Page 63 - Week 01 - Tuesday, 10 February 2015
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Once these elements are factored in, the headline net operating balance estimate for 2014-15 declines to a deficit of $770.5 million. Despite the magnitude of this adjustment, the 2014-15 budget review forecasts that the budget will return to broad balance in the 2016-17 fiscal year, again consistent with the estimates contained at budget time in the 2014-15 budget.
The economic outlook for the territory remains challenging. As I alluded to earlier, the commonwealth has reduced the size of the Australian public service by approximately 8,000 positions through the year to 30 June 2014, of which around 3,300 were here in Canberra. Additionally, the commonwealth has accelerated its rate of staffing reductions. The ACT budget anticipated that 16½ thousand positions would be lost over the four years from 2013-14. However, almost half of these positions have been shed in the first financial year.
Accordingly, the ACT labour market has weakened more than anticipated over the past six months. Further to this, the commonwealth has foreshadowed its intention to relocate Australian public service departments, and hence jobs, from Canberra to other areas. Let us be clear: these are unnecessary relocations that are likely to further dampen the labour market over the next 12 months, brought to you by your friendly Liberal government. The flow-on effects to economic activity and confidence are significant. Gross state product has now been revised down from 1¾ per cent to 1½ per cent in the 2014-15 fiscal year.
Notwithstanding the negative impact of the commonwealth Liberal government’s cuts on our city, the short to medium-term outlook for the territory economy remains broadly consistent with what we anticipated and announced in the 2014-15 budget. Investment in Canberra remains the focus of the territory government’s activities, with strong investment in health, strong investment in education, strong investment in community services and a significant program of infrastructure to support our economy, to support it from the actions of the federal Liberal government—actions which have, unfortunately, given rise to significant job losses and a decline in business confidence in the territory.
As part of the 2014-15 budget review, we have again undertaken an assessment of the territory’s capital works program in light of the first six months of project activity. This process also included bringing forward planned outyear expenditure to accelerate some existing projects and, in some instances, returning savings to the budget. A total of $80.7 million has been re-profiled from the 2014-15 fiscal year as a result of this review, and program savings of $8.5 million are being returned to the budget in 2014-15.
In light of the challenges before us, I need to state again clearly that the government’s fiscal strategy remains unchanged from that which we outlined in the 2014-15 budget. Our clear focus remains on the management of the territory’s public finances in a rigorous and prudent manner, meeting the objective of achieving an operating balance over time.
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