Page 1246 - Week 04 - Thursday, 4 May 2006
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midyear review has forecast deterioration in the territory’s operating result over the next few years. Like any fiscally responsible government, we will address this through the 2006-07 budget. In doing so we will, of course, draw on the recommendations of the review, just as we will also draw on detailed submissions that have been made to cabinet by each minister in relation to all aspects of the operation of his or her portfolio.
The government is committed to responsible financial management and maintaining the operating budget in balance over the economic cycle. We all know the logic of this. A balanced operating budget means that each generation of the ACT community pays for government services as they are delivered. Future generations will not be asked to pay interest and debts arising from past spending on services that were consumed by their forebears. This approach delivers intergenerational fairness.
We also know that a balanced operating budget also provides a sound foundation for the ACT to better manage any uncertainties and risks that may emerge in the future. But the old verities of the past are vanishing. As time passes the ACT budget becomes more exposed to fluctuations and risks. To give one example, we can no longer rely on land revenue as heavily as we did during our years of rapid population growth.
To deliver good outcomes for the Canberra community the ACT budget must be lodged upon the soundest possible footing to deal with any risks and to be insulated against the unexpected. I do not pretend that the decisions that must be taken will all be easy or pain free. They certainly will not be politically pain free. But I know, as does everyone in this chamber, that the ACT community will be the winner from the functional and strategic review and from the process of reform upon which the government has embarked, a process of reform that will be reflected in the 2006-07 budget when it is delivered by me on 6 June.
The ACT government has undertaken a major task of reform and review. It is the focus of the upcoming budget. To put in perspective the comments that I have just made, it needs to be understood that the decision to commission Mr Michael Costello and Mr Greg Smith to undertake the functional and strategic review was taken by me immediately post the passage of the 2005-06 budget.
My first approach to the department for the development of terms of reference and the first decisions in relation to the selection of two experienced and very eminent experts in Mr Michael Costello and Mr Greg Smith was made by September. The decisions were taken in October. The functional review commenced in November with a specific focus, as the terms of reference indicate, on this year and this budget. Those decisions were made well in advance of the committee review and well in advance of the midyear review process that delivered the predictions of, and information about, a deteriorating budget outlook.
The government’s intention from the outset was very much about a strategic assessment of the efficiencies of the ACT government’s systems and structures. This was always a review of the future. This was always a review to ensure sustainable levels of expenditure following an era of significant growth and expenditure, most particularly in that area of largest government expenditure, health. It is an area of expenditure that, by itself, accounts for 24 per cent of all territory expenditure.
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