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Thursday, 29 May 2003
Page: 15459

Mr McMULLAN (2:00 PM) —My question is to the Treasurer, and I refer to the admission by the secretary of the finance department in Senate estimates yesterday that the budget papers have overvalued Telstra by about $3 billion and that as a result the department will publish corrected figures. Was the Treasurer aware of this massive overstatement of Telstra's value when he presented the budget two weeks ago? Treasurer, isn't it the case that section 296 of the Corporations Act says that the company's financial report must comply with relevant accounting standards and that breach of this provision carries a penalty of up to five years jail or a $100,000 fine or a civil penalty of $200,000? Isn't it then the case that, if the same principle of accurate disclosure were applied to the Treasurer, his failure to comply with the relevant accounting standards could expose him to a potential penalty?

Mr COSTELLO (Treasurer) —The answer to the honourable member's question is that it has been fully explained by Senator Minchin in Senate estimates that in a statement of net worth under AAS31 Telstra can be valued at historical cost.

Mr COSTELLO —Less—absolutely. Platforms can be valued at cost. That put a value on platforms at $31.5 billion and showed a net worth under AAS31 of minus $49-odd billion in 2002-03. The government, in addition to doing net worth on a AAS31 basis, also does it on a GFS basis. On a GFS basis, the valuation of Telstra would be at market value, with Defence platforms valued at zero. That produces an estimate of net worth in 2002-03 of minus $47-odd billion. Both of these are huge estimations. For example, valuing the whole of Australia's Defence platforms at zero—that is, the Collins class submarines, frigates, F111s and Hornets at zero—is obviously very wide of their actual value. Indeed, much of the Commonwealth land-holding is not valued at true market rent. We do not attempt to value Defence lands, such as North Head or South Head, at full market value or, indeed, the buildings around Parliament House.

These are very, very general estimations and they vary according to the particular values that one puts on them. Senator Minchin has this afternoon released a different valuation, a 90-day valuation in relation to GFS standard this afternoon, which does it on an additional basis. So it can be done on every single basis you like—AAS31, GFS, GFS on 90-day market average—but these are still estimations. The important point is that this does not affect the budget, it does not affect the cash position, it does not affect the fiscal position and it does not affect the operating position. This is a statement in relation to net worth, which the Commonwealth has been putting in budget papers only since 1999-2000. These are very general estimates. The government will be reporting on all of the different bases so that they are there for the historic record, but it makes no difference whatsoever to the underlying budget position as reported in the budget on last Tuesday night fortnight.