Page 5817 - Week 14 - Wednesday, 7 December 2011
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MR SPEAKER: Thank you, members. Let us continue, Mr Barr.
MR BARR: This remains the case now, and the Reserve Bank certainly alluded to this when they cut interest rates yesterday. Yet, with all the overseas economic turmoil and political angst, the ACT economy continues to perform well and the ACT government continues to manage a sound fiscal policy.
Retail trade figures suggest a recent shift and a sign of recovery within the territory economy. The Reserve Bank’s move on interest rates will provide further reinforcement of this and will have a stimulatory effect on consumer spending. It will allow households to think about shifting some focus from saving and paying down debt moving over into the expenditure side. It certainly will make life easier for the many tens of thousands of Canberra households that have a mortgage, and it will have a positive impact for ACT retailers—and, potentially, some additional expenditure will in fact boost the GST pool.
MR HARGREAVES: A supplementary, Mr Speaker.
MR SPEAKER: Yes, Mr Hargreaves.
MR HARGREAVES: I ask the Treasurer: what other policy approaches are open to the government?
MR BARR: With Standard & Poor’s endorsing the government’s fiscal strategy as responsible and succeeding, it is difficult to see why you would adopt an alternative approach. But for the information of members, there are indeed a range of alternative approaches.
We could make reckless promises on expenditure and then give no indication at all about how we might pay for them. We could throw out all sense of fiscal responsibility. We could commit to removing taxes and raising expenditure and somehow hope it all might just work. We could put our faith and trust in the Brendan Smyth magic money tree, Mr Speaker.
But responsible budgets are not like that. Budgets are about choices and values. They have economic effects and they have social effects. Strong fiscal policy sends a signal to business. It generates investment and employment. Responsible budgets provide citizens with the capacity to invest in health, education, community services and infrastructure. These investments provide assistance to the most vulnerable in our community. They build human and social capital.
With all of these effects, it is critical to get fiscal policy right. I am delighted with the endorsement of Standard & Poor’s. I think it reflects very positively on the contribution of the Chief Minister in her time as Treasurer. This Standard & Poor’s report is a reflection upon the Treasurer’s last three budgets and the budget plan that was put in place by the Chief Minister when she was Treasurer. We look forward to the continuation of our strong fiscal policy settings.
MR SMYTH: A supplementary, Mr Speaker.
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