❓ Treasurer responds to a question regarding the accuracy of the Member for Victoria Park's comments on the Western Australian Future Fund and Treasury expenditure on consultants, refuting the claims.
AnsweredQoN 578Legislative Assembly
QuestionView source ↗
WESTERN
AUSTRALIAN FUTURE FUND — DEPARTMENT OF TREASURY — CONSULTANTS
578. Mr M.H. TAYLOR to the Treasurer:
I refer to comments made in previous days by the member for
Victoria Park in relation to the state's future fund and Treasury
expenditure on consultants. Can the Treasurer please advise the house of the
accuracy of the member's comments on these two issues?
Mr W.J. Johnston :
It is 100 per cent accurate, so sit down!
The
SPEAKER : Thank you, member for Cannington!
AUSTRALIAN FUTURE FUND — DEPARTMENT OF TREASURY — CONSULTANTS
578. Mr M.H. TAYLOR to the Treasurer:
I refer to comments made in previous days by the member for
Victoria Park in relation to the state's future fund and Treasury
expenditure on consultants. Can the Treasurer please advise the house of the
accuracy of the member's comments on these two issues?
Mr W.J. Johnston :
It is 100 per cent accurate, so sit down!
The
SPEAKER : Thank you, member for Cannington!
AnswerView source ↗
It is 100 per cent wide of the mark,
and I have not even given the answer yet, so thank you, member for Cannington!
It is 100 per cent wide of the mark, and I will stand and explain why.
But, first, can I also lend my
support to the Dockers. The reason I want them to win—without being
disrespectful, Premier—is that I am not that keen on seeing the Premier
in a Hawthorn jumper in the Hay Street Mall!
Mr
C.J. Barnett : It will never happen!
Mr T.R. BUSWELL : I
hope so! I will move on, because that is shaky ground!
There are two issues that the member for Victoria Park has
been canvassing this week publicly—the future fund, and the use of
consultants, I think the word was —
Mr B.S. Wyatt :
Consultants and contractors
Mr T.R. BUSWELL : —
yes, consultants and contractors by the Department of Treasury. I want to
quickly reflect on some of the facts that sit around those two issues and
compare them with the public commentary of the member for Victoria Park,
because they are not the same. When we dig down and have a look, they are not
entirely the same.
For the benefit of members who have not been in this place
for long, the future fund effectively has two sources of what I would call base
capital. Over the first four years of the fund—of which we are now in
the second—there will be an injection of funds from the royalties for
regions fund. That will total over that period of time of seed capital about
$1.07 billion from the royalties for regions fund. How does money get into the
royalties for regions fund? Companies pay royalties to the state, and a
percentage of those royalties is transferred to the royalties for regions fund
and then out of the royalties for regions fund into the future fund. Once that
is done, one per cent of royalties per annum will be paid into the royalties
for regions fund. The entirety of that base injection into the future fund
comes from royalties.
So what did the member for Victoria Park say when he spoke to
Paul Murray the other day? I am quoting from what the member for Victoria Park
said on 24 September —
The Future Fund.., and it's
important to realise that the money that goes into the Future Fund is borrowed
money.
Mr B.S. Wyatt :
That's right!
Mr T.R. BUSWELL :
It is borrowed money! How do we borrow royalties, member for Victoria Park? The
member for Victoria Park then made the comment —
It was borrowing money to put into
what is being effectively a special purpose account within the overall public
bank account.
Paul Murray then said —
See, that's the first thing
that surprises me, because I was never of the view that it was going to be
borrowed money. I was ... always thought it was coming straight from mining
royalties.
That is right; it clearly is coming from mining royalties.
The member for Victoria Park then said to Paul Murray—
That's right, it's
borrowed money.
How do we borrow royalties, member for Victoria Park? Do we
borrow money to buy a mine and dig up iron ore and then charge ourselves a
royalty? How on earth do we do that?
Mr B.S. Wyatt : Can
I get up and answer that please, Mr Speaker? Please let me get up, Treasurer!
Ask me the dorothy!
Mr T.R. BUSWELL :
The member for Victoria Park should get someone on his own side to ask him the
question!
What the member for Victoria Park said on radio is widely
divergent from the facts and widely divergent from the truth. Every cent in the
future fund comes from royalties—every single cent.
The member for Victoria Park then went on to mount the
argument that the interest rate being earned on the future fund is less than we
pay for our debt; therefore, we should not have a future fund. That also is not
true, member for Victoria Park. Since its inception, the total return on the
future fund has been 3.72 per cent. Over that period of time, the cost of
government funds was 3.37 per cent. That is a difference of 0.35 percentage
points.
Mr B.S. Wyatt interjected.
Mr T.R. BUSWELL : I
am not the one going on radio and telling little lies to the people of Western
Australia—telling sneaky little half-truths to the people of Western
Australia.
