Page 2256 - Week 09 - Tuesday, 15 September 1992
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ensure a continuous stream of local employment over the medium term. There remains, however, a continuing and unavoidable reduction in Commonwealth funding to the ACT. It is an inevitable consequence of the largess of earlier Commonwealth spending, over which the Canberra community had no control.
For the first time, the Government has decided to publish the forward estimates at the same time as the budget. These estimates, based on existing government policy, show in clear terms that there remains a challenge to live within our diminishing means. They also show that the Government is managing this task in a responsible manner. The Commonwealth Grants Commission's recommendation on funding to the ACT for 1992-93 provides the Territory with $78.9m more than would be due on a State-like basis. This funding will be phased out completely by 1996-97. There is no comfort from the fact that the Commonwealth's general revenue assistance to the ACT in 1992-93 has been cut by more than 6 per cent, compared to a real increase for the States. Further cuts can be expected in future years. Our task is to manage the adjustment in a way that protects the fundamental quality of our community and our city.
I turn, Madam Speaker, to the budget in overview. The 1992-93 budget for the ACT responds to these challenges. It protects Canberra's future. We have produced a balanced recurrent budget. Recurrent expenditure is estimated at $1.1 billion - an increase of 3 per cent in nominal terms, or a reduction of 2 per cent in real per capita terms on 1991-92. We will not leave a legacy of borrowings for ongoing activities which would burden future Canberrans. Central to our strategy is a balanced set of revenue measures, together with efficiency savings. This budget is the first of a three-year program to honour our election commitments. The policy initiatives announced today amount to $9.6m this year.
In our continuing drive for increased efficiency in the public sector, enhanced training, restructuring and improved management policies will be central to our efforts. The 1992-93 budget provides $6.9m for restructuring projects, with annual savings by 1995-96 expected to be $5m. We have also balanced immediate priorities with our accruing liabilities and have set aside an additional $17.7m for the general government sector in our superannuation provision trust account. The Government has budgeted for a capital deficit in 1992-93. This will be funded by $20.8m from Consolidated Fund reserves and $23.3m in new borrowings. It is a very clearly calculated decision designed to generate jobs in our local economy.
Madam Speaker, turning to revenue measures, the ACT's own source recurrent revenues for 1992-93 are estimated at $521m, an increase of 5.5 per cent on 1991-92. This increase is in large part due to the range of measures I announced in June this year, to align with States such as New South Wales and Victoria. Today I am announcing only one new tax measure - an increase in the financial institutions duty rate from 0.08 per cent to 0.1 per cent. This will raise an additional $3.6m in 1992-93 and $6.3m in a full year. This new rate recognises that the ACT, unlike the States, has no bank account debits tax. The revenue gain, in total, is similar to most States, but the ACT will still benefit from a simpler and less costly administrative and compliance regime. The tax is broadly based, and is consistent with our efforts to avoid targeting the business sector, particularly at a time of recession.
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