Legislative Assembly for the ACT: 1999 Week 1 Hansard (2 February) . . Page.. 29 ..
MR SMYTH (continuing):
We have already heard people saying that the Chief Minister is running a scare campaign. If we do not sell ACTEW and we do not meet the liabilities in one way, as the Chief Minister rightly says, we have to meet them in another way, and she is correct. If we meet them in the way of Ted Quinlan's report, we will take the $40m as a dividend, we will still continue to spend it in the budget, we will not find any interest to cover the debt for the $300m that they have taken as the starting block and at the same time we will pick up this mysterious $9m tax windfall that we have. I am sure that the Federal Government will take note of Mr Quinlan's report and look at this $9m tax windfall that we are getting.
It is very important that we keep all of this in context. The committee has, in fact, taken the easy way out. When confronted with the Territory's largest and most important financial issue, Mr Rugendyke, it has squibbed it on the hard decisions. Even worse, Mr Rugendyke, what they have said is that we can afford to live in cuckoo land. There we are, off with the pixies, up in the clouds, because we are going to base it on the newest budgeting and accounting precept of optimism. I have never read about optimism in a budgeting handbook or an accounting handbook. Instead of being careful and making realistic assumptions, we make optimistic assumptions. If you are optimistic, you can rip $500m out of your account. Be optimistic; go forth and rip another two grand off the budget limit on your credit card; it is easy! In fact, Mr Speaker, they go on to say that you can do that and it will not have any effect whatsoever on the budget. We will give ACTEW a debt, we will make ACTEW pay interest on this debt, unless the committee says they do not have to, we will double-spend the dividend and we will have this mysterious $9m. What we can do is go on pretending that there is some magical reason why a government owned entity like ACTEW can then not operate as efficiently and effectively as the rest of the utilities market. And then we have this allegation - somehow untested, quite bizarre and most likely untrue - that ACTEW is somehow gaining a tax benefit. I think Mr Quinlan should explain himself further on that issue.
Mr Speaker, this committee was set up to answer some of the concerns that Mr Rugendyke, Mr Osborne and Mr Kaine had about the sale of ACTEW and how we would address the superannuation liability. The Government in its submission put forward the options and it believed that the best option was that we avoid the double whammy of unfunded superannuation that occurs in about 2020 and peaks with an outlay of some $200m. If the Opposition believes that in a budget of about $1.5 billion we can in the year 2020 pull $200m out of services, $200m out of looking after the people of the ACT, and get away with it they are wrong. What are you going to do? Pull $200m out of education or pull $200m out of health? But in the land of optimism you can do this; this is optimistic economics.
Mr Kaine: You are on the optimism bit, too. You are a quick learner.
MR SMYTH: Here we go! Here comes the master of economics! The evidence says that the best way to meet this is by full funding. Full funding, an option not discussed in this report in any detail or depth, minimises the risk for the government of the day, of whatever persuasion it might be, and maximises budget flexibility. It also means that we are not passing on to other generations our debt and the inadequacy of this place