Withdrawal of Remark
Mrs
M.H. ROBERTS : Mr Speaker, the Treasurer has used unparliamentary
language and is accusing the member for Victoria Park of telling lies. I ask
you to call on him to withdraw.
The
SPEAKER : Treasurer, withdraw that, please.
Mr
T.R. BUSWELL : I do; and my apologies, Mr Speaker.
Questions
without Notice Resumed
Mr T.R. BUSWELL :
Those are the facts. The member for Victoria Park is wrong on the source of
funds and he is wrong on the cost of funds—wrong and wrong! When we
follow that argument and take it through to its logical extension, the member
for Victoria Park is saying that if people have a home loan, they should not
have superannuation. Nearly every person in this chamber and nearly every
person in this state would have a home loan that they are paying off, and they would
have superannuation, saving for the long term. What a brilliant financial
strategist you are, member for Victoria Park! The member for Victoria Park is
saying that every person in WA who has a home loan and a superannuation policy
is wrong. That is his message. That is absolute lunacy!
Several members interjected.
The SPEAKER : Thank
you, members! The Treasurer.
Mr T.R. BUSWELL : I
will just quickly move on to —
Several members interjected.
The SPEAKER :
Member for Bassendean, I call you to order for the first time. Member for West
Swan, I call you to order for the first time.
Mr T.R. BUSWELL :
Just quickly, the second bit of commentary this week was about spending on
consultants and contractors increasing from $12 million to $17.2 million in the
Department of Treasury annual report. The member for Victoria Park went on the
radio and said —
On the one hand you have the
Government claiming they have an FTE cap on public servants, however, on the
other hand, they increase significantly in the millions of dollars, the amount
of money they spend on private sector consultants.
I did what the member for Victoria Park probably should have
done, and asked what contributed to that $5 million increase.
Mr B.S. Wyatt : You
should have known that.
Mr T.R. BUSWELL : I
do. There was a $1.5 million increase in the costs required to deliver
strategic projects—such as the stadium, the new children's
hospital or the Midland Health Campus—paid internally to other
government organisations. The opposition criticises the paying of money to
other government agencies that provide services to the Department of Treasury—that
is absurd. It is using government resources to deliver the expertise it needs
to deliver those projects. The second component in the increase is the $1.6 million
of notional payment to the department —
Point of Order
Mrs
M.H. ROBERTS : The Treasurer's answer has gone for nearly
seven minutes now and I wonder how long he will be given to answer his own
dorothy dix question.
The
SPEAKER : One minute, Treasurer.
Questions without Notice Resumed
Mr T.R. BUSWELL :
There is a $1.6 million notional payment to the Department of Finance to
provide financial services. Sixty per cent of what the opposition calls a
blow-out in costs is actually internal transfers within government. There was
$800 000—this was to a private consultant and I would like the
opposition's advice on this!—to PricewaterhouseCoopers
consulting that gave advice to government agencies that enabled them to go to
the commonwealth and claim back $30.9 million in GST overpayments. Is this a
bad use of Western Australian taxpayer funds? Absolutely not.
and I have not even given the answer yet, so thank you, member for Cannington!
It is 100 per cent wide of the mark, and I will stand and explain why.
But, first, can I also lend my
support to the Dockers. The reason I want them to win—without being
disrespectful, Premier—is that I am not that keen on seeing the Premier
in a Hawthorn jumper in the Hay Street Mall!
Mr
C.J. Barnett : It will never happen!
Mr T.R. BUSWELL : I
hope so! I will move on, because that is shaky ground!
There are two issues that the member for Victoria Park has
been canvassing this week publicly—the future fund, and the use of
consultants, I think the word was —
Mr B.S. Wyatt :
Consultants and contractors
Mr T.R. BUSWELL : —
yes, consultants and contractors by the Department of Treasury. I want to
quickly reflect on some of the facts that sit around those two issues and
compare them with the public commentary of the member for Victoria Park,
because they are not the same. When we dig down and have a look, they are not
entirely the same.
For the benefit of members who have not been in this place
for long, the future fund effectively has two sources of what I would call base
capital. Over the first four years of the fund—of which we are now in
the second—there will be an injection of funds from the royalties for
regions fund. That will total over that period of time of seed capital about
$1.07 billion from the royalties for regions fund. How does money get into the
royalties for regions fund? Companies pay royalties to the state, and a
percentage of those royalties is transferred to the royalties for regions fund
and then out of the royalties for regions fund into the future fund. Once that
is done, one per cent of royalties per annum will be paid into the royalties
for regions fund. The entirety of that base injection into the future fund
comes from royalties.
So what did the member for Victoria Park say when he spoke to
Paul Murray the other day? I am quoting from what the member for Victoria Park
said on 24 September —
The Future Fund.., and it's
important to realise that the money that goes into the Future Fund is borrowed
money.
