Page 2069 - Week 07 - Thursday, 16 June 1994
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This budget has only one purpose, and a very short-term one at that. Its only role is to get Labor over the line at the election in eight months' time. That is why it is a Labor budget through and through, putting short-term political gain before responsible management every time. It is an irresponsible budget, one that avoids the tough decisions in case someone, just somebody, might be offended. Hence, a no decision budget - a budget that tries to keep the sinking boat steady for a short while, but at a longer-term cost to both Labor and the people of the ACT. It is a typical Rosemary Follett budget, a budget that denies the inefficiencies and wastes in its services. It is a budget totally devoid of responsible economic management. It is a desperate pitch for votes; but there is no courage, no leadership, and absolutely no vision. Certainly, it is a Rosemary Follett budget through and through.
What the Government fails to recognise is the consequences of its own projections of mounting debt. The budget deficit for 1994-95 is projected to be $64.5m. This will be funded by drawing down reserves by $28m and borrowing an additional $36m. In three years' time the Government expects to have borrowed a total of $212m, with total deficits over the five years from 1993 to 1998 amounting to a massive $283m. The Government's own figures show that it intends no restraint. The Follett Government deceives the people of Canberra by claiming in public that it has put the ACT on a low borrowing path, while the small print of its own budget papers shows that the Government is heading down a high borrowing path. It is a Labor budget through and through.
The cost of servicing the ever increasing debt is set to double. The cost is already becoming a major burden for the people of the ACT. The Chief Minister did not tell us in her speech that the debt servicing cost will escalate from $22.8m in 1993-94 to $40.4m in 1997-98. That is just the cost of servicing the debt. The Government's estimates also show that borrowings of $44m in 1997-98 will be about what it is costing us to service the debt at that stage. In other words, we are about to step onto the same debt treadmill which Victoria and South Australia are trapped on - borrowing to service debt. It is certainly a Labor budget, a Rosemary Follett budget.
Ms Follett: It is just that no-one agrees with you, Kate.
MRS CARNELL: That is what the figures show. Has this Government learnt nothing from the mistakes of Labor governments in the 1980s? There could not be a clearer demonstration of the manifest incapacity of the Follett Government to manage even its small economy than knowingly going down a path of more borrowings and deepening debt. Labor's poor management will cost our children dearly. That, of course, will not matter, provided that Labor can win an election next February, because that is all they care about. But, inevitably, Labor's massive debt burden will be borne by people in terms of higher taxes and charges and reduced services. It is happening already, but the budget does not even start to take corrective action.
At face value the Government has been able to gloss over the deteriorating economic situation because of a windfall pre-election payment of $55m from the Commonwealth - $55m that was not in the forward estimates. The Government's own estimate of Commonwealth funds for 1994-95 was $519m. Now we see that the Commonwealth will pay $574m - that is, $55m more than Ms Follett expected. Without it, the budget deficit
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