Page 3002 - Week 10 - Tuesday, 14 September 1993
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Total Territory based revenues are estimated to grow, after adjusting for new Medicare arrangements, by 2.6 per cent in this budget. This outcome is the result partly of continuing moderate strength in the ACT's economy, partly of a number of unusual effects, such as the once-only nature of last year's casino premium, and partly of budgetary measures which I will spell out later. Budget expenditures, corrected for technical adjustments, will rise by only 2.6 per cent. This is significantly less than the forecast rise in consumer prices. It represents a fall in government spending of 1.6 per cent in real per capita terms.
Funding for new initiatives has been contained to sensible and affordable proportions. Only the most necessary social programs, replacement or acquisition of essential equipment, and restructuring initiatives have been funded. We embarked last year on a number of savings initiatives, in particular in ACTION, and required most government agencies to find 2 per cent efficiency gains, with additional savings of 2 per cent this year and next. The continuation of our expenditure containment strategy will see significant savings measures taken in health, education, and fire and emergency services. Other services, namely, pensioner concessions and services provided by the Housing Trust, have been retargeted in order to maximise benefits to those most in need.
Madam Speaker, I turn now to the specific measures contained in the 1993-94 budget. Recurrent revenues raised from the Territory's own sources are estimated to rise by 6.1 per cent in 1993-94 to offset in part the fall in Commonwealth-source revenue. As I mentioned earlier, this increase is in line with real growth in the Territory economy. The major boost to revenue this year is the new setting for general rates and land tax announced in June. The increase in rates was designed to raise revenue from this important source by just 5 per cent, or about 2 per cent above the CPI. The only instance of a lower increase since self-government was a 4 per cent rise in 1991-92. The consistent and moderate approach by this Government contrasts sharply with the massive 16.1 per cent rates increase under the Liberal Alliance Government.
Of course, owning a valuable asset like a home does not always mean that the cash to pay the rates is easy to find. Accordingly, we will make the rates deferment provisions for pensioners more attractive and raise public awareness of assistance measures. I also announce today reductions in the penalty rate for late payment of rates or land tax from 20 per cent to 17 per cent, and in the interest on deferred rates from 12 per cent to 9 per cent. These rates are based on market rates and, for late payments, a penalty of 8 per cent. They will be adjusted in future to follow changing market rates. The Australian Taxation Office has adopted a similar arrangement, and other States are looking at parallel models. The graduation in the land tax scales introduced in June will raise $7m, principally from larger businesses.
A further revenue measure introduced in this budget is intended to maintain the real value of our revenue base. From 1 November the fuel franchise fee, which has been frozen for the last three years, will be restored in real terms to the same level as in New South Wales, and it will be indexed in the future. The fee will rise by approximately 0.5c per litre and will raise $700,000 in 1993-94, or about $1m in a full year. The level of petrol prices in the ACT is a matter of considerable concern to the community and the Government, especially after the increases
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