Page 1655 - Week 07 - Tuesday, 29 May 1990
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likelihood of further cuts in Commonwealth funding to the States and, by implication, to the ACT for the fiscal year 1990-91. While continuing to press our case, we must therefore prepare realistically for the likelihood that the Commonwealth will continue to ignore the financial needs of the Australian Capital Territory. In the jargon, we must of necessity plan for the worst case scenario.
In her budget last year, the present Leader of the Opposition adopted a defensible, if limited, approach to the budget task. She had her hands tied, of course, by ideological Labor policies. All schools had to remain open and three public hospitals had to be maintained, apparently regardless of the loss in education and health services that would inevitably result and regardless of the fact that future budgets simply could not sustain the financial burden flowing from that approach.
Mr Connolly: Honouring election commitments, not like your lot.
MR KAINE: You were not in the election; how can you speak?
As a result of the Labor Government's unwillingness to take any hard decisions, the forward estimates for 1990-91, which are nothing more than a projection of the budget inherited from Labor, indicate that, to achieve a balanced recurrent budget in 1990-91, $27m has to be found. As indicated in my budget strategy statement, to make a further, very modest contribution to our overfunding problem of $10m, this figure rises to $37m.
As Leader of the Opposition, Ms Follett has retreated to the indefensible line that nothing significant should be done - absolutely nothing. We can only presume that her approach this year would have been again to trim at the edges, threaten service quality and impose a quite unsupportable tax burden. She would have found it impossible to achieve a balanced budget by taking such limited decisions. Indeed, by pursuing this line she would have exacerbated the budget problem in future years even more. Labor's approach does not address the fundamental issues. To pursue their line further would inevitably lead to bankrupting the ACT economy.
There are no easy options, Mr Speaker, for dealing with the situation in which the Commonwealth has placed the Australian Capital Territory. It presents a daunting task for even the most experienced of governments and treasurers. We cannot afford to mortgage our children's future by borrowing to pay for current expenditures. The States which went down that path have learnt from bitter experience that it leads to far greater problems in future years. Equally, I have made it clear that the Alliance Government is not willing to rely on increased taxes as the principal means of adjustment. To do so would place an unacceptable burden on ACT families and small businesses. It would also put at risk our strategies for promoting
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