Page 2886 - Week 10 - Tuesday, 13 August 2013
I note Mr Hanson also did not acknowledge the $26 million that we were able to secure for the University of Canberra to establish their centre for quality teaching and learning which was, again, over and above the agreement reached on individual schools and the extra money for that.
But the national education reforms, or “better schools’ I think it is called now, will ensure that $194 million more will come to all ACT schools. So an extra $194 million will come into ACT schools over the six years than what would have happened if we had not participated. That is the truth. That is why it was important that the ACT led the way, backed by New South Wales, and become I think the second signatory to the Gonski school reforms.
Proposed expenditure agreed to.
Proposed expenditure—Part 1.4—Superannuation Provision Account—$178,216,000 (capital injection) totalling $178,216,000.
MR SMYTH (Brindabella) (4.08): On the superannuation provision account, I think we all know that it is a big liability for the ACT and there are large numbers involved in it. But I think CIE’s analysis is probably a good summary of where the account sits, so I will just read a few paragraphs to enlighten those who have not bothered to read the CIE report:
The superannuation liabilities at the end of 2012-13 are expected to be $5.1 billion, whereas the investments available to fund these are expected to be $2.6 billion. In 2016-17, these liabilities are expected to increase to $6.15 billion while the investments available to fund these are expected to be $3.42 billion.
In order to smooth out the returns to the Superannuation Provision Account (SPA) over the long run, the budget bottom line utilises an adjustment to interest income on the superannuation account to bring interest levels in line with the long run expectations.
The estimated total liability and unfunded liability in aggregate terms increases over the budget, while the share of liabilities that is unfunded reduces from approximately 49 per cent in 2012-13 to 44 per cent in 2016-17.
The true extent of the superannuation liability is inevitably uncertain. The Budget Statement of Risk suggests that the estimated superannuation liability is most sensitive to inflation, wages growth, rates and patterns of retirement and resignation and the proportion of benefits taken in pension form.
Estimates of the superannuation liability are also sensitive to the discount rate used. Current estimates of total liabilities may increase by approximately $1.7 billion if a more moderate discount rate is used. While there is a significant buffer before an AAA credit rating may be threatened, there are also considerable risks to the net position of the ACT Government which are associated with unfunded superannuation liabilities.
That is a reasonable summary of the data presented in the budget papers, and it is certainly something we will keep a watch on. The amount has varied over time. We