Page 2037 - Week 07 - Wednesday, 28 June 2023
Budget 2023-2024—fiscal strategy
MS ORR: My question is to the Chief Minister. Chief Minister, the budget you delivered yesterday showed a $400 million improvement. Can you please update the Assembly on the fiscal position and medium-term strategy taken by the government?
MR BARR: I thank Ms Orr for the question. The $400 million improvement in the territory’s fiscal position in this budget builds on the $800 million improvement in the last budget. The government is now projecting our headline net operating balance to reach surplus in the fiscal year 2025-26 to the tune of around $140 million, and then that surplus to increase to around $212 million in the fiscal year 2026-27. Importantly, the territory’s operating cash surplus is forecast to reach $712 million in 2026-27. We are particularly focused as we make important investments in services now and we invest in the infrastructure that our growing city will need, but also in undertaking fiscal repair. This budget, building on the last budget, sees a $1.2 billion cumulative improvement in the forward estimates period for the territory.
MS ORR: Chief Minister, how does this $400 million improvement build on previous fiscal repair after the impacts of COVID-19?
MR BARR: As I mentioned, there was the $800 million improvement last year and the $400 million improvement this year, and there were earlier improvements from the peak of the COVID impact. What is driving this improvement is economic growth and a more accurate count of the territory’s population. What the Australian Bureau of Statistics found when they did the census in 2021 is that they had been chronically undercounting Canberra’s population. They got it wrong by five per cent. The effect of that is that, for several years previously, the ACT was being dudded hundreds of millions of dollars of GST revenue. We are working closely with the ABS to address the methodology of their assessment of the estimated residential population.
To the great credit of the ABS, they are very good at knowing who was born and who died in any given year. They are also very good at knowing who has come into the country. They are less good at understanding, once people are in Australia, which state or territory they live in, so that is the area that we are focusing on. That is important because, largely, the reason they were undercounting our population was that they were assuming that more people were leaving the territory than were coming in—perhaps an assumption that the Canberra Liberals made last time in a bit of a political mistake, clearly. What has actually been happening is that our population has been growing rapidly—the fastest of any state or territory. That feeds into our GST revenue and it feeds into our revenues from the commonwealth for health, education and skills. The larger the population, clearly, the more revenue the territory receives. (Time expired.)
DR PATERSON: Chief Minister, what is the fiscal strategy to reduce debt as a share of gross state product beyond the forward estimates?
MR BARR: In the short term, we will use those large operating cash surpluses as the means to fund a lot of our infrastructure—our health, school and transport infrastructure projects. Looking forward beyond the next four years and into the