Page 1584 - Week 04 - Thursday, 7 April 2011
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have gladly learned that lesson from her. Unfortunately, the ACT Labor government just do not seem to understand the concept of fiscal discipline. When it comes to ACT taxpayers’ money, they simply do not understand. They seem to believe that there is a pot of gold that will go on to fund their most extravagant policies without any impact on residents’ pockets.
This is a government who, when they are at the supermarket, choose to use credit to buy the sirloin steak and the bottles of champagne without a thought as to how the bread and milk will be paid for. To the government, spending more money means success. That is how they measure success. They believe that the more they spend, the better government that they are. They believe that, as expenditure goes up, so does their credibility. But, unfortunately, while this may work at election time, it does not work over the longer term.
The ACT has now been put in the unfortunate situation where we have no contingency; we have no plan B. We have spent too much at the supermarket on steak and champagne and when the unexpected bill comes in for roof repairs for our home we will have no way of paying for it. We only have to look at the Queensland floods and the imposition of the flood levy to see what happens when budgets are not managed to ensure there is a contingency for downtime or disasters. The bill for roof repairs may not be too far off for the ACT. Just today the AMP capital markets chief economist, Shane Oliver, had this to say:
After relative calm in financial markets from September to February, it seems the worry list for investors has blown out to include: Japan, oil prices, inflation, China, US housing, the US Federal Reserve’s exit from easy monetary policy, European debt problems and high US public debt.
The effects of the global financial crisis are not over and the effects and the pressure on our economy are not over. We cannot be complacent and think that this will not affect us because it will. You only need to look to Portugal, Greece and the UK to see the effects that the GFC has had on those local economies—the effects on economies where spending has exceeded savings year after year, when there was no fiscal discipline. The effect has been drastic budget cuts and riots on the streets.
Federally, the impact can already be seen. In the 2010-11 budget the federal Labor government went into almost $80 billion of net debt, or about $3,500 per Australian, to fund their extravagant promises. They used this debt money to fund school halls, pink batts and the big cash splash. They wasted Australian taxpayers’ money on $12 billion worth of grants on environmental projects across the states and territories which the Grattan Institute has found, in a report released today, have done almost nothing to reduce greenhouse gas emissions. So that is $12 billion, Madam Assistant Speaker, spent by the federal and state governments on climate change initiatives that have been utterly futile.
Not only did the federal Labor government budget to spend so extravagantly but also they have mismanaged the budget since then. As was revealed in the Australian this morning, the cost of capital works for the mammoth NBN project looks to surge more than 50 per cent above forecasts. This is potentially $20 billion, on top of the already
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