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Legislative Assembly for the ACT: 2004 Week 05 Hansard (Friday, 14 May 2004) . . Page.. 1961 ..

driven by taxes, fees and fines, grants and other own source revenue exceeds expenditure growth.

Note the grave warning: “expenditure outstrips revenue”. Then it hints—no, suggests—that the government will be baled out by increases in taxes, fees and fines. And this is the classic response of a Labor government: looking to increase taxes, fees and charges. This is the Labor Party doing what it does best: spend more, tax more.

Does Labor really believe that it can continually increase taxes to pay for its spending spree? Does Labor seriously believe that it can increase the tax burden forever and that people will respond by working harder? Those of you who are familiar with New South Wales politics might find that this is sounding a little familiar. The New South Wales government before the last election also budgeted for a modest surplus and then a deficit. And sure enough, after the election, taxes and fees were hiked up. This is the Labor way, Mr Speaker.

There are no revenue initiatives in this budget. But I am willing to wager with the Treasurer that should a Labor government be returned later this year we will be treated to a high-taxing mini-budget within a few months of the election. The horror of another four years of Labor would be followed by the horror of new and higher taxes. Will the government now give a commitment that there will be no new taxes or tax hikes if they are re-elected later this year? I look forward to that promise in high expectation.

The major concerns, the fatal flaws, apparent with this budget are:, unsustainable spending continuing to run ahead of revenue; the dramatic run-down in cash reserves over the outyears; and not making difficult decisions about the financial management of its trading enterprises such as Actew.

What is the government’s response to this emergent situation? If the scenario I have postulated is correct and these budgetary decisions are made, the territory is heading right back into a situation of another $344 million operating loss under a Labor government. It simply confirms the well-established adage “Labor can’t manage money”.

This Treasurer has badgered anyone who would listen, and many who try hard not to, with the idea that because he was once an accountant he is therefore infallible as a treasurer. Last year, members will recall, I put paid to that idea when I demolished some of his more foolish assumptions in last year’s budget. Unfortunately, both for Mr Quinlan and the long-suffering ACT ratepayer, in this latest budget he has done it again. We have been treated to the Treasurer’s economic ignorance.

Last year I explained to the Treasurer in very simple terms why he had been so silly in referring to what he calls the economic cycle. Those who know about these things know that what he probably meant to say was the election cycle. Once again in this year’s budget he has referred to the economic cycle, without any explanation, qualification or insight into what he means. He says:

What is important is that a surplus is delivered over the economic cycle.

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