Page 1146 - Week 07 - Tuesday, 22 August 1989
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Naturally, we would like to set aside the full $60m each year so that future governments do not have to meet the superannuation costs arising from the provision of government services in past years. But the Government - indeed any government - has to have the capacity to do so. The Commonwealth suggested adding to the ACT's general revenue grant an amount of some $47m in 1988-89 to be paid back to the Commonwealth's consolidated revenue, together with the $13m generated from the ACT's revenue. The Commonwealth would then pay superannuation benefits as they emerge. However, that seemingly simple solution was an unsatisfactory option. It would have placed the ACT in the same relationship with the Commonwealth for superannuation purposes as a Commonwealth statutory authority like Telecom or Australia Post.
So the Government is currently negotiating with the Commonwealth on an alternative arrangement. The Commonwealth will pay benefits to retirees and meet the full costs of superannuation liabilities accruing until 1 July 1989. The proportion of the emerging benefit that arises from service with the ACT Government after 1 July 1989 will be reimbursed to the Commonwealth by the ACT on an annual basis. Obviously this amount will be very small in the first few years and will be based on actuarial assessments.
Allowances made by the Grants Commission in future reviews for superannuation expenditures will be available to the ACT. The ACT can then decide within the limits of its resources how much it wishes to set aside for its superannuation liabilities. Furthermore, the payments formerly made to the Commonwealth consolidated revenue fund by ACT agencies will in future be retained by the ACT.
The Commonwealth treated these payments as revenue. The ACT will set the funds aside as part of its reserves and invest them. We will then have the necessary funds to reimburse the Commonwealth for benefits paid in future years to former employees of these agencies. We shall, of course, be keeping this major financial issue in the area of Commonwealth-ACT relations under close review because of the continuing changes in relevant Commonwealth legislation.
Mr Speaker, I now wish to turn to the question of debt. Prior to self-government, a debt profile was established for specific agencies, including the electricity and water authority and the ACT Housing Trust. Principles had also been established for determining an appropriate level of historical municipal debt. The servicing of debt in all of these instances is already being met from the income streams of the respective agencies.
I have also put to the Commonwealth the proposition that the Territory should start with a zero debt position for assets that produce little or no income to service debt. This mirrors the agreement reached for the Northern Territory. In this way, the level of debt in future will be under our control. As for superannuation, the Commonwealth Grants
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