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Legislative Assembly for the ACT: 2001 Week 7 Hansard (19 June) . . Page.. 2098 ..

MR QUINLAN (continuing):

Proposed expenditure-part 5-ACT Executive, $2,863,000 (payments on behalf of the territory), totalling $2,863,000.

Proposed expenditure agreed to.

Proposed expenditure-part 6-Treasury, $25,847,000 (net cost of outputs), $16,360,000 (capital injection) and $50,708,000 (payments on behalf of the territory), totalling $92,915,000.

MR QUINLAN (10.45): Included in and around this area is $5 million paid to Totalcare for redundancies, which points up the issue that was raised in that trashy document, the estimates committee report-

Mr Humphries: I'm glad you agree.

MR QUINLAN: Which recommends that the government look out for internal arrangements open to competition to look at the whole-of-government cost or, to put it another way, where the net cost at the end of the day is owed to the taxpayer. We were told that Totalcare lost what is now called "facilities management", a service provided to ACT Housing. It was apparently cost competitive. We found out later that there appeared to be an acceptable level of satisfaction of the service provided. However, it was still let out to a couple of private sector firms, with the consequence that Totalcare had to wind back and had to incur the cost of redundancies.

It would seem that we have within this an ideological pursuit on the one hand and, possibly, a fool's economy on the other. Let me repeat that because it just felt good saying it: fool's economy on the part of government as a whole.

I would like to make a point about investment. I am concerned, and have been for some time, about the level of investment that is unfortunately necessary at the end of the day. Some of it is not necessary. We sold off half of ACTEW, turned that into cash and therefore turned that into liquid investments, when it was a fairly steady earner in water supply, sewerage supply, and electricity distribution. That earning capacity was not subject to the vagaries of capital markets-and international capital markets, at that-that we have seen in recent times.

Some of the earnings and capital values of our investments fluctuate significantly. Sooner or later in the economic cycle there is going to be a significant fall in the capital markets. If that happens in the next five years, we are going to have something between $11/2 billion and $2 billion out there somewhere. That is of concern.

We have just passed a bill that would allow an act to permit entering into the use of derivatives. I trust that the government and the Treasury heard the sentiments of this place-which I think were fairly universal across the chamber-that derivatives should certainly be used to protect our investments, lower our overall risk profile but not expose us to very substantial loss should there be-obviously unanticipated-a collapse or significant dip in the capital markets. As one who would pretend to be Treasurer of the territory, I am genuinely frightened by the fact that we have that much exposure.

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