Page 1466 - Week 06 - Wednesday, 6 June 2007
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consecutive surplus—a picture that contrasts starkly with the four consecutive deficits recorded by the previous government. It is all the more pleasing that this budget delivers a surplus under the new accounting system that the government adopted in last year’s budget.
This budget is a prudent budget. It is the right budget for the ACT. It is a budget that takes the territory forward by investing in areas of greatest need and greatest importance. It ensures that ACT residents can continue to receive the high level of services they demand, but without leaving the bill to future generations.
To put this budget in context, the ACT’s expenditure on government services, as we all know, was around 20 to 25 per cent above the national average before last year. Our revenue-raising effort, on the other hand, has been around the national average. This was not sustainable. We all know that it was not sustainable. The numbers did not add up. We all know that the numbers did not add up.
To address the imbalance, Labor embarked on a major structural reform as part of the 2006-07 budget—reform that would maintain capacity for investment in physical and social infrastructure, preserve the high quality of services and outcomes in priority areas and provide a buffer against any potential fiscal shocks, including the potential for a fiscal shock that might be a result of a continuation of the drought.
Efficiencies flowing from that reform have reduced the cost of administration and directed the savings to front-end services. Efficiency savings will total $383 million over four years. In 2007-08 those efficiencies total more than $99 million. This would equate to around $9 billion in a commonwealth budget.
One of the traps we see in commentary on an ACT budget and on ACT finances comes from a misunderstanding of the size of the ACT budget and the implications or effects of just a $3 million, $4 million, $5 million or $6 million investment or change. When you consider and contemplate this—and it needs to be done in order to fully understand the significance of this surplus and some of the decisions taken in this budget—you will see that, for instance, $99 million in the ACT equates to $9 billion in a federal budget. That is how significant some of these things are.
The full effect of the efficiencies to be realised in 2009-10 will be around $118 million a year, or 3.6 per cent of total expenses. In other words, expenses in that year would have been 3.6 per cent higher if the efficiencies were not in place.
This budget is prudent because it maintains fiscal restraint while allowing the government to invest in new policy initiatives in priority areas—new hospital beds, more elective surgery, additional funding for disability services, additional funding for mental health and more ambulance officers.
The budget is prudent because it builds on the government’s achievements in key service areas—taking the territory forward, not backward. For example, the government has increased expenditure on health by over $355 million since 2001, funding more hospital beds, elective surgery, medical and nursing staff and greater operating theatre capacity. Canberra’s public hospitals now admit more than 75,000 patients a year. There are 147 more hospital beds than when we came to government.
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