Page 5880 - Week 14 - Wednesday, 7 December 2011
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broader portfolios, most particularly the National Capital Authority. We have made representations that in the context of achieving efficiency dividends within those larger departments and agencies the NCA should be spared, particularly as it has picked up an additional capital works responsibility in relation to Scrivener Dam.
However, it is important to note—I do not know that there is a contest on this issue, although I would be interested to hear from those opposite—the importance of the commonwealth government returning to surplus, as is the case for the territory government over time. We can have arguments, and there should be robust debates, about when that return to surplus should be, but it would appear that there is a consensus in Australian politics—perhaps excluding the Greens, although I will let them make their own statements—in relation to a return to surplus. The question would appear to be over timing and also over what methods government should use to achieve that.
I do note, in the context of the MYEFO and the update that the commonwealth provided last week, that the commonwealth identified that savings would be focused on reduction in the use of consultants and contractors, reduced travel requirements through better use of information and communication technology, and reductions in other non-salary administrative expenses. There is no doubt that reductions in the use of consultants and contractors will have an impact on the private economy within the ACT. I know the Canberra Business Council have observed that they think up to 100 positions could be at risk if the commonwealth government significantly reduces its use of consultants and contractors.
In the context of ACT government decision making around the 2012-13 financial year, given this news and particularly that it is a one-off impact in relation to a reduction in the commonwealth spend in the territory in 2012-13, it certainly would be appropriate for the ACT government to look at what actions we can take in relation to our capital program and in relation to our expenditure in the 2012-13 year and in particular to look at what we can do to offset the impact of the reduction in commonwealth expenditure, although I do note an important announcement today in relation to a $26 million injection into the territory through the University of Canberra and the structural adjustment fund coming from the federal government. I think that is an important and welcome boost; a particularly important investment in education and training and a particularly important investment in the long term for the territory economy.
When it comes to the other elements of the commonwealth’s program I think we all recognise the importance of sound fiscal policy to put downward pressure on interest rates. The capacity that the RBA clearly has now to respond, through two consecutive 25 basis point reductions in interest rates, is a reflection of the RBA’s views on the state of the international economy but also the capacity that the federal government has given it by running an appropriate fiscal policy to return to surplus, to attack some of those areas of middle-class welfare that have certainly crept into the commonwealth budget over time.
I do note that another element of the commonwealth’s approach through the midyear update was to wind back some of those quite generous payments and to look at means
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