Page 1210 - Week 05 - Tuesday, 11 May 1993
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Those taxes that are within the ACT's discretion, property taxes such as rates and land tax, for instance, can be adjusted to produce additional revenue; but, while they represent up to a quarter of all ACT recurrent revenue, our revenue effort, as I have already pointed out, is already comparable with the States'. Hence, penalties might be incurred by excessive revenue raising effort. In particular, of course, there is a political risk, a high political risk, for any government taking this course. The private taxpayer out there is not going to be too pleased about paying taxes at a higher rate than anywhere else in Australia.
On the expenditure side, the two greatest single areas of standard overexpenditure are the most difficult to restrain. Health and education together make up about half of our budget expenditure, and it has proved consistently difficult to constrain expenditure to the amounts budgeted for them each year.
Mr Wood: No; we have been doing it, no trouble.
MR KAINE: No, you have not. I am glad that we brought that up, Mr Temporary Deputy Speaker. Again this year the health budget is already about $8m overexpended against what was originally allocated to it, and you cannot argue the case. It matters not whether the excess expenditure is covered in whole or in part by business rules agreed by the Treasury. The net effect is that this year $8m more has already been spent on health than was anticipated when the budget was brought down last year.
You can talk at the beginning of the year about cutting your budget. You reduce it by one per cent or 2 per cent, and by the end of the year it has increased by 5 per cent and you still talk about reducing expenditure. You have not succeeded, and there is no likelihood in the immediate future that you will. It is clear that, given the demonstrated inability to constrain such expenditures, the amounts of overrun must be added to the $68m Commonwealth reduction to arrive at the total gap in developing next year's budget. It just does not go away, and you cannot keep adjusting your budget base down every year anyway. Overexpenditure in any area of the budget other than health will also add to the total amount that has to be found to cover 1993-94 expenditures. This is not news to the Treasurer. She knows. So we have to look at what the big gap is going to be.
It must be becoming increasingly obvious, Mr Temporary Deputy Speaker, that there are two possibilities, and only two possibilities, open to the Government in meeting the increased bill next year - apart from the remote possibility of raising more money from taxes, and the Chief Minister has been very cagey about that. The two options are that the Treasurer can spend less or she can borrow more. It is already patently obvious that this Government is not capable of effectively reducing costs. While claiming budget reductions, it has presided over the maintenance of budget levels through a transfer, regrettably, of resources from small-scale general community activity across to the big ticket items such as health and education. That is where the money is being consumed. I therefore have very serious reservations about the Government's ability to do it next year, when it has not been able to do it so far.
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