Page 878 - Week 03 - Wednesday, 27 February 2013
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(ii) delay some projects;
(iii) continue to review the capital program; and
(iv) further drive efficiency in the ACT Public Service;
these measures will be outlined in detail in the 2013-2014 Budget; and
(e) the Budget is on path to deliver a net operating surplus by 2015-2016; and
(2) calls on the Government to:
(a) manage the budget in a measured and responsible way to ensure the Territory can fund significant and necessary infrastructure projects; and
(b) ensure the budget position is sustainable for the long-term to continue delivering on key initiatives, including:
(i) high quality disability services through the NDIS;
(ii) high quality education through the Gonski reforms;
(iii) priority infrastructure projects such as light rail;
(iv) a new Northside hospital; and
(v) other key initiatives outlined in the Parliamentary Agreement.”.
The amendment does not disagree with the first part of the shadow treasurer’s motion, but it tidies up some of his language which, it would be fair to say, was just a little sloppy. It clarifies why Treasury adjusted the net operating balance in the pre-election budget update which, as we have discussed in this place on a number of occasions, is almost entirely to do with the change in the discount rate on future superannuation liabilities.
Just to put some perspective on this, the discount rate on 30 June was 3.41 per cent. This compares with the long-run average of six per cent. As I have indicated about four times in question time this week and earlier this month, superannuation is, indeed, a long-term liability with, amazingly, a long-term funding strategy. The liability will be volatile, and will, of course, depend on the prevailing financial circumstances of the day and, in particular, the state of the investment market.
It is important for members to understand that the bond rate assumption does not change the underlying nature of the ACT superannuation obligations or its funding requirements. It is simply a point-in-time, present-value calculation of the projected future cash flows. It is for this reason that a consistent long-term bond rate is used for budget purposes to minimise volatility from budget to budget which would hinder the long-term assessment and potentially impact on the allocation of budget resources.
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