Page 879 - Week 03 - Wednesday, 27 February 2013
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It is an unfortunate reflection that the shadow treasurer either wilfully ignores that reality or chooses not to understand how our superannuation liabilities work. But it is one of the more basic concepts that can shift around our budget figures. As I indicated in response to questions in question time, from time to time that shift will be positive if the prevailing bond rate at 30 June is above the long-term average that is used to calculate this long-term liability.
The budget review and the information I provided in my media release and press conference give a very clear direction of the government’s intentions over this parliamentary term and the process we will adopt in the development of the coming budget. The budget review shows the territory economy continues to perform well. The review shows that, despite some challenging economic conditions, the territory has robust economic growth, low unemployment, strong population growth and also very strong income growth. Our housing market, whilst moderating from record highs, still remains strong.
The review showed that the budget is on track to return to balance and then surplus, and in the wake of the global financial crisis, the government has formulated a budget plan that seeks to return to balance and surplus in a measured and responsible way. We estimated a $362.9 million net operating balance for the 2012-13 fiscal year, with an expected improvement of over $200 million or $230-odd million, to around $138 million deficit in 2013-14, a deficit of around $100 million in 2014-15 and a surplus of around $30 million in the 2015-16 fiscal year.
This is a return to balance and surplus in a measured and responsible way, and it contrasts with approaches of other governments that have decided to trash their local economies and significantly increase unemployment in their jurisdictions in a mad rush to surplus for the sake of it. Whether a government’s budget is in surplus or deficit is not the measure of economic management; there are a number of other measures of strong economic management, such as the health of your economy overall, the state of your infrastructure and your capacity to deliver essential services to the community, that are equally important. So to slash and burn a budget just to return to surplus a year earlier is economic folly and needlessly harms a community and the important services that residents expect from their government.
The budget update shows the territory’s economy and fiscal position are subject to uncertainty, particularly in relation to future levels of commonwealth spending and employment in our economy and to the pressure of the land release program and conveyance duties. Responsible governments, of course, regularly review their revenue and expenditure. Prudent budgeting to ensure our fiscal position remains sustainable is the core focus of the government as we move into this budget round.
In 2012-13 we outlined a range of significant reforms to make the territory’s revenue base more sustainable and, importantly, less volatile for the long term. We also made a series of responsible savings with new spending measures offset against those savings. For the benefit of the shadow treasurer, those savings included: a $4.6 million reduction in travel and accommodation expenditure; a $7.2 million
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