Page 1034 - Week 04 - Thursday, 18 June 1992
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If fine words and good intentions were what was necessary to develop a sound budget strategy in difficult financial circumstances, the ACT would be in a very good position.
Indeed, that is true. I have no difficulty in agreeing with some of the platitudes of which the budget strategy largely consists. Indeed, some of the statements made by the Chief Minister basically reflect what the Liberal Party said during the election campaign, with the exception that we went further and said what we would do to address the problems. To us, the problems are self-evident and solutions readily present themselves. But the evidence suggests that the Follett Government does not see that as being so.
The budget strategy does not provide solutions to problems. Rather, it is more in the nature of a statement of the known problems. For example, the Chief Minister said:
We must reduce the cost of delivering government services in order to sustain the services themselves. No area of expenditure can be quarantined in the search for increased efficiency.
She is absolutely right. But that is a statement of the problem. Where is the evidence of action to satisfy it? She has already produced two budgets but has not on either occasion shown the will or the conviction to apply the knife where it is necessary. I see no will or conviction to do so in this third budget either.
Ms Follett leads a high taxing, high spending government that now finds itself in a tight budgetary situation which, astonishingly, seems to have caught them by surprise. The December 1991 forward estimates - that is only six months ago - projected a potential budget gap of $40m for the coming year, 1992-93. Now, six months later, out of the blue comes the revelation that we are running at a $73m shortfall. What that means is that the ACT taxpayer is in for a $73m shock, starting on 1 July. The Government seems as surprised at this state of affairs as anyone else, and the Chief Minister, after the financial Premiers Conference only last Friday, said that her Government had not yet given consideration to measures to deal with it.
The longer this Government delays facing up to the tough decisions necessary to close the budget gap, the greater will be the financial hardship the ACT taxpayer will have to accept in order to meet the expectations of this Government. Indeed, it is already too late, in my view, for decision making in some respects. The decisions should have been made a long time ago. But the Follett Government, as usual, has delayed confronting the hard decisions for far too long. The Alliance Government began a process of necessary change in 1990-91. The Follett Government should have continued that process in 1991-92 but failed to do so.
Had the Government in this current year not spent our entire reserve funding as though there were no tomorrow, had it invested in structural and micro-economic reform, had it maintained a longer-term view than just one year, the budgetary problems with which it is now confronted would have been far less. Regrettably, the Follett Government has no clear vision of where it is going. It has no strategy; it has no plan. It merely makes ad hoc decisions from one year to the next, and this has resulted in a totally ad hoc approach which lacks direction.
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