Page 115 - Week 01 - Tuesday, 9 December 2008
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Property Council have been saying for years: you cannot rely on the single source of revenue, that is property revenue, and its significance to this economy for ever and a day, because when it stops it does stop—and it is stopping and it has stopped, and that is unfortunate.
The minister went on to say, “Our budget was built to be able to absorb unknown financial shocks.” Unknown financial shocks? Where have they been? Every day in the lead-up to the election on the front page was the global financial crisis; it pushed most of the Assembly election coverage off to pages 4, 5, 6 and 7. Unknown? Yet they promised increased spending; they reduced surpluses. The minister went on to say, “We will be affected by growing demand for government surpluses.” If there is growing demand, let us hope in the outyears that it is not more than $10 million, $11 million or $13 million, because that is the paper-thin surplus that we have.
Remember that this is the government that is ready, that is able, to absorb unknown financial shocks. Well, what about the known financial shocks? What about the things that we know are coming? You heard the minister mention them earlier today. Every per cent reduction in interest rates is a loss of payment on interest on our money in holding and on revenue received. The GST revenue is going down. The minister therefore went on to say, “However, the magnitude of the shock that we are witnessing, and that is still unfolding, is likely to be larger than the present capacity.” How is this? We have a statement that says that our budget was built to be able to absorb unknown financial shocks but that the magnitude of the shock that we are witnessing and is still unfolding is likely to be larger than the present capacity. I do not know what the Treasurer is talking about. She says in one line “we can” and in the next line she says it is bigger than what we have got. So perhaps the Treasurer would like to come back and explain what it is that is going on here.
She went on to say: “The reality is that they will have a negative effect on our budget. A decline in economic activity, particularly in the housing market, will affect our conveyancing revenue”—the revenue that this government has lived off. She said, “A decline in the financial markets would impact on our investment returns.” That is also true. She said, “We will also be impacted by reduced GST payments”—that is true, because we have not diversified our economic base—and “further reductions in interest rates will impact on the earnings on our cash balances”.
The minister went on to say, “As an immediate step, the Chief Minister convened a roundtable on 25 November with representatives of the business, development, industry, tourism and education sectors to start a dialogue on working together to address the local effects of the global financial crisis.” What a damning indictment from the Treasurer of the performance of the Chief Minister that they finally started a dialogue. After seven years in office, they finally start a dialogue to work together to address what is going on around the world. It took until after the election, until after the money had dried up, until after he had slid the poisoned chalice of Treasury across the table to the Deputy Chief Minister, for the Chief Minister to start a dialogue with business. What a damning indictment of a man who purports to lead this territory.
The Treasurer went on: “The meeting was productive on the types of infrastructure projects that could be undertaken in the ACT to drive investment and spending. We
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