Page 2296 - Week 08 - Friday, 21 June 1991
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1992-93. I also put to Mr Kerin a number of immediate concrete measures to relieve the pressure on ACT finances; but he made it quite clear that the Commonwealth would not reopen its Premiers Conference decisions.
I will, nevertheless, be pursuing specific matters, such as the ACT forests and the release of Commonwealth land to the ACT. I will also be reviewing the need for greater certainty in the Commonwealth-ACT financial relationship, and will again raise the need for a financial agreement.
Mr Speaker, members will be asking what the Premiers Conference decisions mean for the ACT budget. The ACT's forward estimates had assumed a worst case scenario of Commonwealth payments being maintained at the same money levels. Given the transitional stage of ACT finances, we could have expected a somewhat higher level of assistance. In fact, our general revenue grant has been cut by 8.2 per cent in real terms. It means an unprecedented cut of 5.4 per cent below the level that would have been paid had the same money levels been provided.
This result - even this result - was achieved only by the Commonwealth releasing $53m of our own funds. We have thus exhausted all the funds withheld by the Commonwealth for transitional assistance, and no assurance has been given that similar levels of special assistance will be paid in future years. This was an extraordinary situation to face on coming to office earlier in June. But, face up to it is exactly what this Labor Government has done. We have already taken a series of important and difficult decisions.
First and foremost, we have pledged ourselves to a balanced recurrent budget. We must maintain the financial credibility of the ACT Government. Equally importantly, we have pledged ourselves to a budget based on social justice. We will not close schools; in fact, we have already announced our decision to reopen Cook and Lyons primary schools. We will not abandon public health services, and we will not impose new overall burdens on ratepayers.
We have also considered how best to use the one-off release of funds from the ACT transitional funding trust account. It would be quite wrong and misleading simply to use this money to prop up recurrent expenditure. We have pledged ourselves to use the $53m special assistance provided by the Commonwealth to produce lasting benefits in future ACT budgets. This money will be used to eliminate the need for new borrowings in 1991-92, and to finance restructuring proposals that will result in significant reductions in future recurrent expenditures. The impact of not borrowing is expected to lower interest costs by $3m. More importantly, in 1992-93, the effect of not borrowing in 1991-92 will be savings of $7.5m. The Government has decided that, as a general measure, discretionary
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