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Legislative Assembly for the ACT: 1997 Week 13 Hansard (2 December) . . Page.. 4294 ..

MRS CARNELL (continuing):

The Government acknowledges the role the committee has played in helping to achieve open and accountable government. Mr Berry is obviously not the chair. This Government, as always, responds to the committee's recommendations in a positive manner. This response provides advice to the Assembly on the committee's comments and recommendations.

The committee's report comments that the Government has ignored the basic audit opinion that the PTE sector recorded a loss after payments to the Government were taken into account, a situation exacerbated in the 1997-98 budget where the Government extracted an extraordinary dividend from ACTEW. That is at paragraph 2.7. This is patently untrue. The audited operating results of the PTE sector and PTE payments to the Government in the form of dividends or tax equivalents are entirely separate matters. The PTE sector reported an operating profit of $35.1m for the 1995-96 financial year. This result reflects well on their operation. The payments made to the Government will not influence their operating result. Obviously, the better the PTE sector performs, the greater its capacity to make payments through tax equivalents and dividends to the Government. The special dividend of $100m from ACTEW is a return of capital to the Government, which is the shareholder. This special dividend will not impact on the operating result of ACTEW or the PTE sector. It will also not have any impact on the whole-of-government operating result. This is a capital transaction.

The magnitude of the overall Territory loss has been improved for the 1996-97 year. The original budget forecast was for a loss of $231m, or about $2,000 per household. When the 1997-98 budget papers were prepared, the 1996-97 outcome projection was a loss of $190m, or around $1,650 per household. While the final outcome for the whole-of-government is still subject to audit - I think that, since this speech was put together, it has been audited - the operating loss for the Territory this year is $153m, which is a significant improvement on the $231m that was the original budget forecast. That is an outcome, I have to say, that we on this side of the house are very proud of. This indicates that the range of strategies the Government has adopted are moving the result in the right direction. The experience of this would indicate that the size of the forward year losses should be reduced. The Government is continuing to explore options for addressing the Territory's operating loss. There is no simple solution that will resolve the Territory's operating loss. Many different measures, combined with a continued change in management approach, will assist in addressing the loss.

The Government has already implemented a range of measures, some of which are acknowledged in the Auditor-General's report - in fact, at paragraph 2.2.8 - and in the committee's report, at paragraphs 2.18, 2.19, 2.25 and 2.26. The committee also noted, at paragraph 2.45, the significant contribution by Health, Education and Urban Services towards the operating loss of the Territory. The Government is continuing to pursue initiatives in these areas. Some of the additional measures the Government has introduced, since the Auditor-General's report, to address the operating loss include reviewing ACT policing arrangements with the Commonwealth; ongoing efficiencies in Health through further initiatives in the purchaser-provider area; review of superannuation for new entrants into the ACT Public Service; competitive tendering and contracting in social policy-volunteer types of areas; the VFT; and opening up Canberra's airport to international charter traffic.

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