Page 4551 - Week 15 - Tuesday, 6 December 1994
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
What we have done is to set aside, year by year, provisions that are well in excess of our annual costs, to ensure that there will not be an adverse effect on future budgets. We will be continuing with this approach.
Mrs Carnell: That is why the unfunded level has doubled in three years.
MS FOLLETT: If Mrs Carnell would hush up for one moment, she might learn something. It is doubtful, but she has no chance at all while she keeps trying to talk over me.
Madam Speaker, the estimated increase in the provisions during 1994-95 is $43m. That compares with our annual emerging cost, what we have to pay for superannuation, of $7.9m. We have set aside $43m to fund this year's cost of $7.9m. We have some left over, and I gather that that has sunk in.
Mrs Carnell: That is this year's cost. It is not our unfunded debt; you know that.
MADAM SPEAKER: Order! Mr Kaine would like to hear the answer to his question.
MS FOLLETT: Madam Speaker, the Government established the superannuation provision trust account in 1991 in order to manage our superannuation liabilities and our provisions. The liability is the employer component of benefits that will be paid from the Commonwealth superannuation scheme to people who have ACT service after 1 July 1989. Under an agreement that we have with the Commonwealth, the liability for all service before 1 July 1989 is borne by the Commonwealth. We will meet our liability by reimbursing the Commonwealth on that emerging basis for the costs of benefits that are paid to people with ACT service after 1 July 1989.
I would like to give members the current estimates of those emerging costs so that you know realistically what the Territory is up for. As I said, for 1994-95, it is $7.9m; for which we have set aside $43m. For 1995-96, it will be $10.3m; for 1996-97, $11m; for 1997-98, $15.2m; and for 1998-99, $19.9m. Those are the emerging costs, what we will actually have to pay. The provision that we had set aside in the superannuation provision trust account at 1 July this year was $149m. That was what we had set aside against those costs. The appropriations, the contributions by commercial agencies and investment earnings will increase that provision by an estimated $43m to 30 June 1995. That provision, together with our appropriations, will be available to smooth that transition to meeting the higher levels of emerging costs that I told you about and that will be coming up in future years.
Madam Speaker, those financial arrangements that I have outlined are in relation to the two Commonwealth superannuation schemes - the CSS and the PSS, the more recent one. In addition, the Government fully funds our liabilities in respect of the group of casual, temporary and part-time staff who do not belong to either of those schemes. That represents a very responsible approach to effectively funding our workers' superannuation entitlements as they become due, plus having put aside a considerable amount of reserves against future need. During 1994-95, the current financial year, we will be reviewing the arrangements for managing superannuation liabilities, and we will be taking into account actuarial advice on the long-term development of annual
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .