Page 1278 - Week 05 - Tuesday, 16 April 1991
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It must be noted that this figure - the zenith of overfunding - occurred in the last year of Commonwealth financial management which also happened to be the first year of a so-called three-year transition period in which we were supposed to be reducing our expenditures. The Hawke-Keating Labor Government clearly abandoned any attempt at fiscal control in the ACT in the years before self-government. Problems were addressed by throwing money at them, with such irresponsibility that we were left with only two years to adjust - not three. We were left with a base significantly higher than any of us here would have realised. It is significant that the Leader of the Opposition has consistently rejected my view that major adjustments were necessary. In fact, she is still saying it, surprisingly.
The irresponsible approach by the Commonwealth, and the failure to assess the true situation exhibited by the Labor Party in opposition here, contrasts with the measures that my Government has taken to reduce what would otherwise be an unmanageable financial burden on this community. Mr Speaker, you will recall, for example, that the 1990-91 budget papers, reflecting the first Alliance Government budget, showed an $81m improvement in a full year in the ACT's recurrent budget. That represented more than 7 per cent of the total expenditures. This reflected hard decisions, taken of necessity, to address the task of reducing our expenditures - decisions that we have taken despite their unpopularity in some quarters.
The commission has concluded that for 1989-90, the first year of self-government, the Commonwealth should accept full financial responsibility for past levels of excess expenditure. That is a conclusion that I thoroughly endorse. It recognises that in the early years of self-government the ACT remains, to a large extent, locked into past expenditure patterns inherited from the Commonwealth. Most importantly, the report recognises the need for transitional arrangements to enable this past overfunding to be addressed systematically, logically and fairly. To be fair to Ms Follett, it must be observed that she has consistently argued, as I have, that ongoing transitional arrangements are essential.
I am gratified that, in view of the magnitude of the expenditure adjustments still required, the commission has now accepted the validity of that argument and has proposed special transitional funding allowances. The report, therefore, provides a more rational and ordered basis than has previously existed for the transition of ACT finances to a State-like basis. It does not, however, reduce the need for expenditure constraints or the urgency with which the ACT must address the fundamental overexpenditure in key service areas such as health, education and policing.
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