Page 1113 - Week 04 - Thursday, 29 March 1990
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In this respect, I should make some specific comment on the notion floated recently by some that the ACT people would be prepared to pay more taxes to maintain present standards in health and education.
The major part of the Commonwealth overspend, identified by the Commonwealth Grants Commission, relates to these two functions. To cover the shortfall identified by the Grants Commission would require a tax on every ACT citizen - not just on wage earners - of about $300 a year. It is worth thinking about whether the assertion can be sustained in the light of this figure. It certainly puts the proposal into perspective and I doubt that even the most avid proponents would pursue this after the facts were on the table.
As I have already mentioned, the capital side of the budget will be constrained by our expected lower level of land revenues and the Government's commitment to a manageable level of borrowings. This has required the Government to scrutinise most carefully the projects submitted for 1990-91 new works program, as well as plant and equipment proposals. We are well down the track in this process and are confident that a program will be developed which covers our essential needs while improving our use of our existing capital base and ensuring that we do not overinvest in capital infrastructure in the future.
We are also taking into consideration the recurrent budget impacts of construction proposals. Every new public facility, whether a school, a fire station or public toilets, increases operational and maintenance costs to the budget. Each such demand on the recurrent budget makes our adjustment task that much more difficult.
These are the directions that the Government is taking to achieve its goals of a balanced recurrent budget, of reduced borrowings and of maximising the use of our infrastructure. No sector of government operations is being spared the intensive examination that is required to achieve our goals in this area. The Alliance Government has the strength and the will to achieve this, while committing itself to the provision of quality services directed to the needs of the community.
Conclusion
In conclusion, I re-emphasise the main factors which influence this budget strategy.
Firstly, there are the linkages between the economic conditions of the ACT and the budgetary imperatives. Presently this community is significantly influenced by the Commonwealth Government. When the Commonwealth sneezes, the ACT catches pneumonia.
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