Legislative Assembly for the ACT: 1998 Week 11 Hansard (8 December) . . Page.. 3206 ..
MR HIRD: My question is to the Chief Minister. A report released by the Australia Institute today suggests that the Territory can fully fund its superannuation liabilities over 12 to 21 years through a one-off capital injection of $4m and then repayments of $25m per year. How is it that the Government has missed this seemingly simple option in its own assessment of the superannuation problem?
MS CARNELL: Thank you very much, Mr Hird. Mr Speaker, the short answer to the question is that, as with most simple solutions, this one is no solution at all. I would appreciate it if particularly the crossbenchers and maybe Mr Quinlan listened to this too. The Australia Institute report, released at the eleventh hour today in order to avoid detailed scrutiny, is in fact fatally flawed in a number of areas, but the most glaring error is the so-called solution to the Territory's superannuation liabilities. The authors of the report have chosen, essentially, to assume away the problem. They have in fact assumed away $1 billion worth of superannuation liability in a single sentence in their report. In one breathtaking sentence - for those who are interested, it is on page 45 - the report says:
The simplest policy is for the government to fully fund liabilities accruing in the future ...
In other words, we will assume full funding of the accruing liability from this point onwards. In that way we have to deal only with the existing unfunded liability of about $700m. It is a breathtaking assumption, because it deals with only half of the superannuation problem - the unfunded liability that has accumulated between the time of self-government and today. It takes no account of the fact that the superannuation liability is increasing at a rate of more than $100m per year - this year, next year, the year after that and on into the future. Towers Perrin estimated that the unfunded superannuation liability will increase from its current level of about $700m to $1.7 billion in about 15 years' time.
Finding a way to fund the current unfunded liability of $700m is only part of the solution. To assume that this is the extent of the problem is to assume away $1 billion worth of liability that will have to be paid for by future generations of Canberrans. Just think for a moment what this assumption means in real dollar terms, not in the theoretical world of academia. I am not surprised that those opposite are embarrassed, Mr Speaker. I would be embarrassed if every time I had come up with figures on anything I had got them wrong. It has happened again.
Mr Corbell: It is a good report.
MS CARNELL: Mr Corbell thinks it is a good report. It is a good report that forgets about a minor problem of $1 billion!
MR SPEAKER: You will have your chance shortly, Mr Corbell. I suggest that you stop interrupting.