Page 2504 - Week 08 - Tuesday, 9 August 2016
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Last year, Mr Barr told the estimates committee:
The government retains the capacity to be flexible on the exact finish date for stamp duty phasing out.
He will be very flexible indeed, I would suggest, Madam Deputy Speaker. Mr Barr has turned his back on his tax reform package. He has started to walk away from all the talking about abolishing stamp duty. It is no wonder that many Canberrans have lost faith in the so-called tax reform process.
The tax reform process was supposed to reduce the government’s reliance on revenue from land sales. Yet government critics such as Tony Powell, former head of the NCDC, have said that the government is trying to “justify rezoning for medium to high density residential development and sale of land in the foreshore area in order to meet its budget imperatives”. The former Treasury official Dr Khalid Ahmed has claimed that the budget is unsustainable in terms of its “reliance on land development and land revenues”. So far it is fair to say that the so-called tax reform process has not reduced the government’s reliance on land sale revenue.
Madam Deputy Speaker, you would think that for the revenue forecast to increase so strongly in coming years, the ACT budget would be in good shape. However, the budget deficit is projected to be $182 million in 2016-17. The budget is forecast to return to surplus in 2018-19. That is if you believe in the tooth fairy.
The report by Pegasus Economics prepared for the estimates committee casts doubt on these forecasts. The Pegasus Economics report on the budget states that every year since 2010-11 the budget is forecast to return to a small surplus in the last or second last year of the forward estimates. Pegasus goes on to say:
• After 2011-12 up to the current Budget, the expected deficit has worsened at each successive Budget.
In each year between 2010-11 and 2016-17 the climb back to surplus has become longer and steeper.
This is the legacy of the Barr government. Khalid Ahmed has also cast doubt on the budget forecasts, saying:
There’s a question mark around the credibility of the forward estimates, I would put it quite bluntly … It’s difficult to see how the operating result can improve so dramatically over the coming years …
Mr Barr has warned of supposedly blowing the surplus. That is easy for Mr Barr to say. For him and his Labor-Greens coalition government, the surplus is on the never-never.
The greatest risk to a budget surplus for the ACT is another four years of a Barr-Rattenbury Labor-Greens coalition government. Irrespective of what happens federally, Mr Barr has put financial management and the financial future of the
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