Page 1230 - Week 07 - Wednesday, 23 August 1989
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largely offset by an increase in general purpose funding, which has also resulted from the changed parameters.
In specific terms, the revised CPI forecast will be taken into account to update the expenditure side of the budget where that is appropriate. In this regard, a very small number of ACT expenditure items are tied to the CPI, as it primarily reflects movements in the expenditure of households. You might be familiar with the household basket of goods. The major index used for public and business sector expenditure is the gross non-farm product deflator, which is estimated to be 6.25 per cent, where previously it had been estimated at 5.5 per cent.
The revenue side of the budget has, of course, also been revised in line with the revised parameters and will now receive a greater amount from the Commonwealth than we previously expected. The fees and charges have, as you know, already been set and they will not be further increased. The rates are before the Assembly today, and we do not propose any change. Revenue from fees and charges is, however, a small proportion of total ACT receipts. The bulk of the ACT receipts are taxes. The tax rates are set by legislation and are, therefore, not affected by such parameter variations.
Mr Speaker, the effect of the price parameter movements has been calculated to be an increase in expenditure of $2.5m offset by an increase in receipts of $2.3m. The variation in a budget of over a billion dollars is therefore of little consequence to the overall budget strategy and it will be addressed in the fine-tuning of the draft estimates in the budget process.
Mr Kaine also raised the matter of the expected wages growth. The estimates used in compiling the ACT budget are based on the national wage case decisions that have been taken both last year and this year. A realistic provision has also been made for adjustments to professional salaries. This basis of estimation provides the most accurate guide to public sector wages growth, so there is no need to adjust our wages growth estimate.
On the question of the expected employment growth, also raised, the estimate Mr Kaine has quoted is, of course, the national estimate. Our ACT estimate of two per cent is still current and more accurately represents what is actually happening in this Territory. We are all aware that the growth in employment in the Commonwealth public service is expected to be zero. That being the largest single employer in the ACT, it has, of course, a very significant impact on ACT employment forecasts.
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