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Legislative Council - Fifty-Second Parliament, First Session (52-1)
2011-07-07 Daily Xml
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LOCAL GOVERNMENT, FINANCIAL MANAGEMENT

The Hon. P. HOLLOWAY (15:05): I seek leave to make a brief explanation before asking the Minister for State/Local Government Relations—

The Hon. D.W. Ridgway interjecting:

The Hon. P. HOLLOWAY: Are you going to be quiet?

The PRESIDENT: Order! I want to listen to a sensible question, the Hon. Mr Ridgway.

The Hon. P. HOLLOWAY: Are you quite finished? Can I continue? I will start again—

The Hon. D.W. Ridgway interjecting:

The Hon. P. HOLLOWAY: Are you going to stop?

The PRESIDENT: Good idea; start again.

The Hon. P. HOLLOWAY: Thank you, Mr President. I seek leave to make a brief explanation before asking the Minister for State/Local Government Relations a question on financial management frameworks.

Leave granted.

The Hon. P. HOLLOWAY: I understand that there has been a significant improvement in the quality of council financial management and reporting as a result of the introduction of legislative requirements. My question is—

The Hon. J.S.L. Dawkins: It’s pretty hard when you put up their bloody parking fees and don’t tell them though.

The PRESIDENT: Order!

The Hon. J.S.L. Dawkins: It's pretty hard.

The PRESIDENT: Order! The Hon. Mr Dawkins should not be using that language.

The Hon. P. HOLLOWAY: Mr President, there has been a significant improvement in the quality of council financial management reporting as a result of the introduction of legislative requirements, which does not really say much about parking. Mr President, will you—

The Hon. J.S.L. Dawkins: Yes, but they have to include that in their reporting.

The PRESIDENT: Order, the Hon. Mr Dawkins!

The Hon. J.S.L. Dawkins: A very poorly-timed Dorothy Dixer this one, isn't it?

The Hon. P. HOLLOWAY: Can I ask the question?

The PRESIDENT: There might be a very important answer. The Hon. Mr Dawkins could even help you with your problems.

The Hon. J.S.L. Dawkins interjecting:

The Hon. P. HOLLOWAY: Are you finished? It is your time. I'm happy to sit here.

The PRESIDENT: The Hon. Mr Holloway.

The Hon. P. HOLLOWAY: Ready for the question, Mr President. Will the minister please provide an update of the leadership role the government provides to councils to aid in the quality of financial management and reporting?

The Hon. R.P. WORTLEY (Minister for Industrial Relations, Minister for State/Local Government Relations) (15:07): I thank the honourable member for his very important question. The honourable member is correct in that there has been a significant improvement in the quality of council financial management and reporting as a result of the introduction of the legislative requirement for councils to adopt long-term financial plans and infrastructure asset management plans.

I am pleased to advise that South Australia was the first state to introduce legislation requiring councils to develop and adopt long-term financial plans and infrastructure and asset management plans. The purpose of a council's long-term financial plan is to express in financial terms the activities that it proposes to undertake over the medium to longer term to achieve its stated objectives.

Together with the council's infrastructure and asset management plan, the long-term financial plan enables a council to address the sustainability of its financial performance and position. Additionally, the long-term financial plan assists councils in the maintenance, replacement and development needs for infrastructure within its area and develops proposals with respect to debt levels.

Councils in South Australia are the custodians of $16 billion of infrastructure and assets on behalf of their communities. They have an obligation to ensure that current assets are managed efficiently and effectively and that decisions regarding the acquisition of new assets, the sale of existing assets and the maintenance and renewal of existing assets are undertaken in an open and transparent way. The new requirement to have infrastructure and asset management plans has helped to focus the sector to develop the appropriate tools, policies and procedures to meet this challenge.

I am pleased to highlight that the other key catalyst for financial management and reporting improvement has been the implementation and annual update of the model financial statements. The model financial statements are consistent with Australian accounting standards and incorporate the best practice of state and other local government jurisdictions in Australia. They have materially improved the reliability, comparability and consistency of data made publicly available on council finances. They have also led to significant improvements in the level of disclosure in the notes accompanying councils' financial statements.

Finally, members may be interested to know that the annual financial statements of councils must be prepared in accordance with the requirements set out in the model statements. The model financial statements document also guides the preparation of core financial information included in council long-term financial plans and annual budgets.

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