Page 1406 - Week 04 - Wednesday, 24 March 2010
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The context of this motion is the continuing fallout from the global economic and financial crisis, which of course some now call the North Atlantic crisis or the North American and European crisis. And there is continuing concern that, while there have been some positive signs, especially in Australia—and no doubt due to the good stewardship of the former Liberal Howard government that left us with no debt, large surpluses and a fantastic financial regulatory framework—the general prognosis around the world is still not overwhelmingly positive. And, of course, that has impacts on Australia and, if it impacts Australia and particularly the federal government, it will impact the ACT.
There are concerns with large sovereign debts in other countries, and—not in a derogatory sense—there is the group known as the PIIGS, Portugal, Ireland, Italy, Greece and Spain, which have enormous sovereign debt. And then there are problems even in the UK and Japan, and there is the potential for some global financial problems to re-emerge.
Then there is the concern about the quantum of debt in the United States—trillions of dollars; numbers that are almost beyond our comprehension—and there is increasing pressure on the Obama government to deal with this debt issue. One only has to look at the recent warning from the International Monetary Fund, a very severe warning, on debt:
Advanced economies face acute challenges in tackling high public debt and unwinding existing stimulus measures will not come close to bringing deficits back to prudent levels,” the first Deputy Money Manager of International Monetary Fund, John Lipske, says.
He goes on to say that the crisis had left deep scars in the fiscal balances of the world’s advanced economies, which should begin to rein in spending next year as the recovery continues.
In our region, there are also concerns about the way in which the Chinese economy will turn. Will it continue to grow at eight or nine per cent with such factors as demand for consumer goods from the burgeoning middle class and demand for more energy supplies, more infrastructure, more steel production and other manufactured goods? Or will the government put a clamp on the availability of credit and choke off the rate at which the economy has been growing? In such an uncertain environment, we in the ACT need to ensure that we are positioned as well as we can be to deal with further issues that arise.
That brings me to the motion proper—the issue of management of the ACT over the past nine years—where we have seen the Stanhope-Gallagher government’s history of budgeting for deficits. Yes, that is right: at the top of the economic cycle, when we should have had surpluses. Between 2001-02, the first year of the Stanhope-Gallagher government, and 2009-10, that is nine budgets, the Labor government budgeted for seven deficits. Note that this data is in terms of the GFS, the government finance statistics, the now accepted format for government financial reporting.
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