Page 620 - Week 02 - Thursday, 6 March 2008
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rush out immediately and say, “Thank goodness the government had the foresight and the strength to get our balance sheet in order, to adjust our budget, to get our expenditures and our revenues more in alignment and to actually provide us a buffer against the circumstances we face: with a slight decline in investment and a reduction in commonwealth activity in the territory”! Who out there now, having said, “Oh well—
Mr Barr: Having opposed all of them.
MR STANHOPE: Having opposed them all—now seeing a shift in the cycle; a softening—are they happy now that we have a strong balance sheet? Are you happy now that the government has provided some protection for this community against the buffers—
Mr Smyth: Ah, so we’re protected.
MR STANHOPE: We are. We are protected to a far greater extent than we have ever been protected before, with the strongest balance sheet; sustainable, solid surpluses across the cycle. We have never before had the luxury and the protections that we now have as a result of both the revenue and the expenditure decisions that we took two years ago.
The grants commission now confirm that we have reduced our above national average expenditure levels by 13 per cent over the last two years. That is a fantastic achievement. It was achieved through both those $400 million of embedded expenditure cuts and a restructuring of our revenue.
The grants commission reports—in this same report in terms of expenditure effort—that we as a taxing regime remain in the middle of the ruck. We are not—it was confirmed as recently as last week or so by the Commonwealth Grants Commission—a high taxing regime. We tax at the same level as other Australian jurisdictions. The Commonwealth Grants Commission, in its latest report, states that, on a pro rata or comparative basis, we tax less today than we taxed in 2001.
MR SPEAKER: Is there a supplementary question?
MR MULCAHY: Thank you, Mr Speaker. I thank the Treasurer for the response. Treasurer, do you have any indication of advice that the ACT economy is slowing down or that the booming property market is likely to grind to a halt any time soon, and that your revenue forecasts could be at risk?
MR STANHOPE: There is a softening in retail expenditure; there is a softening in some aspects of Canberra. And you would expect that, in the face of rising interest rates, in the face of an average increase on a standard loan of over $4,000 in mortgage repayments per month, with the level of discretionary expenditure available previously for household consumption, for sport and recreation and for meals having been reduced by $4,000 a month, there would be a significant softening.
I have not received formal advice but I have had discussions with Treasury about the implications of a significant reduction in commonwealth employment or programs,
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