Page 3003 - Week 07 - Wednesday, 30 June 2010
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The savings in this year’s ACT Budget are primarily made up of an efficiency dividend commencing from 1 July 2011 and a reduction in the Treasurer’s Advance in 2010-11 and across the forward estimates. The 2009-10 Budget sought to achieve savings through wage restraint and an efficiency dividend. These are rather crude and blunt instruments imposed from a whole of government perspective. This may suggest the ACT government has difficulty in reprioritising its spending.
This is true. The report continues:
There is probably a limit as to how much reliance the ACT Government can place on such whole of government savings measures in the future, and it will have to look at reprioritising its spending by either cancelling or cutting specific programs to achieve future saving targets.
The Treasurer, of course, did not get up and mention that little paragraph, did she? It is a reasonable report and some members did use the ACIL Tasman report to assist in their questioning and in guiding the information that they sought from the government. But that paragraph, I think, sums up this government’s approach. What it basically says is they do not have a plan; they have taken a few crude measures; they have crossed their fingers; and they are hoping to deliver.
But at the end of the day—and I will repeat it:
There is probably a limit as to how much reliance the ACT Government can place on such whole of government savings measures in the future, and it will have to look at reprioritising its spending by either cancelling or cutting specific programs to achieve future saving targets.
And there you have it. I guess the Treasurer just forgot to read out that paragraph, because it truly does point out the fact that we are not out of the woods yet, simply because of the economic mismanagement, the nine years of reckless spending. The reckless spending continues, and at some time there will be a reckoning. The reckoning, according to ACIL Tasman—and indeed it is mentioned in the budget papers—will come where two factors might come back to haunt the government and the risk to the economic outlook.
The first is the continuing concern over the level of debt and the possibility of default in Greece as well as other European nations such as Portugal, Italy, Ireland and Spain. For those who do not know, there are about 330 billion Euros of short-term loans that the 1,200-odd European banks have borrowed from the Central European Bank that come due close of business on 30 June. That would be today. And there are tremors in the markets.
The second risk is rising concern over the existence of a speculative property bubble in China. That speculation seems to be coming to fruition and, if you check any of the on-line records, they will say that Chinese stocks have softened again today. The problem is as ACIL Tasman points out in the sections that the Treasurer forgot to read, did not understand or has not taken into calculation. By using the blunt instruments that the government has used and, as I have said before, by not having a proper plan
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