Page 273 - Week 01 - Thursday, 14 February 2008
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the estimated financial position for the current year and budget estimates for each of the three forward years. This review confirms and reinforces the strong economic position of the territory. It justifies and rewards the government’s prudent financial and economic management. At a time when national and international risks loom, it insulates us from shocks. It provides us with security to address ever-increasing demands on our public health system. It gives us as a community and as a Labor government committed to public health the capacity to do what has to be done to meet and satisfy those demands. It allows us to plan for the future in an orderly and considered manner.
These are the priorities of the community: protection from unanticipated or uncontrollable shockwaves from beyond our borders and a preparedness to meet those challenges we can foresee, rather than leaving that task to the cost of future generations and future governments. Our history has been, until recently, one of unfairly putting off the costs to future generations. That has been our mistake as a territory, perhaps because, at first, we resented self-government being imposed upon us and, later, because we became accustomed to drawing down our assets to pay our bills. No more.
Mr Speaker, economic activity in the ACT remains frenetic. The residential and commercial property markets are strong. The volume of non-dwelling construction undertaken in the ACT was the highest on record. A strong demand for labour has resulted in an unemployment rate low unmatched in our nation’s history. We not only enjoy virtually full employment, but we also have the highest participation rate in the country. This does, however, pose challenges for businesses poised to grow and for those seeking to fill vacancies, challenges which we are addressing through initiatives such as our work with the Skills Commission and the live in Canberra campaign.
The good news is set to continue. The midyear review forecast is for the economy to grow at a solid rate of 3.5 per cent in 2008-09. Of course, the strong economic activity of the past year has had a positive impact on the territory’s financial position. The general government sector estimated budget outcome for 2007-08 has improved in the midyear review from a budgeted net operating surplus of $103 million to a revised net operating surplus of $196.2 million, an improvement of $93 million. Perhaps more importantly, thanks to the sustainable path upon which the government has embarked, the picture beyond 2007-08 is turning around. The territory’s projected surplus has improved to $159.9 million in 2008-09, rising to $213.8 million in 2010-11.
The strong performance in the current year reflects the impact of several things. As members will be aware, we have enjoyed increased GST revenue due to the Australian government’s larger than expected GST revenue pool and an increase in the ACT population. If even the federal government, the collector of those taxes and the one who calculates their distribution according to population, could not anticipate this additional revenue, there was equally no way the ACT government could have done so.
Other factors have contributed to our better than expected result. Land sales have boomed, a sign of our robust economy, and, as a consequence, taxes and tax equivalent payments, along with dividend returns from the Land Development Agency, have risen. Similarly, the territory has enjoyed strong conveyance returns, a
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