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Legislative Assembly for the ACT: 1997 Week 8 Hansard (28 August) . . Page.. 2598 ..

MR WHITECROSS (continuing):

Auditor-General's Report No. 3 of 1997 was presented to the Assembly on 26 February this year. The audit presents the results of an analysis of the adequacy of government income to meet the full costs of programs based upon whole-of-government financial statements for the year 1995-96. The audit did not produce findings as such but rather addressed a range of matters and drew various conclusions. (Quorum formed) Although the audit covers accounts which are more than a year old at this stage, it gives rise to concern not only that the ACT incurred a significant loss from all its operations in 1995-96 - an amount of $347m - but also that factors which contributed to that loss have been exacerbated by the decision in the 1997-98 budget to extract an extraordinary dividend from ACTEW, namely, $100m.

In view of the lapse of time since the audit, it is important that the Assembly be fully informed on the current state of affairs. The committee noted that in the audit report comparisons are made between the ACT accounts and other State accounts and other municipal accounts, and in considering those matters it became apparent that the current budget papers no longer contain municipal accounts which would provide a basis for a comparison. Accordingly, the committee has recommended that the Government present a table of municipal account for the current budget year and that such a table be presented in all future budgets.

The committee notes that the ACT has not been fairly compensated through the Commonwealth Grants Commission for cross-border or national capital issues, and accepts that there has been insufficient recognition of the transitional funding needs of the ACT with the implementation of self-government. It is important, however, that these matters be kept in perspective as basically marginal issues, as the underlying operating loss is primarily a matter for the ACT Government.

The emerging and accruing costs of the unfunded ACT public sector superannuation liability are of major concern. The issue is discussed at length by the committee in the report. However, it should be noted that the growth in emerging costs to around the year 2030 in relation to existing staff with existing superannuation entitlements will need to be met out of ACT revenues and, without offsetting adjustments, will lead to a significant increase in the operating loss over coming years. The committee has recommended that the Government report to the Assembly on short- and long-term options for addressing the problem, taking account of the relevant recommendations of the 1996-97 and 1997-98 Estimates Committee reports.

The committee has also noted that, while the Government has accepted that lease-back arrangements as a source of funds permit a lower level of borrowing, it appeared reluctant to fully acknowledge the audit view that these arrangements should be treated the same as borrowing. Most members of the committee reaffirmed their support of the audit view. This report is worthy of close study and I commend it to the Assembly.

The only other comment that I would make is that I am unable to find any meaning in Mrs Littlewood's first dissenting comments and her second dissenting comments. The gist of her comments seems to be that the unfunded superannuation liability is the community's problem, not the Government's problem. I would submit that it is both the Government's problem and the community's problem, and it is the responsibility of the Government and the Assembly, on behalf of the community, to solve it.

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