Page 1101 - Week 04 - Thursday, 29 March 1990
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The second goal is to produce a balanced recurrent budget, not only in our first or second years, but in the longer term when the Commonwealth withdraws its current level of financial support and instead provides the ACT with financial assistance on a basis comparable with the States. We will not lose sight of the needs of the community in achieving this balance.
Our third goal is to minimise the Territory's borrowings. While they have their place, particularly where the assets acquired generate sufficient income to repay the loans, servicing borrowings will place further pressure on future budgets.
The fourth goal is to make full use of the capital assets that have been transferred to us. The Commonwealth has spent large sums on facilities, roads, parks and the like, leaving the ACT with the financial burden of operating and maintaining them.
We aim to use these assets to the fullest possible extent, both to minimise the need for new capital expenditure and to avoid closing existing facilities wherever a feasible alternative can be found. Our budget strategy is built around these goals, and I shall be elaborating on each of them later.
The Economic Environment
Our strategy demonstrates a clear understanding of the ACT economic outlook. As well as feeling the national impact of tight fiscal and monetary policies, business activity and employment levels in Canberra are directly affected by the budgetary restraint of the Commonwealth Government. As long as Commonwealth expenditure is restrained, it will affect employment in Canberra. This is particularly so given the large number of Canberra firms which provide services to the government sector.
In 1990-91, the ACT economy will continue to reflect the effects of these national policy settings. Short term employment growth is expected to remain subdued. While there is some improvement in the outlook for the following two years, it will require an improvement in the fundamentals of the national economy.
We are facing a difficult period: one in which it will be vital to help generate new jobs for young people leaving school. We estimate that there are about 5,000 new entrants to the ACT work force each year. Many of these people take part time jobs while studying. There are about 2,000 retirements from the workforce, resulting in a requirement for around 3,000 new full time and part time jobs each year. There is little prospect of the Commonwealth providing many of these new jobs and our goal must therefore be private sector growth. To achieve this, we must ensure that the local investment climate is right.
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