Page 2302 - Week 07 - Tuesday, 16 June 2009
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It is fair to say there is a reasonable degree of scepticism reflected in the report about this government’s budgetary management. A summary of what we heard was that the plan for seven years of deficits consists of increasing spending this year and making no real savings this year. After that, this government is hoping that a combination of increasing revenue in the outyears, for which the government could provide no substantiation, and efficiency, which could not be defined, identified or explained, will eventually see revenue match expenditure.
The committee “discussed at length the lack of detail in the budget papers that made it impossible to clearly identify a plan to achieve the recovery predicted by the ACT government”. For example, the committee noted that “despite reductions in revenue in some areas, overall revenue is projected to grow strongly in the outyears”. The committee also noted that there was “no substantiation for those predictions, and are contradicted by other submissions received by the committee”.
What do we make of such findings? When it came to what savings may be found, the committee report said that Katy Gallagher, health minister, “provided no further detail on the cost-cutting measures that would be required”. The committee found that “no other plans were provided by the Treasurer or had been developed to show how, when or where necessary cuts would be made”.
Throughout this document, across portfolios, across ministers, across the government, the committee has found this budget does not outline a plan for recovery. The report notes:
No other plans were presented in the budget to demonstrate a plan to return the budget to surplus.
Further on:
The committee noted that some of the projections for revenue predict revenue growth with no substantiation for those predictions, and are contradicted by other submissions received by the Committee … The Committee also noted there was limited detail presented relating to the efficiency dividends expected by the ACT government. The Committee is concerned at the lack of a clear plan for returning the budget to surplus.
It is not just the committee that reached these conclusions but key industry groups as well. The Canberra Business Council was concerned that the 2009-10 budget “does not clearly outline how the ACT government expects to eliminate the deficit by 2015-16”. It states the territory may be headed for “a perfect storm” and refers to the “ridiculous paperwork that its members say makes the ACT the most difficult jurisdiction in the country”. In regard to the Property Council, the report states:
The Property Council believes the ACT government’s dependence on a narrow revenue base—through Commonwealth Government GST and ACT property taxes—is unsustainable, a major concern and the budget failed to address this problem. It also believes this reliance will result in fewer publicly funded services, a loss of investment in the sector and a reduction in the capacity to pay taxes.
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