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Legislative Assembly for the ACT: 1999 Week 1 Hansard (2 February) . . Page.. 6 ..

MR QUINLAN (continuing):

Before I close, Mr Speaker, may I be permitted to thank a few people. I wish to thank the other committee members, Mr Osborne, Ms Tucker and Mr Hird, all of whom at times, I must say, stayed calmer than I when certain frustrations arose in trying to complete this job. I wish to thank the secretaries, Bill Symington and Beth Irvin. I would like to thank my staff, Adrian Kirchner and Geoff House, who did a lot of work in relation to this report and, let me say, on a dollar-for-dollar basis it is the best value we have had in a year in relation to this particular exercise.

I would like to thank the Australian Government Actuary and staff. I know they sacrificed weekends and holidays and struggled against a paucity of information. I would like to thank Mr Bill Humphries of Towers Perrin who, despite moving office and despite it being his Christmas and New Year break, strived to provide us with information and provide us with answers to some of our questions. I would like to thank the Australia Institute for their report for, although they are only local economists, they somehow managed to decimate the internationals, the World XI from ABN AMRO, in the great debate, who, coincidentally, sounded very local to me when they spoke. I particularly want to thank all those other people who made submissions to this inquiry over little time, and those who appeared before us and helped us so much to understand the wider picture which we now do understand, and this report reflects it. I very much look forward to Mr Hird's decimation of our report.

MS TUCKER (10.55): This is a very important report. Even though the committee was forced to do the work in an unacceptably short time, there were a number of significant submissions which were very useful to the committee's work. The majority of members of the committee are now of the view that there are a number of ways of dealing with the superannuation liability and that the Government's proposal to sell ACTEW is not the best or only option. There has been an obvious reluctance shown by the Government to support serious analysis and there also appears to have been some manipulation of figures to suit the Government's privatisation agenda.

Evidence from the Australian Government Actuary regarding assumptions of rate of return of investments showed clearly just how inexact any estimation or prediction has to be. This is the nature of economic predictions and it is a nonsense to pretend otherwise. The huge fuss made by the Government and the selective quoting of correspondence from the AGA by the Government to defend their reports was predictable and consistent with their tactics. As I understood the AGA's evidence, it was making the point that indeed there are assumptions being made in any estimations of liability and indeed there could be a difference of hundreds of millions of dollars. If we are to be given an objective picture it is essential that variables and assumptions be clearly articulated. Unfortunately, the Government neglected to do this, and, while they are, of course, entitled to make use of the most conservative or pessimistic estimations of rate of return in their modelling if they wish, they do need to be very clear that that is what they are doing.

Economic modelling has to be dependent on assumptions. It is most inexact in its nature. An example of this can also be seen in the chart on page 24 of the report showing the various figures the committee was given for discount rates for superannuation and ACTEW. The Government itself and its consultants were not even consistent on

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