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Legislative Assembly for the ACT: 1996 Week 12 Hansard (19 November) . . Page.. 3786 ..

MR MOORE (continuing):

a repayment. The irony is that in this case often the Government has created a rental stream. They have actually said, "Where we own buildings, we are going to assign to that building, or that office block, a rental stream. Now that we have a rental stream, instead of that being paid back into general revenue, it can actually go to paying off a loan". So, whatever you call it, it is another form of borrowing.

There was an article by Crispin Hull in the Canberra Times that I thought very clearly expressed what was the advantage in this system over other systems of borrowing. The advantage is that the person from whom you are borrowing the money actually gets a tax break from the Federal Parliament. In other words, what the taxpayers save in Canberra Australian taxpayers pay in another form, because they do not have the money. The difficulty for us in the ACT is that, if everybody else is doing it and we as Federal taxpayers are paying for them to do it, then basically we are missing out.

It is one of those things that really governments at their COAG meetings ought to deal with and say, "What is the point of having a win in this port, because we are getting a tax break in another way?". If the win is effectively a transfer of money from the Federal Government to the ACT Government, then I guess we are going to have to ride with it for some time. But that has not been the case. Recognising that, I think the committee made a very important recommendation to "define in the budget paper the ACT's major marketable fixed assets, indicate whether these assets are Territorial or departmental, indicate the amount by which these assets are to be depreciated and the resulting written down value of the assets". That is important. The committee also recommended that the Government "identify assets which have the potential for sale and leaseback, and sale of the lease".

It strikes me that there is a whole series of possibilities for this sale and lease-back. For example, if we look at public housing, there is $1.4 billion, roughly. We have a clear rental stream associated with that particular one. The sale and lease-back of public housing may well be a useful device, if that is what the Government is intending to do. If they are intending to do it, then perhaps we could also learn some lessons about Challis Street in Dickson and how that has been done. There is a sale and lease-back arrangement, at the end of which in, as I recall, 12 or 15 years' time - I do not know which, but it is one of those two; let us say 12 years' time - that comes back into government ownership. If you apply the same system to a $1.4 billion asset and divide it by 10 and borrow $140m a year on a sale and lease-back, at the end of 10 years it starts to return to the government. So, we continue the system, and the system becomes sustainable. So, you have a method, effectively, of continuing that kind of borrowing.

If that is what you are going to do, tell us. Then let us have an appropriate, open debate about whether we should be having a sale and lease-back system of government housing or whether we should not. I think there is a whole series of other issues that come into play as to whether there is reasonable social justice in that. Maybe another example is that we would assign a rental stream to the Canberra Hospital. What is that worth? It would be $300m or something in that order. If that is the case and we can assign a rental stream to it, then let us try to work out what the sale and lease-back arrangement would be there.

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