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Legislative Assembly for the ACT: 2004 Week 07 Hansard (Tuesday, 29 June 2004) . . Page.. 2930 ..

Apparently, what has changed is the Treasurer’s ability to actually predict the economic cycle. If we assume that he can place dates on the chart he provided, because he insists he can predict the economic cycle, where are the dates? That is the critical question.

I think it is quite clear that the Treasurer does not understand what his problem is when he talks about the economic cycle. In budget paper 3 for 2003 the Treasurer talks about the economic cycle through to 2005-06. Well, Treasurer, we have not reached 2005-06. I would be keen to see you indicate exactly where 2005-06 is on the chart. Many of the economists out there, including federal Treasury officials, and I am sure your own Treasury officials, would be pleased to see where the date is.

It is simply not possible for you to say what point in the economic cycle we will reach in 2005-06. Will we be at a peak? Will we be in a trough? Will we be in contraction? Will we be in expansion? You do not know. There is the challenge for the Treasurer. When the Treasurer gets up, perhaps he can point to this chart and say, “That is where we will be in 2005-06.” And if he does, then he will be guessing, because you cannot predict the economic cycle.

Mr Quinlan: That’s economics, baby.

MR SMYTH: The Treasurer says, “That’s economics.” He could be correct. We have this foolish insistence because his pride is getting in the way. He has made a mistake and he has repeated it this year. Treasurer, if you know when the economic cycle is going to end, you should not be sitting over there; you should be out there in the market making an absolute fortune. I suggest again, Treasurer, that what you are talking about is the electoral cycle, not the economic cycle.

On the subject of economic cycle indicators, I have to say that this budget is the budget of lost opportunities. It is a budget that has had the benefit of more than $200 million worth of surpluses over the last three years. That has been squandered. Even great economic commentators like the editor of the Canberra Times have said that it is the budget of lost opportunities.

As we have been saying for the last couple of years, what we should have been doing is building infrastructure, investing in the future, or putting cash away to secure us against the future, not spending all of it. And that is, in effect, what we have been doing—we have squandered a surplus, the like of which the territory is probably not going to see for a number of economic cycles; and I am sure the Treasurer will enlighten us as to where we are in this cycle. In this respect, one only has to look at some of the editorials and articles that have appeared recently in the press. For instance, this morning’s Canberra Times contained an article headed “Business confidence tipped to stay flat”, and there are a number of arguments about that.

Members will be surprised that, given the self-congratulations and the praise the Treasurer has heaped upon himself and his budgets in the last couple of years, the Chief Minister astounded the whole room at an MBA dinner on Friday night when he got up and said that the good state of the ACT economy was fairly and squarely because of the good work of the construction industry. Many were surprised because we all thought we had the leading light of economic and Treasury management with us sitting at our table,

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