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Legislative Assembly for the ACT: 1998 Week 4 Hansard (25 June) . . Page.. 1064 ..

MR STANHOPE (continuing):

There can be no disputing the fact that this Government is making a real and measurable difference to the status of women in the ACT. The biggest problem is that the measuring stick is the unemployment queue.

Mr Speaker, there is an overriding reason, in purely economic terms, why this is not a clever budget. It is not clever, because it is based on unrealistic forecasts and because the Chief Minister's explanations are simply not credible. This budget's entire economic rationale revolves around a forecast that the ACT economy will outperform the national economy, the average of OECD economies, the United States and German economies and the world. This budget reveals, as the Chief Minister suggests in her explanation of why we can expect world's best performance, that we are indeed coming off a low base - coming off a base born in a recession generated by the Chief Minister's Federal Liberal colleagues. In 1996-97, the ACT realised an economic growth rate of 0.6 per cent. The figure for 1997-98 is forecast at 1.4 per cent - a creditable improvement. But the forecast for 1998-99 of 3.2 per cent is optimistic in the extreme, as is the suggestion that a 3.6 per cent average will be sustained for the ensuing three years.

Mr Speaker, the ACT economy has historically been dominated, naturally, by the public sector. No-one denies that the private sector in this town has done well recently. The budget papers reveal that fact. Private sector growth is running at more than 6 per cent and, as such, is outstripping other Australian jurisdictions. But that figure is coming off a very low base. It is simply not sustainable. Without that strong private sector growth - even given that, in the face of an election campaign, the Federal Liberal Government might put an end to its sustained attack on Canberra, even given the prospect that the Federal Liberals might be thrown out and a Labor government restored to the national capital - the Carnell Government's growth forecasts are simply not sustainable.

The budget papers themselves put the lie to the Chief Minister's credibility. Far from Mrs Carnell's claim that Canberra no longer has to rely on the public sector for its economic wellbeing, the papers reveal that, despite the strong private sector growth, it is nevertheless still outstripped, in expenditure terms, by the public sector. Yet it is private sector economic growth that underpins another key to this budget - revenue growth. Mr Speaker, this budget sees revenue growth this year of $43m in taxes, fines and user charges. While the application of some of those increased charges is questionable, the outcome does appear achievable.

But the budget also forecasts continued growth in revenue in the forward years - $182m over the next three years, or an average of something like $60m in each of those years. That money has to come from somewhere, Mr Speaker, if the budget's forecasts are to be met. It could come from increased economic activity, and this amount of money has to come from substantially increased and sustained economic activity, based on private sector growth. But we have already put the argument that those levels of growth are not sustainable. It is simply not realistic to expect this small, narrowly based economy to continue to outperform the nation and the world. The ACT's revenue base could increase with additional Commonwealth funds, of course. In fact, the budget papers reveal an expectation that some increase will indeed occur. But it is simply unrealistic to expect that Commonwealth funding will increase by $60m a year. The question that remains to be asked then is: Where will the money come from? Where will Canberrans be slugged next year?

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