Page 897 - Week 03 - Tuesday, 24 February 2009
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MS GALLAGHER: It was a four-year effect, mate; it was a four-year effect: the nurse was going, as was a whole range of other services in government. Two hundred public servants in Canberra would have lost their jobs under you. That is the economic response that you would have had: slash the budget, sack public servants and slash revenue. Well, hasn’t that turned out to be the absolute worst plan ever suggested? Nobody agrees with it—and thank God you were not given the opportunity to deliver it.
MS HUNTER (Ginninderra—Parliamentary Convenor, ACT Greens) (4.26): The ACT Greens, like everyone in this place and the territory, are concerned about the state of the ACT budget. In the ACT Treasurer’s statement released on 23 December 2008, she forecast a surplus of $15.2 million for this financial year, down from the $73.8 million surplus estimated in the pre-election budget update in September 2008. That was a very significant drop of $58.6 million in just three months between estimates. In addition, in the same release she predicted deficits in the order of $100 million through the forward years to 2011-12.
The state of the ACT economy, and the Australian and world economies, has rightly occupied quite a deal of our time in the new Assembly. We have all in the main acknowledged that the events leading to the deterioration of financial markets were unprecedented and largely unforeseen. Almost all major advanced economies have been driven into recession by the global financial crisis and no economy is likely to escape its impact.
Not many people were able to predict the continuing downturn in the economy. On 30 June last year, an article by Peter Martin, then economics editor for the Canberra Times, indicated that, according to a survey of leading forecasters conducted at the time, the ACT would survive its present downturn and return to economic strength in the year ahead. Three of these forecasters said that interest rates would rise. Four expected them to remain steady. One only expected lower interest rates, but he did not expect all the cut to be passed on by mortgage lenders. Most expected the Australian dollar to fall from its then high of US96c; only Westpac expected it to climb further, reaching US99c by mid-2009. So we understand and can see how hard it was to predict the continuing downturn, with even the experts in this field not knowing how significant the impact would be.
What we now need to do is manage what we have and put measures in place to work through the problem. Compared to other states and the Northern Territory, the ACT has a relatively small financial base; therefore, the impact of interest rate cuts, a downturn in household spending and the decrease in GST revenue on the ACT budget are significant.
In this economic climate it is essential therefore that the ACT government manages existing assets and revenue in a responsible manner and ensures that close attention is given to preserving existing financial resources, stimulating the economy and ensuring that jobs are protected as a high priority.
The ACT Treasurer indicated in her December statement that our net worth is strong, and across the forward years strong cash surpluses are forecast. We are aware that the
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