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Legislative Assembly for the ACT: 1997 Week 3 Hansard (8 April) . . Page.. 700 ..

MRS CARNELL (Chief Minister and Treasurer): I ask for leave of the Assembly to make a ministerial statement on the Premiers Conference and the Australian Loan Council held on 21 March 1997.

Leave granted.

MRS CARNELL: This year's Premiers Conference was again held in difficult economic circumstances, with States and Territories fearing that they would again be the main target of the Commonwealth's spending cuts. The Commonwealth's offer to the ACT represented a real reduction in general purpose funding for the seventh year running, this time of the order of 1.4 per cent and at a time when the Territory economy is in recession and the average real increase to the States is approximately 1.9 per cent.

It was certainly not something we were willing to take on the chin, arguing strongly that the ACT's economy had been particularly hard-pressed, to put it mildly, by the Commonwealth's spending cuts and that the Territory's current economic circumstances were a direct consequence of the Commonwealth's fiscal policies. While we sympathised with the Federal Government's need to close the budget black hole left by Paul Keating, we pointed out that it made no sense to require direct contributions to that deficit reduction from the ACT while we had problems that were significantly worse.

The lobbying prior to the Premiers Conference, as members can imagine was intense. I am able to report that my Government's efforts, though, were very fruitful both prior to and during the conference. Without such lobbying, the ACT's grants position would have been considerably worse than that reached at the Premiers Conference.

Mr Speaker, there were four particularly good outcomes achieved for the ACT at the 1997 Premiers Conference that I would like to outline. In the first case, prior to the conference, I pursued additional funding to the ACT in the form of an extension of transitional allowances. Against a backdrop of strong opposition from the Federal Treasury, we won approval from the Prime Minister to argue our case before the Commonwealth Grants Commission and, in fact, came away with a two-year extension of transitional allowances. The commission recommended an additional $10m in 1997-98 and $5m in 1998-99; and at the Premiers Conference the Prime Minister honoured that recommendation.

In the second case, I have been able to convince the Federal Government to reduce the ACT's fiscal contribution to its deficit reduction strategy in 1997-98. All States and Territories, with the exception of the ACT and Tasmania, will make payments totalling $627m in 1997-98, in accordance with the schedule agreed at the 1996 Premiers Conference. I took to the Commonwealth the case that it should not expect contributions from budgets in an even more difficult situation than its own. We again had success on this issue. In recognition of the ACT's difficult economic circumstances, which are

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