Page 1898 - Week 07 - Tuesday, 2 June 2015
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Gross State Product is forecast to increase from an estimated 1¼ per cent in 2014-15, to 1½ per cent in 2015-16, before returning to long-term trend growth of around 2½ per cent from 2016-17 onwards.
Hopefully, the worst is now behind us.
But the time for economic vigilance has not ended. Other jurisdictions have shown us what happens when Governments take their eye off the ball early in economic recoveries.
My Government will continue to work hard at nurturing the economy as the recovery takes hold.
Fiscal outlook
Once again, the Territory budget supports the Territory economy.
The Commonwealth was not content to drag at our economy with jobs cuts—they also cut away at our revenue directly last year, with cuts of hundreds of millions of dollars in health funding.
This year, there is a substantial cut to the amount we receive from the Goods and Services Tax from the Commonwealth.
In the coming four years the Territory will lose almost $559 million in GST funding. Such a large reduction has a significant impact on our budget.
The Asbestos Eradication Scheme, which I announced in the 2014-15 Budget Review, also impacts our finances.
The $1 billion cost of the scheme covers the purchase, demolition, remediation and disposal of contaminated homes, as well as emergency financial assistance, asbestos assessments and a hazard reduction program.
This is a necessary program for all Canberrans. It removes the spectre of loose-fill asbestos for residents, home buyers, tradespeople, carers and neighbours.
The Territory Government will incur the full net cost of the Scheme, estimated to be about $370 million. On top of that, the Territory bears the interest costs on the $1 billion loan provided to the ACT by the Commonwealth over a 10-year period.
It is disappointing the Commonwealth turned their back on the agreement they had made with Canberra and failed to contribute to meeting the costs of the Scheme.
The Commonwealth has also walked away from health funding—this year they are again failing to honour the National Health Reform Agreement.
As we did last year—the Territory Government is stepping up to fill the gap left by the Commonwealth.
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