Page 874 - Week 03 - Wednesday, 27 February 2013
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Of course, there is always the lease variation charge. Again, in respect of anything that this minister says, you need only look at the lease variation charge to have your doubts confirmed. The lease variation charge has been revised downwards by $4 million in the current year, although no corresponding revision has been made in any of the future years. So it is just a one-off effect but apparently that one-off effect has now happened continuously for six quarters. Some wags have suggested that the lease variation charge is Andrew Barr’s mining tax—promised lots, delivered little. It makes him look a whole lot more like Wayne Swan.
When we look at the lease variation charge, in the half-year it was meant to raise $9.7 million. It raised just over $2 million, a deficit of $7.6 million. For the full year, it is meant to be $23.4 million. That is now down to $19.4 million. The Treasurer is always saying that the bills are out there; they will just have to pay them. They are only payable if the developments go ahead. It is interesting that once people get their assessments, a lot of these developments do not seem to be going ahead. The government has taxed the golden goose. I guess he is just following his former Treasurer, who said, “Squeeze until they bleed but not until they die.”
In other expenses, we see that superannuation expenses have been revised upwards $150 million in the current year. However, they remain unchanged going forward. We all understand the discount rate. Interest expenses increased by $56 million. That is $577 million in interest over the forward estimates. The expenditure on capital works for the current year has seen $250 million of the $812 million originally budgeted pushed to later years, predominantly 2013-14 and 2014-15. Yet again, it is the same indictment that many have already pointed out, including the Auditor-General, that this government cannot deliver on capital works.
We see that capital expenditure has been cut by $41 million over the forward estimates. Under liabilities we see that borrowings have been revised by $1.7 billion since the budget, increasing the total liability at the end of the forward estimates by $593 million to $2.9 billion, an increase of 47 per cent on the current borrowing liability. Borrowings are projected to peak at $3.2 billion in the 2014-15 year. Again, I hark back to the warning of the Auditor-General that the use of borrowings to fund the infrastructure investment program has also contributed to the significant weakening of the long-term financial position since the previous year.
Of course, the big issue is the superannuation liability. We are all aware of the global financial crisis and the fluctuations in the market. But the superannuation liability is currently only 30 per cent funded. However, the government is predicting the funding percentage will increase to 49 per cent by the end of 2012-13, a decrease of $2.39 billion in current year liability.
They expect investment returns below those previously estimated will reduce the probability of funding the superannuation liability by 2030 which, of course, is unfortunate. The government expect to improve the funding percentage by 10 per cent in the current year. Then they have predicted an improvement of only one per cent by the end of 2015-16.
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