Page 1904 - Week 05 - Thursday, 6 May 2010
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What disappoints, as it so often does, is the failure of the budget—indeed of the whole budget process—to articulate a long-term vision of where Canberra is headed and of how—
the decisions in the budget—
fit in with the plan.
Amen to that! In regard to fiscal policy, let us turn to an overall perspective on the ACT and its economic and fiscal situation. We are well aware that CommSec, one of Australia’s respected economic commentators, has rated the ACT’s economy as performing extremely well. We understand and accept the basis on which CommSec reaches this conclusion. We welcome it. The concern that I and others have is that, while the ACT economy is performing so well, the budget is looking very dismal with deficits as far as the eye can see. The only conclusion I can come to is that the fiscal management of the Labor government leaves a lot to be desired.
We know that the Labor government budgeted for deficits at the height of the economic boom. This was not responsible economic and fiscal policy. All that happened is that this Labor government continued to spend the revenue boom at a time when this super profit, to use a contemporary concept, should have been put aside. This raises the whole notion of developing sovereign funds, whereby surplus funds can be collected, invested and used judiciously in economic development. Norway is an excellent example of the constructive use of sovereign funds. The Treasurer can talk all day about how strong the ACT’s balance sheet is. It is not possible to get away from the fact that if more appropriate fiscal decisions had been made in recent years, the ACT would have been in an even more advantageous situation.
This leads me on to the extraordinary comments from the Chief Minister and former Treasurer when he said on Tuesday that the Labor government while he has been Chief Minister has had eight surplus budgets out of the nine budgets that have been presented. I do not know precisely what the Chief Minister was trying to say with this comment, as he seemed to be confusing concepts. Was he talking about the estimated outcome as presented when a budget is brought down? Was he talking about the actual outcome after the end of each financial year? Was he talking about AAS data or GFS data, or was he confusing both?
Notwithstanding these basic questions, the Chief Minister must be brought to account for this nonsense. According to the relevant budget papers, the Labor government budgeted for a deficit in 2003-04, 2005-06, 2006-07 and the financial year 2009-10. By my count, that is four deficits that were budgeted for out of nine budgets, meaning there were only five estimated surpluses.
On the other hand, if the Chief Minister is talking about actual outcomes for each year, the situation is a bit more complex, because of the changeover from the AAS regime to the GFS. On the basis of all the data that is available to me, using the AAS regime, the budget outcomes since 2001-02 were a surplus in each of the five years to 2006-07.
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