Page 1178 - Week 04 - Thursday, 21 March 1991
Next page . . . . Previous page . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .
Further declines in the rate of inflation and earnings growth are expected. The magnitude of changes in the ACT is difficult to estimate. However, the assumptions behind the forward estimates report of a CPI growth of 7 per cent and of incomes growth of 6 per cent for 1991-92, I believe, are now likely to be revised downward during the development of the 1991-92 budget.
The prospect of lower domestic inflation, lower interest rates arising from stabilisation of our national deficit on the balance of payments and pent-up demand for housing do provide support for a gradual improvement in the economic outlook for the ACT. However, the recovery may be delayed if the national recession is prolonged and if the Commonwealth moves to curb a possible deficit by stricter fiscal policies.
Mr Speaker, over the past few weeks there has been much speculation and rumour about blow-outs in some components of the ACT budget and the ability of this Government to manage the finances of the Territory within the budget parameters. No doubt much of this speculation has been fuelled by the knowledge that the Commonwealth and various State budgets have been reported to be performing well below budget forecasts, together with ill-informed speculation about some unexpected claims for budget adjustment, particularly on hospitals management. There is no denying that we are affected by the national economic recession, but not as significantly as Australia as a whole and States like Victoria and Western Australia in particular.
For the information of the Assembly I would now like to outline the significant trends in revenue and expenditure for the ACT's 1990-91 budget. At the outset, let me restate the broad parameters of the current year's budget. We have consolidated fund recurrent expenditure of $1,106m; we have capital expenditure of $261.7m; we have new borrowings restricted to $44m; and we have a recurrent budget in balance. Those were the parameters of the budget when we brought it down and they remain the parameters. When any minor adjustment is agreed, it must be seen in the context of the total budget and the net effect, if any, on the expected budget outcome. That is why I comment on uninformed speculation and rumour about budget blow-out.
As members will appreciate, a budget is not a static thing. My job as Treasurer is to keep the budget strategy under review as economic circumstances change. At budget time, we did allow for a downturn in some elements of revenue, with the budget projections for both revenue and expenditure reflecting that expectation. In overall terms, expenditure is being contained within the original estimate for 1990-91 and revenue targets are being achieved. There are, however, a number of underlying disturbing trends emerging. I will deal with them later. A balanced recurrent budget is still forecast. The budget requirement for new borrowings will remain at the level originally
Next page . . . . Previous page . . . . Contents . . . . Debates(HTML) . . . . PDF . . . .