Page 1430 - Week 05 - Wednesday, 10 May 2006
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question is: why did the government allow its spending to increase by 13.6 per cent when it was obvious from the previous year that planned expenditure could not be afforded?
Similar to the poor forecast on the health budget last year, none of the national statistics, none of the published data, would suggest that the forecast increases in health spending bore any relationship to the reality of anticipated national increases in health care, nor on the pattern of what this territory has had to endure in terms of health increases.
As a result of failing to contain costs when revenue from the housing boom made budgeting easy, the government has left itself now with little room to move. I have restrained, and I have urged my colleagues to restrain, from promising things because, frankly, the government has taken us now into an awful predicament where it is very difficult to stimulate this particular economy from the territory government’s perspective because they have now almost got nowhere to go.
The territory’s best hope is to increase productivity in the delivery of services. I do not believe that there is commitment to the reforms required, but let us hope that we will be pleasantly surprised in a few weeks. There is virtually no scope for raising taxes and charges because, thanks to Labor, the ACT is already up with New South Wales, one of the highest taxing jurisdictions in Australia. If we keep increasing tax levels here, we will see people moving out of the ACT.
My colleague Mr Seselja has made the point in the past that people are already flocking to areas outside the ACT. They are doing so for a host of factors, I acknowledge, but taxes are always one of the factors, as are the cost of registering their motor vehicle, the costs of transactions and so forth. We have to keep in mind that we are in a competitive environment with other states and territories and, if this government cannot manage its finances appropriately, we will be in difficulties down the track.
This government has already been warned by Standard and Poor’s that it must repair its finances in the near term or risk losing its AAA credit rating. The news of a probable hike in interest rates comes at the very time that the government may find itself having to borrow substantial funds to keep going. There are many problems which have to be addressed by the government, but four stand out. They all reflect on the inability of the Chief Minister to provide leadership and manage the economy.
What is happening in the ACT is a demonstration of the old Chinese adage that a fish rots from the head. In this case, the head fails to face up to problems which are obvious to the average person in the street, he fails to consider any criticisms that do not accord with his own prejudices, and he has an unfortunate characteristic of grossly twisting and misrepresenting informed and well-intentioned suggestions. I am sure that, as the former Treasurer would have attested to, he works behind the backs of many of his colleagues. That is hardly a mix to encourage loyalty and team performance, which the people of the ACT are looking for.
It is imperative that this territory look at the growth in the size of the territory’s administration. During Mr Stanhope’s period as Chief Minister, some 2,000 public servants have been added to the government’s payroll, putting up its wages and superannuation bill by 40 per cent over the period 2002-03 to 2004-05. That cost has risen to $1,440 million and now soaks up 53.7 per cent of the budget.
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