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Legislative Assembly for the ACT: 1999 Week 2 Hansard (9 March) . . Page.. 410 ..

MR KAINE

what the level of expenditure should be? The level of expenditure is that which is required to implement the policies that the Government came to office on and the level of revenue is that level of revenue which is required to fund it. Since your operating account is supposed to be in balance, you certainly should not be undercollecting on your revenue. But, then, maybe you should not be overcollecting either.

What assets should the Territory maintain or sell? If you are asking me whether the Government should sell any more assets, I would say, in broad answer, no, not unless the Government can come up with some justification for flogging off more assets. The Government got the answer to that in connection with ACTEW. If it is not the will of the Assembly and the community that ACTEW should be sold and if we have got, as has already been pointed out, the Chief Magistrate saying that 30 per cent of his budget is rent that he is paying for a building that we once owned and we flogged, that raises the question very seriously whether we should be selling off our assets. I do not know the answer to that question, but the general proposition that I would put to the Government is that it sell no more assets unless it can come up with a very convincing argument to justify it.

Let me get to the really good question of the level of debt and of any new borrowings which the Territory should incur. The bottom line about borrowing is, first of all, that you do not do it to fund your operating account, although I noticed that the Chief Minister did make some comment about having to borrow to continue to pay our bills. If that is what she intends to do, she is not operating in accordance with any convention relating to public accounts that I have ever heard of. You should not be borrowing to fund your operating account. You should only be borrowing to fund capital works and, even then, you should only be borrowing to fund capital works of such a nature that they have some potential future payback. Borrowing, for example, to maintain your road asset structure is not necessarily a good thing because it does not guarantee any return on your investment in the future. If the Chief Minister is looking for that kind of basic guidance on the structuring of budgets, I offer that to her, for what it is worth.

I turn to the importance of the Territory retaining its current AAA credit rating. I have not yet been convinced that that is at all essential. Many States and Territories in Australia have a credit rating far below that and I have not seen them going bankrupt yet and I have not seen them being unable to borrow. Of course, we are in good shape! We have got enough money that we can lend ours! We have a AAA rating, so we can lend our money to Coles Myer and the like. Why we would do that is absolutely beyond me. If we have such surplus money that we can do that, I suggest that we should be fixing the health problem and a few other things as well.

Turning to whether the current Government and future governments should strive to eliminate the operating loss and, if so, by what year: The answer is yes, and now. Why would you perpetuate an operating loss when you have to fund it in some fashion and the only way you can fund it is by taking money out of the taxpayers' pocket? So, the answer to the question is that you should certainly strive to eliminate the operating loss. The operating loss should be zero. I would not encourage the Government by saying that they should strive to reach a zero operating loss by the year 2010 or 2020. I think that it

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