Page 2638 - Week 08 - Thursday, 14 August 2014
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There are many other matters, but in the spirit of brevity I will leave it there on the TAMS portfolio.
Proposed expenditure agreed to.
Territory Banking Account—Schedule 1A, Part 1.21—$214,000 (capital injection), $82,159,000 (payments on behalf of territory), totalling $82,373,000.
MR SMYTH (Brindabella) (5.45): I will go straight to the transcript of 16 June on page 223:
MS PORTER: On page 76, under accountability indicators, point 3 in the notes says:
Raising all new Territory borrowing requirements in accordance with approved borrowing limits and guidelines.
Could you talk to us a little more about that and what is going on?
What is going on is that the debt is going up and the interest bill that accompanies that is going up as well. This is a budget that takes debt through the budget papers and into the outyears to almost $4.7 billion, with really no indication of when the debt will come down or how the debt will come down. The table on page 294 of the budget papers shows the total external territory borrowings; they are about $4.7 billion and the gradient is ever upward. Page 293, under “General government sector”, states:
It is estimated there will be a net increase to GGS borrowing of $505 million in 2014-15. Over the Budget and forward estimates period, the forecast total net increase in GGS borrowings is $1.094 billion to meet budget funding requirements.
It is interesting to see what happens when you go to the budget portfolio statement that contains the territory banking account, page 78, as you are looking through the financials. On page 75 it says that the functions of the territory banking account include:
• … managing and reporting on the investment assets and borrowing liabilities of the TBA;
• raising new Territory borrowings as required …
What people forget is that if you are not paying it back quickly and you are just paying off the interest constantly, there is a lot of money going out of the budget.
Over the life of these budget papers, there is a 40 per cent increase in the borrowing costs. They go from $164 million to $233 million by 2017-18—almost a quarter of a billion dollars in interest payments in 2017-18. That is significant money. We have already seen it in the ACTEW borrowings, which account for a large proportion of the government debt. What we have got is just interest growing with really no
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