Page 4743 - Week 13 - Tuesday, 10 November 2009
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The commonwealth government’s stimulus measures were effective and well targeted, and this is evident in their Mid-year economic and fiscal outlook released last week. Similarly, the Stanhope government’s response was quick and effectively targeted to support those most at need and to where emerging capacity was becoming evident in our local construction industry. The general government sector’s operating result also benefited from the stimulus measures, with $12 million in extra commonwealth revenue coming in for building the education revolution and transport related measures.
Our demonstrated capacity to manage the territory’s finances has been reflected with the affirmation of our AAA credit rating by Standard and Poor’s in early October this year. The rating reflects the strength of our balance sheet, as demonstrated by our key financial indicators such as net debt and net worth, and the achievement of consistent operating cash surpluses.
While economic growth in the ACT slowed during 2008-09, and it remains well below the highs we have experienced over the past two financial years, we are, however, beginning to see signs of improvement. Household consumption expenditure has shown resilience and our unemployment rate remains well below the national average.
As highlighted in the recently released commonwealth Mid-year economic and fiscal outlook, global recovery has been stronger than anticipated, but despite improvements in the outlook the global recession has still had a marked effect on the Australian economy and the challenges remain.
More positive outlooks for the national and local economies will have some impact on our budget plan moving forward. As I have said in this place before, the plan was always developed to provide sufficient flexibility to respond to those changing conditions. Even with the improved outlook, the government has a substantial task ahead.
As advised in the 2009-10 budget update, the territory’s GST revenues were forecast to drop by about $420 million over four years. While the commonwealth’s MYEFO shows some clawback of those revenues, only around $109 million, this is a long way short of recovering what we have already lost. And we should be mindful that the commonwealth’s own budget adjustment task represents a risk for the territory’s economy and budget moving forward. I can advise members that the next update of the territory’s financial position will be released with the midyear review, including any adjustments to our budget plan, a review of our revenue forecasts and the impacts of the commonwealth’s MYEFO.
The financial report I present today has been prepared in accordance with Australian accounting standards and is in line with the requirements of the Financial Management Act 1996. In line with the new harmonised standards, the consolidated report has been greatly enhanced this year. The report now contains more information, including notes to the general government sector financials, detailed variance analysis and a breakdown of expenses, and assets by function. These increases in detail further
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