Legislative Assembly for the ACT: 1999 Week 4 Hansard (20 April) . . Page.. 958 ..
Mr Smyth: Where is it all coming from? Where does the money come from?
MS CARNELL: Well, where does the money come from? I hope Mr Quinlan would know, but I am not sure that anybody in this Assembly has quite come to grips with it yet, at least not those on the other side of the house, that the capital works budget must be funded out of an operating surplus. There is no other way to fund it, apart from borrowings.
Mr Quinlan: What about depreciation? There is over $100m worth of depreciation in your budget.
MS CARNELL: Without an operating surplus, there is not the cash to spend on the capital works budget without borrowing.
Mr Quinlan: Cash can exceed operating surplus by virtue of non-cash items. Do not mislead the house.
MR SPEAKER: Order! You will have a chance to respond in due course, Mr Quinlan.
MS CARNELL: What we must aim at in the future, Mr Speaker, is achieving an operating surplus equal to our capital works budget. It is at that stage that our budgetary situation in the ACT becomes sustainable in the longer term. That is something that I would have hoped that this committee at least would be starting to come to grips with and realising that you cannot just spend more money in capital works without having the cash to pay for it. I make the point, "in cash" because, as we know, capital works does not fall to the bottom line in the budget, but it does require cash to pay for it. I think this is an issue that everyone in this Assembly needs to come to grips with.
This city is not growing at the same sorts of levels as it has in the past. It has been through some reasonably tough times. Certainly, we are very pleased now that growth is back and bubbling along, and population growth is at least into the positive figures. The committee report which is on the table at the moment seems to believe that we can just spend any amount of money on capital works and somehow the money or the cash to pay for it will materialise. It will not materialise unless those opposite and those on the crossbenches believe we should borrow always for capital works.
Mr Speaker, we on this side of the Assembly believe very strongly that we do need to get to a sustainable level of capital works - in other words, the level of capital works that we can fund from within the budget. Again, I am absolutely amazed that any member of this Assembly would argue with that proposition. By the way, before Mr Quinlan makes a comment about borrowing on capital works, I have absolutely no problems about borrowing on capital works that actually produce an income stream. There are no problems there at all. But, as members would be aware, a very large percentage, in fact virtually all, of our capital works budget does not do that at all and on that basis must be funded from cash flow from elsewhere in the budget.