Page 1166 - Week 04 - Thursday, 17 March 2005

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would be $110 million, why did the 2004-05 budget show the cost of the prison at $110 million, that is, as at May 2004 dollars.

MR STANHOPE: Mr Stefaniak, this was a matter, as you know, that was the subject of questioning by you, in estimates a week or so ago, of departmental officers, including the director of the prison project, the head of Corrections ACT, the head of the department of justice and, indeed, the finance officer of the department of justice. During that estimates hearing, all of these issues were canvassed. You asked the questions and they were responded to by my officials. A very clear, unequivocal and unambiguous statement of the cost of the prison project and the basis on which the costs were made and undertaken was given to you. That was that, at the time the cabinet took a decision to take the step of agreeing to fund the prison project, it agreed to fund it to the tune of $110 million, acknowledging that that costing was as of March-April 2003. Nothing has changed.

It has always been the position of the government that there would be an escalation in that cost as a result of costs rises in relation to inflation and indexation. Not only is that normal; that was the basis of the decision that was taken by the cabinet and, as you were advised in estimates, ACT Corrections or the department of justice is currently in consultation with ACT Treasury in relation to what an appropriate indexation or cost escalator for the prison project might be. That has not yet been resolved. I think there are other projects in relation to which that particular issue has not been resolved; I think the GDE is one of them. On all of our major capital works projects that were costed some time ago, there is of course an indexation factor that will have to be taken into account in determining an ultimate or final cost. That applies to the GDE, it applies to the prison and it applies to other major capital works projects that the government undertakes. It is the case in relation to the prison.

The position in relation to the prison is today as it has always been: it is a $110 million project, acknowledging that the $110 million was costed as at March-April 2003. There will be an escalator and it will be funded or, subject of course to what is ultimately decided in the consultations between Treasury and ACT Corrections or the department of justice, we will take a decision, as I indicated in estimates, Mr Stefaniak. If it is decided that there is some outrageous indexation, escalator or increase in cost, the government will of course have to look at whether or not it needs to cut its cloth to meet the final result, and that is the decision we will take. We will either fund it or we will reduce the scope of the project.

MR STEFANIAK: I thank the Chief Minister for that answer and have a supplementary question: Chief Minister, can you tell us what is the estimated cost to construct the prison project in March 2005 dollar terms?

MR STANHOPE: One wonders why we have an estimates process.

MR STEFANIAK: Can you give us a figure or not? If you can’t, just say so.

Mr Quinlan: They can’t think of another question; that’s all.

MR STANHOPE: Has it come to this? We have all the officials of the ACT government available to respond to finite and minute questioning on issues of costs and cost estimates and the questions are asked. Perhaps Mr Stefaniak was not exactly fast enough

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