Page 3054 - Week 08 - Thursday, 25 June 2009
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
companies and other entities. As at the end of June 2009, the estimated net liability for superannuation for the ACT government will be $2 billion. This contrasts with an estimated liability of $1.1 billion as of 30 June 2008. On this basis, the superannuation liability will be funded to the extent of 47 per cent as of June 2009 and that is a significant reduction from the previous estimate of funding of 63 per cent that was made in the 2008 budget.
The critical issue for managing the SPA is to continue substantial annual capital injections from the ACT government and to ensure that the asset allocation is such that the optimum return on these assets is achieved over the long term, say, over 10 years or so, so the net liability is reduced and indeed eliminated by 2030. I note that the capital injection for 2009-10 is estimated to be $137 million. The actual outcome for the next financial year will depend on the way in which the global financial markets perform and, after the horrible year that was 2008-09, the budget estimate of the income from the SPA’s asset will be around $139 million.
With economic commentators now saying that the economic recovery may be longer than first thought, this may be optimistic, although the nature of the asset disposition is that the revenue from dividends and interest should remain quite strong. I commend those who are managing the SPA in these challenging times and wish them well in their endeavours.
MS LE COUTEUR (Molonglo) (8.18): As Mr Smyth has said, the situation is that the government’s superannuation liabilities are now funded at only 46 per cent, down from 65 per cent a year ago. We are all aware of the impact of the global financial crisis on superannuation and the ACT of course has been involved in this. We note that at this stage the government has not yet adjusted the strategy with respect to investments and is reviewing this and will report back to budget cabinet to decide on the course of action.
We wish that they would do that soon. We wish that, when they do that, they take into account a bit more clearly ethical issues as well as financial issues. On that note—and we spoke about this a fair bit in the estimates deliberation—one of the things that Mr McAuliffe said, which amazed me, was, “If we were to put into place a screen in place of our portfolio to take away anything to do with armaments, you would screen out just about the entire portfolio.”
There are two possibilities here: either we are incredibly badly invested, if we are invested entirely in companies which have at least part of their business in armaments or, what I suspect is the case, the ACT government actually does not know what it has invested in. That is also a bit of a worrying implication, because it is my contention and the Greens’ contention—and I will say in this place that it could be regarded that I have a conflict of interest in this regard; I used to work for a company called Australian Ethical Investment and I am still a shareholder in it, but I would strongly say—that what we do with our money does make a difference.
The government puts a lot of effort into spending money, spending the $3.7 billion of this budget, to do what it regards as good things, following its values. My contention would be the values are also important as far as what it does with its investments. We
Next page . . . . Previous page . . . . Speeches . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .