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Legislative Assembly for the ACT: 2004 Week 07 Hansard (Tuesday, 29 June 2004) . . Page.. 2934 ..

available at the time, but rest assured that the territory’s balance sheet is in pretty good shape and we do have the capacity to build those capital works.

Proposed expenditure agreed to.

Proposed expenditure—part 1.8—home loan portfolio, nil expenditure.

MR SMYTH (Leader of the Opposition) (8.07): Mr Speaker, the home loan portfolio is an interesting holdover from the days when the Commonwealth ran the ACT. Perhaps the removal by the government of $33.2 million suggested that there was a bit of a hollow log for the government.

Mr Quinlan: It is a shame that you did not see it.

MR SMYTH: We knew that it was there. The highlights section of budget paper 4 refers to improving the internal management policies for the home loan portfolio to reduce exposure to bad debts and to reviewing the insurance cover for all home loans. As the portfolio grows and builds up equity at the end of each period—at the end of this year it will be $14 million and it will go to $17 million, $20 million and $23 million—is it a hollow log?

Is there a need to keep the money there at all? What is the exposure that we have to cover? Are any repayments due to the Commonwealth? Given the declining number of loans in the portfolio, is it worth keeping it at this level? Perhaps the Treasurer will fill us in on that. Another question is: must these funds be used for housing-related activities. For example, they have been used this time for community housing as well as for housing communities. Apart from that, the portfolio was clearly in a strong position.

MR QUINLAN (Treasurer, Minister for Economic Development, Business and Tourism, Minister for Sport, Racing and Gaming, and Acting Minister for Planning (8.08): Those are questions that probably should have come out in the estimates process. Let me just say that we had an independent assessment done of the home loan portfolio, identified the excess funds and put them to work for the best benefit of those who need them. So, if not now, as of a matter of months ago the home loan portfolio was in balance.

The reason it is not acquitted straightaway is that it is money provided on such favourable terms that we would have to have holes in our head to acquit it immediately. We have, effectively, the capacity to earn investment returns on those funds above the rate that we have to pay on those funds. So, while we are making a little bit of cream off Commonwealth money, we would have to be lunatics to do otherwise. I repeat that, as best as I am aware, with a modicum of conservatism in the assessment, the home loan portfolio was in balance several months ago.

Proposed expenditure agreed to.

Proposed expenditure—part 1.9—InTACT, $3,955,000 (net cost of outputs) and $10,365,000 (capital injection), totalling $14,320,000.

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