Page 1659 - Week 08 - Thursday, 28 September 1989
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accept that parliamentary measures in general and budgets in particular are a vehicle to serve the interests of any groups, whether they be unionists, bureaucrats, politicians or anyone else. This budget will be known as the Follett budget, even though it has several subtitles. We therefore find it a deeply disappointing contribution to the Government of the ACT.
MR DUBY (4.00): The first ACT budget is a great disappointment to members of the ACT community who expected the Government to more closely address the economic condition of the ACT than any Commonwealth Government had been prepared to in the past. Instead, while accepting the analysis my party has been arguing for the last two months, that the ACT economy is performing worse than that of the rest of Australia, as noted in budget paper 2, page 13, the Government has failed to take the macro-economic measures necessary to achieve economic recovery. This is particularly serious because the general economic environment will deteriorate progressively over the next year under the influence of the Federal budget.
Although it is extremely difficult to get a clear picture from the budget papers of the comparison of 1989-90 with 1988-89 and with the initial budget statement, it appears that the Government has increased total outlays by 0.6 per cent in real terms over the last year. The initial statement suggests a real cut in outlays of 2.6 per cent. This is far too weak a response to an economy which, in the most significant sectors, is already in recession. We have argued for an increase in real outlays of 6 per cent, requiring an injection of funds into the ACT economy of around $90m to reduce the severity of the coming recession, mitigate unemployment and reduce bankruptcies of our businesses.
In our submission to the budget consultative committee we predicted that the growth basis of the budget of 1.5 per cent increase in the work force and 2 per cent in population would turn out to be far too optimistic. These, however, have been retained in the budget. If we are right and the Government is wrong and ACT growth is much lower than expected due to the contractionary Federal policies, the ACT Government will face a $50m deficit by the end of this financial year rather than its proposed balanced budget. This will be caused by the drying-up of its revenue bases as the economy contracts. There is precious little in the budget to lead me to believe that the Government has the faintest idea of what we have been talking about.
In budget paper No. 2 the Chief Minister talks as if countercyclical spending by Government is a luxury we cannot afford. I quote from that paper:
A group of responses to the initial statement have suggested significantly higher levels of ACT spending to offset the current downturn in the ACT economy.
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