Page 2151 - Week 06 - Thursday, 26 June 2008
As has been mentioned by others this evening, this budget is a blatant election-spending budget. Pretty much anyone who looks like they could have represented an electoral threat has had money thrown at them in this budget. The huge write-down in the cash and cash equivalents accounts is testimony to the dimensions of this vote-buying exercise.
MR SMYTH (Brindabella) (9.25): Perhaps one of the more esoteric areas of government and the budget papers, albeit dealing with the very important issue of managing and accounting for our finances, is the way in which the territory banking accounts, along with other accounts, are actually operated. This raises issues of things like transparency, particularly with respect to assisting in the comprehension of this and other accounts.
It was pleasing perhaps to have, in the estimates committee, discussion of, for instance, the concept of what is unencumbered cash, as it used to appear in the papers, and what is now called the territory banking account in the line that appears in the chart in table 5.1.1. The issue that I have is to ensure that we actually know what in this instance table 5.1.1 means. Some of the comments made during the estimates committee hearings were most useful in assisting in the understanding of these issues.
In particular, I would like to thank the Under Treasurer for her comments on this matter. In that regard, the intention here was to relate the territory banking account line to—and I quote—“individual financial statements sitting in budget paper 4”. What would help, however, I think, is some explanation in the budget papers of the way in which these items in table 5.1.1 are derived or are built up and, in fact, how they relate to other financial information elsewhere in the budget papers.
Proposed expenditure agreed to.
Proposed expenditure—part 1.7—Home Loan Portfolio—nil
MR SMYTH (Brindabella) (9.28): In regard to the home loan portfolio, KPMG conducted a review as part of the regular review process, but no decisions have been made by the government regarding the portfolio since the review was done. The review stated that capital adequacy was not based around the whole home loan portfolio. What we operate here is a closed scheme and it has 275 loans left in the 2007-08 year. It will have 215 loans to run left in the 2008-09 year.
The portfolio contains this time $17 million in cash and cash equivalents, as well as large amounts invested in both long and short-term assets. In 2007-08 there was a distribution to the government of $4.3 million and because of the commonwealth-state housing agreement there are some restrictions on what that money can be used for. Some years ago $30 million was invested in public housing and, as I said, these funds have to be utilised in accordance with the commonwealth-state housing agreement.
Of particular interest are the administration costs in the 2006-07 financial year. The cost was $1,162 per loan. In 2007-08 it was $1,400 per loan. In the coming year it will be $1,700 per loan, but this trend is expected given the changing nature of the portfolio and the diminishing number of loans; the work still has to be done even