Legislative Assembly for the ACT: 1998 Week 11 Hansard (9 December) . . Page.. 3351 ..
ACTEW - Sale
MR STANHOPE: Mr Speaker, my question is to the Chief Minister. Given the Chief Minister's commitment to accrual accounting and the ACT's move towards implementing that method, does the Chief Minister accept that in financial and government circles it is now generally recognised that the accrual methodology provides a more realistic picture of a government's fiscal position than do traditional cash-based measures? If she does accept that view, how does she explain that ABN AMRO based its case for the sale of ACTEW on a cash flow analysis? Is it not the case that the use of such methodology, as identified by the Australia Institute, fatally flaws the ABN AMRO report? Does the Chief Minister agree that, having relied on such a fundamental flaw, the Government has only compounded the error by attempting to justify the sale of ACTEW by using a mixture of cash-based and accrual methodologies?
MS CARNELL: Mr Speaker, I think that Mr Quinlan should have helped on this question, because I know that Mr Quinlan would know the answer to this question. Yes, the ACT Government stands absolutely by accrual accounting when putting together such important things as operating losses, financial positions and whole-of-government statements. In fact, the ACT is leading Australia. It was wonderful to see in this Auditor-General's report the Auditor-General congratulating the ACT Government - - -
Mr Stanhope: Is he the local economist?
MR SPEAKER: Order!
MS CARNELL: Thank you, Mr Speaker. I have to say that Mr Quinlan was very pleased to approve the reappointment of the Auditor-General just recently. The Auditor-General makes the point that the ACT is progressing very well in this area and is complying with Australian accounting standards in coming down with an unqualified audit, which is great news. Yes, I totally support that.
With regard to the valuation by ABN AMRO, it does use cash flow information and a weighted average cost of capital discount rate, which, I have to say, is the way you value things. That is a totally different perspective from the whole-of-government financial situation - assets, cash flow - - -
Mr Corbell: Professor Carnell. Here we go, here we go!
MR SPEAKER: Order! The Chief Minister was asked a question by your leader, Mr Corbell, and she is answering it.