Page 3060 - Week 11 - Tuesday, 11 September 1990
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Other measures aimed at assisting the funding of the capital budget include a one-off dividend from ACTEW of $4m and, as well, nine additional taxi plates and 250 low digit number plates will be released for sale by auction, and this is expected to raise an additional $1m in 1990-91.
Before leaving the revenue side of the budget, I want to address the consequences of the Commonwealth's decision on the bank accounts debits tax. The Commonwealth has announced its intention to relinquish this tax from 1 December 1990. Unfortunately, this otherwise sensible decision was not announced at the Premiers Conference despite the States' and Territories' call for the Commonwealth to vacate this tax area. Consequently, State revenue decisions, particularly in relation to financial institutions duty, had already been made before the Prime Minister's announcement on 19 July.
Financial assistance to the States and the Territories has now been adjusted downwards by the Commonwealth in the expectation that they will adopt either this tax or an equivalent. The cut for the ACT is $2.5m this year and $5m in a full year. The Government has no choice but to recoup the cut in Commonwealth assistance by an impost on financial institutions. It would prefer that to take the form of a further adjustment to financial institutions duty, but the final decision must have regard to the decisions yet to be taken by the States.
I turn now to borrowings. One of the four goals set by the Government in our March budget strategy statement was to limit our borrowings to responsible levels. This has been achieved in our 1990-91 budget. The total level of new borrowings to meet the financing of the capital budget has been limited to $44.2m. Of this, $27.1m is for general capital works where the debt servicing cost in future years will impact directly on the budget.
In deciding on this figure, the Government has come to a judgment on an appropriate level of capital works and the implications of borrowing for capital expenditures that do not produce revenue to service the debt. Despite the Commonwealth retaining significant funds in its Transitional Funding Trust Account, there is still a need to undertake important capital projects. Furthermore, there is justification for spreading the costs of some works over time so that later users contribute their share. As I have already said, I have sought $18.6m from the Commonwealth's trust account to fund part of the cost of restructuring the ACT public sector. Agreement from the Prime Minister would see borrowings for general capital works of only $9m, and that would minimise the pressure of debt servicing on future ACT budgets.
The Government was successful in persuading the Commonwealth to agree to the ACT having no debt in respect of its non-revenue producing assets such as schools and hospitals as at 1 July 1988. A similar claim in respect of ACTION and municipal debt was refused. Given those
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