Legislative Assembly for the ACT: 2000 Week 12 Hansard (7 December) . . Page.. 3854..
MR QUINLAN (continuing):
Speaking of grains of salt, I would counsel members to look at the level of the surplus very carefully and take it with a grain of salt. A large slice of this surplus is a paper profit on paper investments held against the superannuation liability. When I have asked about this, I have been informed that it is something in the order of $33 million. That $33 million, at least in part, is a function of us having offshore investments which have appreciated in Australian dollars as the Australian dollar has depreciated. In the last three or four days we have seen the Australian dollar recover, so I imagine that we have blown tens of millions of dollars, if that is the only explanation.
I counsel the government in its financial reporting from this point on to work towards separating the measurement of their operating performance from these particular vagaries. That $33 million could be hanging over a future Treasurer's head and should there be, as we say in the trade, a market adjustment, there could be an equal or even larger reversal of that amount. If we keep dropping it to the bottom line and making very short - term political capital out of it, then there is a danger that in future we are going to get bad numbers on paper when the economy is still going well.
Mr Acting Treasurer, it frightens me. Nevertheless, if you are going to put on trainer wheels and speak for the Treasurer then I think -
Mr Smyth: We all have to start somewhere.
MR QUINLAN: I was very impressed with the way you handled it. We need to take a good hard look at how we report, and how we report the real operating surplus or deficit versus the end figure. Accounting standards limit us. Accounting standards have been screwed up, quite frankly, in recent years in reaction to the 1980s. They may normalise, but pure accrual accounting applied to the books of the ACT, although it sounds nice, has some danger. It is not the perfect answer. We need to look at our cash position, along with our declared profit position, and we need to look at our pure operating performance versus the bottom line that falls out.
Hopefully, the select committee will be making recommendations along those lines, and I hope the government takes notice of them. I hope that we can avoid fanfaring a $70 million surplus when half of it at least can be illusory.
MR SMYTH (Minister for Urban Services): For the information of members, I present the following paper:
2000 - 2001 capital works program - Progress report - September quarter.
I ask for leave to make a short statement.