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Legislative Assembly for the ACT: 1998 Week 3 Hansard (27 May) . . Page.. 627 ..

MR OSBORNE (continuing):

There is still room to move in cutting expenditure, but we have used up almost all of the easy options. Our areas of overspending are well documented and all are protected by the high walls and razor wire of lobby groups and certain members. Education has been quarantined from any real cuts for the past three years. According to the Commonwealth Grants Commission, the ACT was almost $36m above the Australian average level of spending in 1995-96. Mr Speaker, as I said during the election campaign, I have no problem with this community deciding that it wants to spend more money than other States on education, as long as that money is spent in the classroom. However, what figures we have tend to suggest that too much is spent on an overblown head office. The 1997 review of Commonwealth-State service provision shows that our "out of school" costs for education per student are higher than those of any other jurisdiction save the Northern Territory and that they have been steadily growing. I repeat, Mr Speaker, that I am happy for us to continue spending more money on education, as long as it is spent in the classroom and on the kids.

The Grants Commission also continues to point out overspending in hospital services and welfare. We might also want to have a look at why 10 per cent of the ACT's total housing stock is Housing Trust homes. Mr Speaker, some of these things are linked to the way the ACT developed, such as the overreliance on government housing. Some, like the cost of delivering health services, reflect the easy options taken by past health administrators when they had Commonwealth millions to throw at problems like doctors' contracts. But addressing them now will not be easy for anyone, as they are all areas of high sensitivity and any move to address overspending will be portrayed in the media as an attack on the weak rather than what it really is, namely, an attack on an inefficient administration and middle-class welfare.

So, as I said, Mr Speaker, all the easy options for savings have gone and now we face the hard yards. In amongst the hard yards is a real stinker, something which has been lurking under the rug for years - our unfunded superannuation debt. Mr Speaker, it is not as if we have not been aware of this problem for some time. In 1994 the Auditor-General signalled his alarm at the size of our superannuation debt when it was a mere $316m, or, as the Auditor put it, $1,053 of superannuation debt for each person in the ACT. By 1995 the debt had grown to $578m. It now stands at just under $700m. Over the next 15 years it will grow to $1.7 billion. Let me say it again, Mr Speaker - $1.7 billion. Last year, paying the emerging costs of superannuation set us back about $16.5m. In 15 years' time it is estimated that the ACT will have to find $125m a year in today's costs to meet the emerging costs. To put all those big numbers into perspective, Mr Speaker, the total ACT revenue this financial year is about $1.4 billion. The most expensive department is Health, which chews up about $302m a year. The third largest department, Urban Services, costs about $156m.

I understand that there are different approaches to superannuation liabilities, but the Auditor-General left us in no doubt about how he viewed it when he said:

It is sometimes argued that the level of unfunded superannuation liabilities is irrelevant and that only the level of actual payments which need to be funded during the current year is of relevance. Such a viewpoint is considered to be imprudent.

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