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Legislative Assembly for the ACT: 1999 Week 11 Hansard (19 October) . . Page.. 3262 ..

MS CARNELL (continuing):

Based on the analysis conducted, the net amount expected to be recovered through cash inflows and outflows arising from the future operation of the stadium was $14.4m less than the carrying amount for the stadium. Consequently, the carrying amount was written down by $14.4m. This reduction in the carrying value is reflected in the financial statements for the Bruce Property Trust. The calculation took a conservative analysis of the expected net position for the inflows, less outflows over the next 30 years, and was reviewed by the Auditor-General. However, as they were estimates that cover a 30-year period, the estimates were subjective and difficult to confirm through normal audit processes; hence the matter of emphasis is in those particular accounts.

The application of the recoverable amounts test applies to all entities, except those that are not for profit. All the entities that the Government has that are for profit or are not for profit, shall we say, fall into this particular bracket. Regardless of whether non-current assets are valued as at substantially the same date or on a progressive basis, the recoverable amounts test applies to non-current assets as at each reporting date.

Before those opposite say, "Shock, horror, this is a dreadful scenario", let me say that the recoverable assets test also allows for upward revaluation, an increment, when the net present value of the current cash inflows and outflows exceeds the current carrying amount recorded on the balance sheet.

It is probably appropriate to look at another example of where a RAT test has been used very recently on a stadium. Interestingly, the value of Australia's premier Olympic venue, Stadium Australia, has been slashed by $247m on the same basis. That meant that the facility's owner recorded a $111.2m loss for the 1998-99 financial year.

Additionally, it is interesting to note that Stadium Australia made an operating profit of $5.1m for a similar operating period as Bruce Stadium. The accounts of Bruce Stadium Pty Ltd showed an operating loss of $2.5m, which - given the number of revenue sources that, as we all know, were not achieved and the smaller events available compared to Stadium Australia - was not a bad effort. Look at what the scenario is in New South Wales. Stadium Australia is now valued at $165m.

Mr Kaine: I take a point of order, Mr Speaker. Will you rule on the question of relevance? I did not think the question was about Stadium Australia.

MR SPEAKER: No, but there is a comparison being made and it is in order.

MS CARNELL: The question was about the reason for the $14.4m write-down. I was explaining that Stadium Australia has been written down by $247m this financial year. It means that Stadium Australia is now valued at $165m. When you consider that the construction costs were approximately $690m, you will see that the situation for Bruce Stadium is very much in line with other stadiums around Australia, even those built by Labor governments.

MR SPEAKER: Are you clear on that, Mr Quinlan?

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