Page 5205 - Week 17 - Thursday, 13 December 1990
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assumptions have had to be made concerning the level of general revenue assistance from the Commonwealth. It has been assumed that the Commonwealth will hold the general revenue grant at the current level for each of the next two years. This in effect means a cut of 7 per cent for 1991-92 and a further 6.5 per cent cut in 1992-93, consistent with the forecast inflation levels.
On this basis the Forward Estimates indicate that an adjustment of some $20m is required to achieve a balanced recurrent budget in 1991-92 and this gap increases to $39m in the later years. The Forward Estimates provide for a further $25m to be spent on restructuring each year and assume an annual expenditure reduction of 25c for each restructuring dollar spent. Continued funding for restructuring is essential if the ACT's long-term financial position is to be secured.
The recent rejection of my claim for assistance from the Transitional Funding Trust Account for restructuring projects in 1990-91 means that we are unable to cut our reliance on new borrowings below the budgeted figure of $44m. On the capital side of the budget the goal of minimising borrowings is being progressively implemented. The forecast shows that borrowings will decrease by almost one-third of the 1990-91 level in two years' time.
This goal is being achieved while undertaking the hospital redevelopment program and maintaining the rest of the construction program at the 1990-91 levels. The construction program to be undertaken by the Government in the future will not only help stabilise local activity in 1991-92 but also provide the base for a longer-term core program of essential works, thereby minimising the peaks and troughs that have affected the local industry in the past. The proposed level of new works also means that pressure will continue to be placed on improving the use of our existing capital base. In overall terms, Mr Speaker, it is clear that the budget strategy adopted in 1990-91 is soundly based and necessary to complete the transition to Statewide funding levels.
Mr Speaker, I intend to avoid massive across-the-board cuts. Specific expenditure areas will be targeted for reduction. Reviews of the land, policing, roads and environment and conservation programs are currently under way and further programs will be covered prior to the finalisation of the 1991-92 budget. I have noted the concerns of the Estimates Committee about the costs of consultancies and travel, and a tight rein will be kept on such expenditures.
I will be looking to commence negotiations on the level of general revenue assistance from the Commonwealth early in 1991. If arrangements can be established quickly, the ACT can look forward to continued progressive implementation of the four key goals forming the Alliance Government budget strategy and a stable business and economic climate.
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