Page 1877 - Week 06 - Thursday, 5 May 2005
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Sixthly, taxation initiatives. This government has not utilised the additional revenue received from the GST to rationalise the ACT’s mix of inefficient taxation measures—a failure of taxation policy. Seventhly, bushfire recovery. This government has not taken advantage of opportunities to gain assistance in funding the bushfire recovery activities—a failure of will and of action.
What does that all add up to? Failure. Complete, total and absolute failure by this government to implement consistent and appropriate budget strategies. What is really disturbing is that this failure has been a repeat offence over a number of years. Of course this government knows all about repeat offenders.
Mr Speaker, I set out a few moments ago the extent of the overspending by this government in each of the past four years. The total of this overspending was $685 million. This complete inability to control spending translates into an additional average spend each year of around $170 million, and that is quite an error between planned spending and actual spending. This is not because of the Treasurer’s errors in estimation; I suspect he got those right, although there are some that he did not. This is consistent overspending that represents conscious decisions made by this government to abandon good economic policy.
It represents bad judgment, and for many of us the profligate years of various Labor state governments around Australia in the 1980s and the 1990s are still strong in our memories and the memories of those communities. Equally strong in our memories are those drastic actions that had to be taken by all subsequent Liberal governments to repair the damage that had been done to these state economies. There is a simple outcome of profligacy: heartache and difficult decisions, and that is what will be required after this Treasurer’s fourth budget.
At some point, the day of reckoning arrives, and even governments need to be brought to account for inappropriate spending decisions. The tragedy from the perspective of the Liberal Party and indeed the ACT community is that we can see this awful pattern being repeated and the prospect of the Liberal Party, when next in government, having to repair the damage to the ACT economy, as we had to repair the damage from Labor’s legacy of a $344 million deficit in the mid-1990s.
Perhaps we should talk about deficit budgeting. Perhaps the most critical issue with this year’s budget is the proposed deficit of $91 million—$91 million in the red. Last year, I questioned the orthodoxy of governments budgeting for deficits at times of economic prosperity. Members will recall that the Stanhope government budgeted for a deficit in 2003-04, and it has done so again for 2005-06.
When I analysed the government’s decision to budget for a deficit, I questioned why a deficit was necessary in the first place. I also wondered whether this Treasurer had any idea what implications arise from budgeting for a deficit. Deficits, of themselves, are not necessarily unusual. Many of those who are students of budgetary economics will understand that deficits are used at times of economic downturns or, even if they occur, times of economic depression.
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