Page 2143 - Week 07 - Thursday, 16 May 2013
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The government has outlined a strong vision for Canberra’s growth and economic development in our second century. This includes capital metro and the city to the lake projects, the implementation of the Gonski education reforms and the NDIS, as well as new health infrastructure such as a new hospital on the north side. Each one of these is an important project in its own right, helping to create the foundations of growth for decades to come. The challenge, of course, is to ensure that the budget is in a position to fund them. As such, it was pleasing to note, within the budget review, the confirmation of the government’s budget plan.
The budget review also confirmed that the fundamentals of the territory economy remained strong. We have low unemployment, well below the national average. Our economic growth remains robust. Population and income growth continue strongly. The territory maintains one of the strongest balance sheets in the country, and this is evidenced by key indicators such as net debt and net financial liabilities.
But the budget review confirmed what was reconfirmed in the federal budget—that is, there is a softening in revenue. As I indicated yesterday, it is clear that the prospect of a change of government at the federal level is certainly weighing heavily on the minds of potential homebuyers and investors in Canberra at the moment. The latest data shows that the number of sales and the value of sales in our property market are declining, and that is having an impact on revenues. It is noteworthy that, since handing down the 2012-13 budget, conveyancing revenue is estimated to have fallen short of the estimated amount by about $55 million.
It is important that the transition away from this highly volatile tax continues. As such, there will be a commensurate impact in the budget next month. The volatility of conveyance revenue is further evidence, if it was needed, that stamp duty is a bad tax, and hence the government’s moves to abolish it. It would appear that Mr Smyth is the only would-be treasurer, shadow treasurer, treasury spokesperson in the country who still thinks stamp duty is worth retaining. In fact, he supports increasing it.
As I indicated at the time of the issuing of the budget review, in order to maintain the budget path of balance and then surplus through the development of next month’s budget, the government will be reviewing our borrowing strategy, our capital works program, our service delivery and our revenue lines, and this will involve decisions that will ensure the budget position is sustainable in the long term. In particular, we will be ensuring that expenditure is restrained. We will be seeking to drive savings and efficiencies in the use of consultants, advertising, travel and printing. We will be delaying some projects. We are continuing to review our capital program, and we will seek to drive further efficiency in the delivery of ACT public services.
However, this will be done in keeping with our strong fiscal objectives, which are a measured response to changing economic and fiscal circumstances which provide flexibility for adjustments in the future should circumstances change, which ensure that we do not harm our economy and community by undertaking knee-jerk responses, which ensure that we respond to growth in the need for services, particularly in health and education, and which allow us to properly engage with the community about service delivery priorities and where additional revenue may be raised or where savings should be made. The budget review confirms that the territory economy is strong and that our budget plan remains on track.
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