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Legislative Assembly for the ACT: 1997 Week 13 Hansard (2 December) . . Page.. 4321 ..

MR WHITECROSS (continuing):

these matters ought to be made in the context of a comprehensive policy, not as ad hoc, one-off decisions, as were seen in previous budgets - and that the Standing Committee on Public Accounts in the next Assembly should review this comprehensive policy on management of interest and insurance risks, with a view to establishing its costs and benefits.

Certainly, we were not suggesting, as Mrs Littlewood has suggested in her dissenting report, that we conduct a further review of the lease and lease-back arrangements in relation to the Magistrates Court building or the Dame Pattie Menzies Building. In relation to those matters, we have done what we can. We will have to wait till the end of the 15-year term of these arrangements to conclude definitively whether they have been a cost or a benefit to the ACT community.

MRS LITTLEWOOD (5.50): Unfortunately, I find that I am not able to agree with some of the findings or the recommendations of this report, as was mentioned before by Mr Whitecross, for a couple of reasons. I think the report is somewhat flawed, in that it failed to understand the key issues, I believe, and did not really analyse the costs and benefits of financial arrangements for these assets; it really just had a bit of a grumble. I think effective management of interest rate risk was a central issue of the lease-back financing arrangements. However, the alternative favoured by the majority of the committee, the reliance on short term, seems to have the day, I suspect. I do not think it shows any awareness of interest rate management at all. Although the benefit of the Government's approach was explained to the committee, such information seemed not to suit the purpose of the majority of members.

Similarly, I think the majority failed to understand and acknowledge the reasons for the major reforms in relation to insurance risk which the Government has initiated. These reforms were introduced in the 1997-98 budget; and insurance of the two buildings, considered in this report, is consistent with policy framework. The Government's commercially sound policy on managing insurance risk contrasts with the neglect, I am afraid to say, of the previous Government; but the majority of the committee did not really want to see that. Hence, the issues are not properly addressed in the report. Given that we had several months to weigh the costs and benefits of the lease-back arrangements for the Magistrates Court building and the Dame Pattie Menzies Building, the committee did not refute the evidence that was provided; it just chose not to accept it, I suppose.

The recommendation by the majority of the committee to undertake a further reference is unnecessary and unjustified. I think, quite frankly, it is a bit of a waste of taxpayers' money to spend more money and more time looking at something that has already been looked at. I think the material that was provided in relation to the current reference has identified the clear benefits of the financing arrangements entered into for the two buildings. The majority appears to agree with but not acknowledge that governments wish to retain ownership and control of these assets. It is for those reasons that I feel that I could not support it.

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