Page 2220 - Week 08 - Tuesday, 4 June 2013
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The Budget begins the delivery of our election commitments and items in the Parliamentary Agreement.
It continues the Gallagher Government’s record spending on schools, hospitals and community services, ensuring we support the most vulnerable in our community.
Economic outlook in the ACT and Australia
Let me turn to the economic outlook facing the Territory.
The recovery in advanced economies continues to be slow and uncertain.
Growth in Australia is uneven and hampered by fragile consumer confidence, a weakening labour market and fiscal restraint.
The ACT economy and the Government’s fiscal position are not immune to this.
We currently have low unemployment and inflation, strong population growth and high, albeit slowing, investment.
But we face the Commonwealth’s post-stimulus package contraction and potential severe job cuts if there is a change of government federally.
Gross State Product growth is forecast to moderate in 2013-14 to 1¾ per cent, reflecting, among other things, the impact of Commonwealth contraction.
State final demand growth is forecast to moderate to ¼ per cent in the coming year due to lower Commonwealth expenditure and below-trend growth in household consumption and investment.
Wage growth is expected to be constrained, and consumer price inflation is expected to be well contained at 2¼ per cent due to below-average final demand growth, the high Australian dollar and continuing retail discounting.
The ACT labour market has softened, and leading indicators point to subdued labour demand, with labour market activity forecast to ease in 2013-14.
In the long term, the ACT Budget faces issues of sustainability.
Our ageing population and rising demand for services are increasing the demand on government outlays.
On the revenue side the level and growth of GST revenue continues to erode.
In the short term, the outlook for tax revenue remains soft because of challenging economic conditions.
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