Page 1507 - Week 04 - Thursday, 25 March 2010
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Health is a huge issue; we all know that. We know it soaks up close to a third of the budget. It will continue to be a huge issue for all jurisdictions, as we are seeing in the national debate that is going on. This would be a very important report. The Treasurer should tell us exactly how the government is going to respond to the report itself.
I go to the next couple of recommendations, 22, 23 and 24. No 25 looks at territory-owned corporations, in particular the water projects. Recommendation 22 says:
The Committee recommends that, when a number of projects are considered as part of an overall strategy, the cost estimates of each option need to be more accurate.
We are well aware of the fiasco with the dam that is now more than double the number that was released. There is so much confusion over what the actual number that was released was, and whether or not it should have been released, that it is important that the government, when they put these numbers out, make it emphatically clear that the number is at a point in time and make it clear what it relates to, so that we avoid the debacle that we currently have.
Recommendation 23 says:
The Committee recommends that where unfinalised cost estimates of major projects are made public, the basis of those estimates should be clearly explained.
That is fairly self-explanatory. Recommendation 24 says:
The Committee recommends that more rigour be applied to the business cases for large and/or complex projects before committing to a delivery model framework and/or provider.
This grows out of the fact that the Victorian government has just looked at the alliance model, which is what we have been using for the delivery of the dam project. Paragraph 5.55 says:
The Committee is aware of a report, sponsored by the Victorian Government, called In Pursuit of Additional Value … The report reviews project delivery through the alliance model and it indicates that alliance models generally lead to … out-turn costs that are 50 percent higher than the business case estimates. This is compared with traditional models that average at 30 percent … and public-private partnerships at … 10 percent higher.
Yet again the ACT government prove that they are quite capable of spending more. They say, “We are spending more money than any other government on capital works.” Yes, but you are under-delivering on value for dollar, because you are picking inappropriate models or the most expensive model. In this case, what the committee is saying—and it is a unanimous report from the committee—is that you have got to look at how you deliver these projects and what model you choose. Simply to run the old line “we are spending more”—that is true, but for the money that the government is spending people are waiting longer and getting less.
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