Page 1277 - Week 05 - Tuesday, 16 April 1991
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COMMONWEALTH GRANTS COMMISSION
Ministerial Statement
MR KAINE (Chief Minister), by leave: Mr Speaker, the Commonwealth Grants Commission's fourth report of 1991 on the financing of the Australian Capital Territory was released on Monday, 8 April 1991. Given the significance of this report in the negotiation of Commonwealth funding levels for 1991-92 and beyond, it is important, I believe, that the Assembly be aware of the major implications of this report.
I would first like to correct a mistaken impression created in the media on this report. Contrary to the headline in the Canberra Times on Tuesday, 9 April, I do not ridicule the estimates of the general revenue assistance grant for 1991-92 included in that report. I take the commission's findings very seriously. As one expects from the commission, it is a well researched and comprehensive report. I congratulate the chairman, Dick Rye, the members of the commission and their staff, for completing a complex task during a period in which they had many other references to complete.
To set dimensions to the level of the $418.1m grant assessed by the commission for general review assistance for 1991-92, I point out that it is $70m less than the estimates for the equivalent grants included in the ACT forward estimates for that year. Our estimate of $488.8m was based on the assumption that the Commonwealth would maintain its contribution at this year's level. That was the only assumption that we could make in the absence of firm advice last year from the Commonwealth as to its intentions. The commission emphasises that their estimate of $418.1m needs to be used cautiously. In particular, it does not reflect the ACT's continuing requirements for Commonwealth assistance for functions outside the scope of its inquiry - an amount which the commission was unable to quantify. Nevertheless, the commission's imputation is that there is additional assistance to which the ACT is entitled. This issue will be taken up in negotiation with the Commonwealth.
It reflects, I think, the lack of full alignment of Commonwealth funding for the ACT with Commonwealth-State arrangements and therefore the inability of the commission to apply full comparability at this time. I trust that in these negotiations the Commonwealth will also take the commission's findings, and particularly its qualifications, seriously. The commission's report will represent a crucial element of our negotiations with the Commonwealth because it confirms the magnitude of the budget adjustment task transferred from the Commonwealth to us in the ACT. Its finding of overfunding of $135m in the year 1988-89 starkly shows the magnitude of the funding problem which must be brought under effective control by the ACT Government.
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