ACT's $1b blowout
Big spending by the ACT Labor Government on water security projects and other capital works has contributed to a serious weakening in the ACT's long-term financial positions, according to the Auditor-General.
The territory's unfunded liabilities have blown out by more than $1 billion in the past two years as borrowing to fund Actew's expenditure on big water projects continues.
Although the short-term strength of the ACT's balance sheet remains strong, the report found that the Government had been dipping into the territory's investment pool to pay for operating expenses like wages.
In its report on the 2010-2011 government financial audits, Auditor-General Maxine Cooper's office predicted that the long-term position is unlikely to begin to recover until 2015 when borrowings to fund capital assets programs, in particular water security, subside.
The Auditor-General's annual report card on the financial reporting of the territory and its agencies also contains a sharp rebuke for several agencies after a decline in the quality of statements of performance that each government agency must submit annually to the audit office.
According to the auditor's office, only 43 per cent of agencies submitted statements of performances that were rated as ''good'', attributed to a failure to get to grips with the major restructure in May in the wake of the Hawke review.
There was a rap on the knuckles too for the 22 per cent of agencies who failed to submit their statements of performance on time, up from 9per cent the previous year.
The Cotter Dam extension budget was last put at $363million, although two years of rain delays might cause further blow-outs in the cost while the latest available cost for the Murrumbidgee to Googong pipeline is $152million.
''The weakening in the territory's long-term financial position in 2010-2011 was due largely to an increase in borrowings on behalf of ACTEW Corporation to fund major water security projects, a fall in financial assets as investments were used to pay for capital works and meet operating costs, such as employee expenses,'' the auditors wrote. The auditors found the unfunded liabilities had blown out to more than $3.5 billion in 2010-11 against financial assets of just over $2 billion.
''The territory's long-term position is estimated to weaken over the forward years as further borrowings are anticipated to fund the territory's capital assets program, in particular, major water security projects,'' the auditors wrote. ''The territory's short-term financial position can be evaluated by comparing the amount of assets available to cover short-term liabilities.''
But the picture was much rosier in the short term with the auditors finding the territory finances in a robust position against short-term liabilities. ''As at June 30, 2011 the territory had $3.57 in short-term assets available to cover each dollar of short-term liabilities,'' the auditors wrote. ''The territory's short-term financial position remains strong and was stronger than was anticipated in the budget.''