Page 1765 - Week 06 - Tuesday, 6 June 2006
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Under this system of accounting, land sales and unexpected stock market gains—or losses—on superannuation investments will be excluded from operating revenues. The vagaries and volatilities of the stock market and asset sales therefore will have no impact on the territory’s headline measure.
Consistent with the accounting standards under which budgets are required to be prepared, territory governments have in the past included these as revenues and made recurrent spending decisions on that basis.
No longer, Mr Speaker.
It goes without saying that in the short term, under the GFS measure, the territory budget will record considerable deficits. That is one of the reasons that no earlier government has ever moved to GFS.
It would have been easy—indeed it was very tempting—for the government not to adopt the GFS standard at this time, to leave that, as earlier governments have done, along with all the other tough decisions, for another day.
After all we are forecasting substantial surpluses very shortly, under the current accounting standard—the basis under which all previous territory governments, of all political persuasions, have prepared their budgets.
But my government believes that this too is a decision that could not wait.
The adoption of GFS is consistent with my government’s strategy of reducing reliance on land sales and unexpected stock market windfalls. Once the switch has been made, no government ever again can be tempted to ignore the underlying reality of the territory’s fiscal situation.
Having grasped the nettle, I am pleased to announce that the budget forecasts GFS net operating cash surpluses across each of the forward years.
Mr Speaker, those results are no accident. They are not down to luck or a stock market gamble. They are down to a Labor government determined to put this territory on a stable financial footing.
The reforms announced today in this budget put the territory on a path to achieving eventual GFS surpluses.
Mr Speaker, while we have adopted a new standard, money from future land sales will continue to be recorded on the balance sheet—or capital account—and will of course remain available to the government of the day, to acquire new or replacement assets.
Similarly, any gains on our superannuation investments will be posted on our balance sheet and will be available to meet liabilities looming into the future.
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