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Legislative Assembly for the ACT: 2001 Week 1 Hansard (14 February) . . Page.. 161 ..
MR HUMPHRIES (continuing):
all right to have good financial management within the general government sector but not with the PTE sector? Mr Quinlan might be able to explain that when he stands.
The second principle states that when maximum levels of general government sector assets have been achieved we have to maintain a maximised position. Now, the notion of maximising net assets, I think, is extremely vague. We should look behind that to see the assets and liabilities that comprise the territory's net assets. The opposition has not defined the term "maximising net assets". Mr Quinlan does so in this debate. It's only sort of part-way there towards understanding what he is trying to get at.
When the credit rating agencies examine the financial health of an organisation, including the ACT government, they examine financial liabilities, which of course are most of the liabilities, and the financial assets which are held to cover those liabilities. They do not consider the net asset position.
Mr Quinlan: What?
MR HUMPHRIES: That is my advice, Mr Temporary Deputy Speaker. They do not consider the net asset position. In fact, the word "not" in my brief is in capital letters.
Mr Quinlan: Who wrote your brief?
MR HUMPHRIES: Some very experienced member of my department, Mr Quinlan. I can assure you it was not Mr Smyth, so do not worry.
MR TEMPORARY DEPUTY SPEAKER: Chief Minister, do not encourage Mr Quinlan.
MR HUMPHRIES: Yes, I will certainly try to avoid that, Mr Temporary Deputy Speaker. The second principle also is very confusing. We are told that we must first maximise the net asset position of the general government sector. Then, when maximum levels of the general government sector assets have been achieved, they are maintained. What does that mean, Mr Temporary Deputy Speaker?
Again I would like to quote from the notes that have been provided to me. I do not profess to be expert in this, but I will quote the notes that have been given to me. They say this:
Obviously the Opposition is having trouble understanding the difference between assets and net assets. They assume that a maximum net asset position is achieved through an optimal level of assets, but they do not take into account the level of liabilities on the balance sheet. It would be financial mismanagement to limit government policy to the improvement of one side of the balance sheet only.
I also make reference to the fact that again this amendment of Mr Quinlan's deals only with the general government sector. Why is the PTE sector not included? Perhaps he can explain that. We need to bear in mind, of course, that ACTION, ACT Housing, ACTAB and bodies like that are all in the PTE sector, and they ought, therefore, to be taken into account, I would have thought, in the laying down of prudent financial principles.
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