Page 221 - Week 01 - Thursday, 16 February 2006

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MR QUINLAN: You have it all, bar one dimension. The fact is that those things change; yes it is recognised. Our actuary and our treasury officials work together earnestly trying to predict those. If there has been a increase, we take that into account. But if there is an inordinate increase, or an acceleration beyond your expectation, then you could get a rude shock. That has obviously been the case.

I do not have in front of me the figures of what the actuary and the treasury officials discussed two years ago. I know that last November the trend had gone from 50 per cent to 70 per cent of the old 54.11 and taking a pension rather than a lump sum.

From what it increased before that, I do not know. If you do not know that, the question is a non-question. What is the inference of this? Treasury wrote that in the budget: we signed it off and brought it down here; and then bodgied the figures. Why would we do that? We were trying to get an accurate estimate. So you have to take the trends and the demography at the time. When you talk change, you also have to talk about rates of change. It is not all that complex. But you have to talk about a rate of change as well as a trend.

I am fairly confident that the treasury officials and the actuary of the day took the figures and the trends that seemed reasonable on past history to be included in the calculations of the time. But now, with the romp of baby boomers going through the retirement process, there seems to be an even greater level of change. Just allow, in your mind, for a greater rate of increase, even there was previously a rate of increase.

MR MULCAHY: Mr Speaker, I have a supplementary question. Treasurer, what date in late October was superannuation identified as risk, to which you referred yesterday?

MR QUINLAN: I do not have a particular day. But superannuation, if Treasury is writing a briefing to cabinet, then amongst the list of all the other risks that they would identify, superannuation is highly likely to get a mention. Your own question is based on the clear volatility of that process. You would then have to recognise that, when Treasury is giving a briefing to cabinet, they do not say, “Here’s a list of all the risks for the budget and future—superannuation—full top”. No; it is whole paper that includes all the different risks: land sales, the housing market, wage levels—you name it; all of those things. Amongst that, there will be a paragraph—I am sure; I cannot remember the precise details—that states, “And superannuation could be”. It would not say, “There is a risk that a year or so from now there will be an actuarial report that comes down on 12 December and says, ‘You need to provide an extra $40 million’”. That is just a nonsense. But that is the presumption of your question.

Mr Smyth: But it was important enough to put in the budget.

MR QUINLAN: Excuse me, Mr Speaker, I have had enough of that.

Mr Smyth: My first interjection for the day.

MR SPEAKER: Order! Mr Smyth.

Opposition members interjecting—

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