Page 2152 - Week 06 - Thursday, 26 June 2008
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though the number of clients is smaller. What we were told in the estimates was that at this point 44 per cent of the loans in the portfolio either are in arrears or take advantage of the deferred assistance program and we were assured that the majority of them were deferred assistance rather than arrears.
Currently managing the portfolio given the extent of impairment across the portfolio makes the portfolio commercially unattractive and we were given assurances that the government has no intention of selling the home loan portfolio. The committee was finally told that the portfolio had possibly 14 years left until all the loans are repaid. I would judge that the portfolio continues to be managed satisfactorily even though the cost of administering each of the remaining loans will increase as there are fewer loans in the portfolio, but that of course is unavoidable.
Proposed expenditure agreed to.
Proposed expenditure—part 1.8—Shared Services Centre—$5,666,000 (net cost of outputs), $6,437,000 (capital injection), totalling $12,103,000
MR SMYTH (Brindabella) (9.30): The Shared Services Centre was announced as part of the slash and burn of the Stanhope Labor budget in the 2006-07 year. It was envisaged as a means of bringing together a number of the back office services into a common platform across the ACT government.
I think it is worth recalling that this initiative of centralising back office services onto a common platform was, of course, started by the former Liberal government, first with the provision of IT services through establishing InTACT and then through the centralising of procurement services. These initiatives meant that the Stanhope government had a very sound platform on which to extend this provision of common services.
There are claims that the implementation process has proceeded satisfactorily to this point. We are well aware of the issues, however, with the provision of the full suite of services set out in the initial tender process, such as the management of the long service leave matters. I am aware of continuing concerns in Western Australia, for example, with the project to implement a shared services model in that state. The Western Australian Auditor-General reported in June 2007 on the progress with that project—and what a concerning report that was. The project had been delayed such that it was two years behind schedule. The commencement of the full harvesting of annual savings was pushed back from July 2007 until July 2009 and, while the initial cost of this project was $122 million, the estimate had been revised to $198 million.
I mention this information not to suggest that the project in the ACT has experienced or is experiencing similar issues; rather, I want the people of the ACT to be aware of what is happening elsewhere and to learn from it so that we avoid similar problems in the ACT. In this context I note that the issue of unanticipated costs of going down the shared services route has been an issue in Western Australia, such that the auditor drew attention to this impost on using departments and agencies, and—surprise, surprise—this issue has now arisen in the ACT. We know that the implementation cost in the ACT has exceeded the initial estimate by nearly $2 million or 20 per cent and clearly these additional costs will reduce the returns to the community from the project.
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