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Legislative Assembly for the ACT: 1997 Week 2 Hansard (27 February) . . Page.. 515 ..

MR HUMPHRIES (continuing):

A large proportion of the costs of the Department of Health and Community Care and of the Department of Education and Training are employee costs (61% and 72% respectively).

So education has a very high weighting in the number of employees. Clearly, cost saving within education, if it is to be embarked upon, is going to have to generate some attention to the question of employee numbers if the recommendations inherent in this kind of approach are followed.

Ms McRae: Very strange! Did not some previous government try to do something about employee numbers? Let me just remind you quietly.

MR HUMPHRIES: I need no reminding about that, Ms McRae. I need no reminding at all about that.

Mrs Carnell: And we have admitted that it was a mistake.

MR HUMPHRIES: Yes. Mr Speaker, the comment that the Auditor-General made about those high costs, which I tie into the comments about the Commonwealth Grants Commission, was this:

The fact that health and education operations generated the largest parts of the 1995-96 loss leads to the obvious conclusion that if the costs of these activities cannot be reduced the Territory's future operating losses will not be lowered significantly by cost reductions.

Although curtailing other agencies' costs will help, the impact would not be great on the overall size of the loss.

Also as employee costs are the major input costs for health and education activities it is these costs which primarily need to be addressed if major savings are to be made.

As I said, I have misgivings about the way some things were expressed in this report; but, Mr Speaker, it does point out a very important and troubling element of our basic fiscal position. Whatever we might be able to do in the way of borrowing, whatever we might be able to do in the way of increasing sources of revenue, the fact remains that we have very high levels of expenditure in some areas. In the area of education it is $53.5m above standardised expenditure. One could say cynically that focusing on voluntary parent contributions is at the very fringes of this system. It is a little bit of a diversion from the main game; notwithstanding that, I thought I should put that on the record. No doubt members today will be wanting to quote from this report extensively, and I hope that they look at the whole report in its context rather than just selective bits.

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