Page 1644 - Week 08 - Thursday, 28 September 1989
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One report quoted the Treasurer as saying that the ALP's draft budget would result in a budget surplus in 1989-90 of more than $50m. The report then went on to say that Ms Follett said that the Labor Party had "done its homework" and that no drastic changes in budget policy would be needed to make the ACT pay its way. Now, more recently, the Treasurer has developed some doubts on these points and in her opening statement to the budget consultative committee recently, after referring to the $84m overfunding, she stated, "There is nothing that would suggest that this position has improved".
So now we are acknowledging that the Grants Commission was correct. In fact the $84m figure for Commonwealth overfunding for the ACT was based on the 1986-87 situation, as I have said, and it has been suggested by an officer of the Commonwealth Department of Finance at a seminar on ACT finances early this year that the figure is more likely to be of the order of $135m. It is no secret that the guarantees of Commonwealth funding for the ACT expire about 21 months from now.
This is a major problem that demands positive and immediate action. The Government's budget action on this matter is timid and token. The hard decision is yet to be made, and this decision cannot be further delayed because time is running out. I note, Mr Speaker, that the $50m budget surplus for 1989-90 predicted by the current Treasurer has failed to materialise.
Despite her belated recognition of the financial problems facing the ACT arising from the Commonwealth overspending, the Treasurer still has done little to address them. She does not seem even to understand that the Commonwealth guarantees expire in 21 months and that we will need to adjust the finances to the tune of possibly more than $100m annually by then. The budget that the Treasurer has presented for 1989-90 is no more than a reiteration of the inherited forward estimates, forward estimates based on past performances deriving from Commonwealth priorities and imperatives.
Some minor fiddling has been done around the margins. The Treasurer continues to show a total inability or unwillingness to tackle the real issues, an approach which will only compound the problem for 1990-91 and for future budgets. Where change is contemplated the Treasurer misrepresents some elements of the financial situation. For example, take public borrowing. The Government claims in its budget papers - that is paper No. 2 at page 11, for those who want to look it up - that it has taken a significant decision to cut its future recurrent expenditure by deciding to reduce its borrowings by $10.8m.
This, Mr Speaker, is simply not the case. The $10.8m reduced borrowing is illusory and has involved no hard decisions by the Government. Of the $10.8m, $5.8m is referred to in the initial budget statement of 25 July as
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