Legislative Assembly for the ACT: 2002 Week 5 Hansard (8 May) . . Page.. 1302..
MR HUMPHRIES (continuing):
MR QUINLAN: His name was Phil Basche-nice man. It is important for us to accept that there has been a continued reduction in capital markets over some time. In the Canberra Times a few days ago the Leader of the Opposition was quoted as saying-if he did not say it, it is mentioned in the article in which he is mentioned, but he did refer to it on radio-that September 11 was the influence. This is not the case. Capital markets have been declining for some time.
The Standard and Poor's 500 index would show that over a considerable period there has been a decline in capital values, to the point that insurance funds this year will show negative returns. Certainly September 11 caused a sudden downturn, which was followed by an equal upturn to the line of best fit. But unfortunately over time the line of best fit has been a decline.
I am very grateful to the ABC and to the commentator, Phil Basche, for the discussion this morning, because it bears out the points we were trying to get through to those opposite yesterday. Mr Blessington's point that we should not have measured this thing in October but should have measured it in December dissolves to a nonsense. The commission of audit evaluated superannuation, got a negative $44 million and said, "Hang on. We had better take account of that. We had better go to a reasonable assessment."
It went to a reasonable assessment of zero, which is not a bad assessment, given that many funds are looking forward to negative returns this year. If it was measured in December, you would have got virtually the same result. You might have got a higher figure than $44 million, but then you would not have made so much of a discount on that figure.
I am eternally grateful to the ABC and to the commentator, Phil Basche, for verifying those matters we tried to put forward in this place yesterday.
MS GALLAGHER: Treasurer, how will you respond to Mr Humphries' little wager in the Canberra Times on Tuesday this week?
MR QUINLAN: Mr Humphries did talk about a wager in referring to the overall bottom line. Being a little wary of the last-minute accounting adjustment or some damn thing that might come out and corrupt the bottom line as it did in 1995-96, for example, I am willing to have a small wager that our investment returns for this year will be closer to zero than to the $63 million that was included in Mr Humphries' budget. I am prepared to wager that.
Of course, the figure Mr Blessington put forward giving the $59 million Mr Humphries has referred to ignores investment losses. As Mr Humphries has used that figure, I am assuming that he still believes to this day-he may have changed his mind after this morning's radio interview-that we are going to make a $63 million return on our investments this year. In the words of Access Economics, the odd $63 million is nothing untoward.