Page 692 - Week 02 - Wednesday, 22 February 2012
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The fact that the ACT has a very high proportion of high-quality and sustainable jobs is recognised in Ms Porter’s motion and indeed is backed up by the economic statistics. Our gross household disposable income per capita was 63.5 per cent higher than the national average and our full-time average weekly earnings were 15.3 per cent higher than the national average in the 2010-11 fiscal year.
The CommSec report that Mr Smyth referred to spoke of the strength of the ACT housing market and the performance of this market compared to the relatively weak performance nationally. We have seen in the territory the consumer price index through the 2010-11 fiscal year rise by only 2.7 per cent, the smallest growth rate in the country, and overall the CommSec report, the State of the states report that has been referred to earlier, ranked the ACT’s economic performance as the second best in the last eight reports. In December last year, Standard & Poor’s reaffirmed the ACT’s highest possible AAA credit rating and it said that “the ratings on the ACT reflect … a soundly performing economy”.
At the onset of the global financial crisis, no-one could predict the impact or the course of the crisis. The ACT government’s budget plan was developed in an environment of uncertainty, with the objective of returning the budget to surplus over a measured time frame. Our plan aimed to support growth whilst driving administrative efficiencies through annual savings targets, and we have implemented this plan and other plans to support macroeconomic and microeconomic goals within the territory.
We are releasing pent-up demand in the housing market, we are relieving some inflationary pressure and improving housing affordability and we have supported productive capital investment when the private sector was withdrawing due to the GFC. We have maintained economic activity and employment in the short term and improved the economy’s productive capacity for the future, all key elements of responsible economic management.
As a result of the early success of this strategy, we did advance our target to return to surplus by two years but have done so on the basis that we will maintain the high-quality services that the Canberra community expects. We have planned for expenditure growth to reflect a growing population, particularly in the area of health.
As we have heard many times, the public sector accounts for a significant proportion of the ACT’s total employment. There are two ways to look at this. Some look at it negatively. My view is that it provides the territory with a very stable labour force and a strongly performing economy but it does not remove the need for growth in private sector employment, nor does it remove the need for economic confidence.
Just as confidence plays a major role in a family’s decision to save or spend, it does so in a business’s decision to invest and to hire. A lack of confidence will result in increased saving, less expenditure; in a business context, a reduction in hiring and the deferral of new investment; and in the context of financial institutions, as we have undoubtedly seen around the world, great wariness when it comes to lending. Without lending, without investment, without expenditure, our economy grinds to a halt. So
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