community Benefit Fund. I look forward to reporting back to the House once the Auditor-General completes his report.
Last updated: 09 Aug 2016