Page 29 - Week 01 - Tuesday, 7 April 1992
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QUESTIONS WITHOUT NOTICE
Commonwealth Funding
MR KAINE: I would like to address a question to the Chief Minister and Treasurer. The funding transition for the ACT has now been under way for some years and the ground rules were set down quite clearly in the Commonwealth Grants Commission's most recent report of 8 April 1991. Despite that, the media has it that the Chief Minister has asked the Commonwealth for another handout of $63m. On the basis of that, I ask the Chief Minister and Treasurer: First of all, what is the expected reduction in Commonwealth funds for 1992-93? Secondly, what budget gap is there arising from issues other than this reduction in Commonwealth funds which was totally expected? Thirdly, what does the Chief Minister propose to do to cover this shortfall when the Commonwealth rejects her handout request completely, as I would expect them to do?
MS FOLLETT: I thank Mr Kaine for the question. I think, first of all, Madam Speaker, that I should make it very clear that the $63m which Mr Kaine has referred to and which is referred to in the Canberra Times article is not a figure which I have used. It is well known, of course, that $53m was given to the Territory by the Commonwealth last year and that that figure represented the real terms guarantee that the Commonwealth gave to the ACT upon self-government. So, it is money which was in fact ours but which the Commonwealth, in its wisdom, had set aside in a trust until the three-year guarantee period had expired. So, that $53m I do not expect to see again; Mr Kaine does not expect to see it again; and, more to the point, the forward estimates which I published last year assume that we will not see it again. So, that is dealt with.
There is, of course, a case to be made for the ACT to the Grants Commission for some continued recognition about transition to self-government. That case has been made and I expect that the Grants Commission will be reporting at the end of this week on that updated situation. We have put forward the case for the ACT to continue to receive some recognition of the fact that we are in a transition period. Also, of course, it must be acknowledged that in the recent period we have acquired, and will acquire, additional responsibilities - the court, for instance, as I am sure Mr Kaine is aware. So, to answer that first part of Mr Kaine's question, it is $53m which we will not see again, I acknowledge that, and the figures that have been put forward reflect that.
There is, however, a further expected reduction of some $10m in transitional allowances assessed by the Grants Commission in its last report. Again, Madam Speaker, I would say that that is not unexpected; that we had always known that over a period the ACT would be required to move to full State-type funding. So, there is to be a gradual phasing out, as the Grants Commission has envisaged, of the transitional allowances.
Nevertheless, Madam Speaker, I think it is very fair to say that all of those matters have been taken account of in the forward estimates which have been published. If Mr Kaine has had an opportunity to study those forward estimates, he would see that they are based on the known position, that they have taken into account the Grants Commission's work to date, and that they foresee a gap, if you like, in the next financial year of something over $5m. In further years the gap is somewhat larger. It is about $5m in this first year.
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