Mr B.S. Wyatt :
That's right!
Mr T.R. BUSWELL :
It is borrowed money! How do we borrow royalties, member for Victoria Park? The
member for Victoria Park then made the comment —
It was borrowing money to put into
what is being effectively a special purpose account within the overall public
bank account.
Paul Murray then said —
See, that's the first thing
that surprises me, because I was never of the view that it was going to be
borrowed money. I was ... always thought it was coming straight from mining
royalties.
That is right; it clearly is coming from mining royalties.
The member for Victoria Park then said to Paul Murray—
That's right, it's
borrowed money.
How do we borrow royalties, member for Victoria Park? Do we
borrow money to buy a mine and dig up iron ore and then charge ourselves a
royalty? How on earth do we do that?
Mr B.S. Wyatt : Can
I get up and answer that please, Mr Speaker? Please let me get up, Treasurer!
Ask me the dorothy!
Mr T.R. BUSWELL :
The member for Victoria Park should get someone on his own side to ask him the
question!
What the member for Victoria Park said on radio is widely
divergent from the facts and widely divergent from the truth. Every cent in the
future fund comes from royalties—every single cent.
The member for Victoria Park then went on to mount the
argument that the interest rate being earned on the future fund is less than we
pay for our debt; therefore, we should not have a future fund. That also is not
true, member for Victoria Park. Since its inception, the total return on the
future fund has been 3.72 per cent. Over that period of time, the cost of
government funds was 3.37 per cent. That is a difference of 0.35 percentage
points.
Mr B.S. Wyatt interjected.
Mr T.R. BUSWELL : I
am not the one going on radio and telling little lies to the people of Western
Australia—telling sneaky little half-truths to the people of Western
Australia.
Withdrawal of Remark
Mrs
M.H. ROBERTS : Mr Speaker, the Treasurer has used unparliamentary
language and is accusing the member for Victoria Park of telling lies. I ask
you to call on him to withdraw.
The
SPEAKER : Treasurer, withdraw that, please.
Mr
T.R. BUSWELL : I do; and my apologies, Mr Speaker.
Questions
without Notice Resumed
Mr T.R. BUSWELL :
Those are the facts. The member for Victoria Park is wrong on the source of
funds and he is wrong on the cost of funds—wrong and wrong! When we
follow that argument and take it through to its logical extension, the member
for Victoria Park is saying that if people have a home loan, they should not
have superannuation. Nearly every person in this chamber and nearly every
person in this state would have a home loan that they are paying off, and they would
have superannuation, saving for the long term. What a brilliant financial
strategist you are, member for Victoria Park! The member for Victoria Park is
saying that every person in WA who has a home loan and a superannuation policy
is wrong. That is his message. That is absolute lunacy!
Several members interjected.
The SPEAKER : Thank
you, members! The Treasurer.
Mr T.R. BUSWELL : I
will just quickly move on to —
Several members interjected.
The SPEAKER :
Member for Bassendean, I call you to order for the first time. Member for West
Swan, I call you to order for the first time.
Mr T.R. BUSWELL :
Just quickly, the second bit of commentary this week was about spending on
consultants and contractors increasing from $12 million to $17.2 million in the
Department of Treasury annual report. The member for Victoria Park went on the
radio and said —
On the one hand you have the
Government claiming they have an FTE cap on public servants, however, on the
other hand, they increase significantly in the millions of dollars, the amount
of money they spend on private sector consultants.
I did what the member for Victoria Park probably should have
done, and asked what contributed to that $5 million increase.
Mr B.S. Wyatt : You
should have known that.
Mr T.R. BUSWELL : I
do. There was a $1.5 million increase in the costs required to deliver
strategic projects—such as the stadium, the new children's
hospital or the Midland Health Campus—paid internally to other
government organisations. The opposition criticises the paying of money to
other government agencies that provide services to the Department of Treasury—that
is absurd. It is using government resources to deliver the expertise it needs
to deliver those projects. The second component in the increase is the $1.6 million
of notional payment to the department —
Point of Order
Mrs
M.H. ROBERTS : The Treasurer's answer has gone for nearly
seven minutes now and I wonder how long he will be given to answer his own
dorothy dix question.
The
SPEAKER : One minute, Treasurer.
Questions without Notice Resumed
Mr T.R. BUSWELL :
There is a $1.6 million notional payment to the Department of Finance to
provide financial services. Sixty per cent of what the opposition calls a
blow-out in costs is actually internal transfers within government. There was
$800 000—this was to a private consultant and I would like the
opposition's advice on this!—to PricewaterhouseCoopers
consulting that gave advice to government agencies that enabled them to go to
the commonwealth and claim back $30.9 million in GST overpayments. Is this a
bad use of Western Australian taxpayer funds? Absolutely not.
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