Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .

Legislative Assembly for the ACT: 2000 Week 4 Hansard (28 March) . . Page.. 942 ..

MR QUINLAN (continuing):

difficulty getting the right tradespeople or getting particular work done. That does not portend well for active post GST activity. Only time will tell. Nevertheless, we expressed that reservation in relation to the budget.

At the time of its publication the draft budget showed an operating surplus. (Extension of time granted) The draft budget showed an operating surplus of $2.1m, which is within a few thousand dollars or so of the forward estimates included in the prevailing budget. The Treasurer has since advised this place that he had issued instructions that the budget should meet that particular target that gave rise to the back in the black claims when the last budget was published and tabled back in May last year. I have to say that my observations of the draft budget do not coincide with the claim that it was the function of a full, rigorous budget round. It looked very much to me, in the time we had, that it was the previous forward estimates with some adjustments made. Nevertheless, at the time of the production of the draft budget we had not done the budget round. When we questioned the Treasurer in relation to the time available and the process itself we were told something like, "Well, if it was good enough for all these public servants to work through Christmas, it should be good enough for you to work as well". I am not sure that I see evidence of a complete process there, and I am happy to be contradicted on that particular observation.

We notice that since the time of the draft budget we look like receiving something in the order of $21.3m in additional Commonwealth funding. In relation to that, the committee recommends that the Government, during the creation of its genuine budget, look towards examining the cash flow processes as opposed to the operating statement to try to start for the first time contributions to the superannuation liability that are not pulled out of ACTEW or are not just contributions made by the business enterprises in the place; that we actually have some real, genuine ongoing process of contributions to the superannuation liability out of the Government's operations.

I want to concentrate to some extent on the bottom line. Although it is claimed that with this budget we will be back in the black, it is my contention that that is a very dangerous conclusion to make. In fact something in the order of $74m is either interest received on our superannuation that we have set aside or it is this notional adjustment of a previous correction of the superannuation liability, and that has been brought above the line for the first time this year. It now becomes a credit, a revenue if you like, that makes the operating year look like we are performing at about break even. Now, that is simply not the case.

The best example I can give you is if you own a business and you break even on everything you do other than earn interest on the superannuation you have set aside for your employees, according to actuarial advice, and you make some profit, you make some earnings, on that interest. You cannot spend that money. You cannot. You cannot declare a dividend and you cannot spend that money, otherwise you are eroding the superannuation that you have put aside. The measurement we make of the superannuation liability is that amount of money we need now to invest and earn interest on to pay bigger sums of money later. If we spend the interest now, then what we put aside will be inadequate to pay the larger sums of money later. It is just purely how we measure the net present value of the superannuation liability.

Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . .