Legislative Assembly for the ACT: 2003 Week 1 Hansard (19 February) . . Page.. 156 ..
MR STANHOPE (continuing):
To the extent that we have the timing, I am happy to get, for each of those, that detailed information for the Assembly-separate statements and declarations. I do not have it off the top of my head. I have some fairly significant bushfire briefings here to enable this issue to be covered, I will be happy to provide that information to the Assembly before the close of question time today.
MR HARGREAVES: My question is to the Treasurer. The Leader of the Opposition is struggling to follow the most recent revision of the budget position and blames your accounting semantics for his failure. For Mr Smyth's benefit, would you please explain the sophistry-Mr Smyth's word-of the territory's financial position.
MR QUINLAN: I thank Mr Hargreaves for his question. I think it is going to become important that we make clear the impact of superannuation and fluctuations in earnings on superannuation investments in the near future because if Mr Smyth is tipping his hand then the commentary he is going to make on the territory's finances will have only a passing acquaintance with the real facts.
I have to claim that back in February of 1999, as chair of the select committee on the territory's superannuation, I wrote a report that warned that if we had large superannuation investments out on the equity markets then the probability of experiencing fluctuations in share price indices would be extremely high. It went on to say that if the amount of investment was significant then it would have a very material impact upon the bottom line of the territory. That was in relation to the then government's desire to liquidate the asset called Actew and turn a regular earner into a lump of cash.
In fact, a large amount of the money that we have set aside in superannuation investments had its origins in capital rehabilitation from Actew to show that there is some funding behind the superannuation investment. That put Actew into a position of borrowing. So over time the previous government liquidated a very large proportion of a very sound asset rather than taking a little bit more sophisticated view of the territory's position, the earning capacity and, in fact, our general asset value against this particular liability. And as a function of that and as a function of trying to fund the superannuation liability we do have quite a large amount.
I gave a warning and made recommendations at the time. I remember a number of times, either in a public forum or in this place, saying that some Treasurer in the future was going to preside over an horrendously bad bottom line and that it was going to be because of decisions taken back then. I have to say that they are quite prophetic words because I am sitting here with tremendous impacts having been made upon the bottom line of the territory that are a direct result of fluctuations in equity markets and the large liquid asset backing we had for our superannuation liability. It is in fact the main cause of impact; it is the main cause of an expected deficit for this current year.