Page 1843 - Week 07 - Wednesday, 22 August 2007
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stating that “the government was either incompetent or had deliberately plotted to use the threat of a deficit to pursue its financial agenda”.
Treasurer, why were your estimates for the last financial year so inaccurate? Why were they so wrong? Was it due to incompetence or did you use the threat of a deficit to pursue your agenda of tax increases and cuts to vital community services?
MR STANHOPE: I thank the Leader of the Opposition for the question. A number of statements made by the Leader of the Opposition in his preamble are simply not correct. I would challenge the Leader of the Opposition to find a suggestion that I used a budget deficit per se as the basis for decisions that the government took in last year’s budget.
I know that it was reported thus. But the underlying rationale for the budget handed down last year, which was a result or a feature of the undertaking of the strategic functional review, was around a range of inefficiencies; around the need for efficiencies to be found within the ACT government administration across the board, in acknowledgement of the fact that historically—since self-government and indeed before—the levels of government expenditure within the ACT have ranged somewhere between 20 and 30 per cent above national averages.
If there were an underlying rationale or reason for the decisions that the government took in last year’s budget, it was that: it was around the inherited inefficiencies and the inherited level of expenditure that have been a feature of governments within the territory since self-government and—indeed as all of us long-term Canberrans know—before self-government. We know about the levels of investment infrastructure, which was a feature of commonwealth administration of the territory. We know about the level of investment in our schools, roads and other physical infrastructure. We know about the traditional levels of investment in health and education which pre-date self-government.
And, on self-government, successive governments have striven to maintain that level of government service delivery. We have done it to the extent that—even today on perhaps the most up-to-date analysis; Treasury began this task—we continue to invest in government services within the territory at a level significantly higher than the national average. It is a simple equation: you cannot keep delivering government services in health and education, and across the board at between 20 and 30 per cent above the national average and maintain an average level of taxation effort unless you have another source of income.
Governments since 1989 have found that other source of income in land. What every government since self-government has done is balance its budgets through the utilisation of the Australian accounting standard, which essentially deals and accounts for land sales or an asset sale in a way that is unsustainable. It is a finite resource. It is an asset. It has been applied to recurrent expenditure. It has been used to balance budgets.
Those were the reasons that the government instituted the budget or the change. Because we as a government—the first government since self-government—decided to look the issue in the face, take the hard decision and bear the consequence, the
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