Page 1875 - Week 07 - Tuesday, 14 June 1994
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change to the presentation of budgetary information and to the timing of Assembly scrutiny and debate, and I welcome the cooperation of the Assembly and its committees. We have not let the earlier timing prevent full and open consultation with all major sectors of the community. As in earlier years, I have met, and had useful discussions with, key organisations and received written submissions from others. In formulating this budget, careful consideration has been given to all the views expressed to the Government.
Madam Speaker, our financial relationship with the Commonwealth continues to impose the most difficult pressures on the Territory. Last year, the ACT suffered unheard of reductions in general purpose grants. These grants, which represent nearly a quarter of our budget, were reduced by 20 per cent in real terms. This year, favourable trends in demographic statistics and some adjustments in the Grants Commission's methods have partially redressed that situation. However, at the Premiers Conference in March, the Commonwealth unilaterally abolished general purpose capital grants which were of disproportionate importance to the Territories. I was able to argue successfully for special relief to offset this further blow, but that relief is only temporary. The goalposts have been moved once again, and the ACT faces an even greater adjustment task. So it is worth reminding ourselves that, until the transition to State-type funding is completed, the Territory has to cope with the most difficult financial adjustment ever demanded of any State or Territory in the history of Federation. Overall, despite being somewhat less severe than we feared in last year's forward estimates, our general purpose funding for 1994-95 will be $18m, or 5 per cent, lower than in 1993-94.
There are many competing demands upon the public purse. This budget strikes a careful balance between maintenance and expansion of assistance to those in need and the level of taxation it places upon ACT residents. The budget has also been framed to fit well within the forward estimates published in the last budget and to continue to achieve recurrent surpluses to pay for a significant part of capital spending. Borrowings will be held to manageable levels throughout the remaining years of adjustment to lower Commonwealth funding.
The aggregate figures for the 1994-95 budget year demonstrate our sound financial management. Recurrent outlays are estimated to fall by 2.7 per cent in real terms per person. This is achieved without reducing services to ACT residents. At the same time, the real tax burden per person is expected to drop. Capital spending on all ACT works will increase by $10m to over $200m. We have achieved this result by capitalising on the budget strategy measures put in place in previous years.
The budget continues to contribute to superannuation liabilities to ensure that costs in future years do not disrupt programs or require resort to high taxation. We have avoided raising new taxes or increasing tax rates. Own-source revenues are expected to fall by 2.4 per cent in real per capita terms. General rates have been set so that overall rates paid will increase by only the expected rate of inflation after accounting for growth in the number of properties. The state of the property market means that domestic ratepayers will pay a little more than inflation - an average of $26 a year - while ratepayers on commercial properties will pay less. The land tax rate will not be changed from that set last year, resulting in a marginal reduction in land tax collections.
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