Page 1150 - Week 07 - Tuesday, 22 August 1989
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understand the issues. Let me make a couple of points. I think her assertions are wrong, Mr Speaker, both in terms of the assumptions underlying the Commonwealth budget and ours and in terms of the content of those two budgets.
Let us look at the assumptions. The assumptions behind the Federal budget are, first of all, a consumer price index growth in this fiscal year of 7.5 per cent, wages growth of 7 per cent and an employment growth of 2.75 per cent. The Chief Minister's initial budget statement says that the assumptions behind her budget are a 6.9 per cent growth in CPI, 6.5 per cent growth in wages, and 2 per cent growth in employment. They are very significant differences. Either the Chief Minister or the Federal Treasurer is wrong.
I am not going to argue which one of them is right, but the fact is that, if the Federal Treasurer happens to be right, the Chief Minister's assumptions have to be seriously questioned. There must surely be required changes to the ACT budget if you assume that her assumptions were wrong and that those of the Federal Treasurer were right. You cannot proceed with a budget in its present form based on a 6.9 per cent growth in the CPI if it is going to be 7.5 per cent; nor can you proceed with an assumed 6.5 per cent increase in wages if that wages increase is going to be 7 per cent; nor can you proceed on the basis of a 2 per cent growth in employment if it is going to be 2.75 per cent. You might as well not budget at all if you are going to proceed with your assumptions being that far out.
Let us look at her example of an assumption of a 6.5 per cent wages growth. This assumption was first made, Mr Speaker, in the forward estimates produced on 9 June this year. But, since then, the forward estimate for wages and salaries has been revised downwards by $13.4m - I quote from a government paper - "due to lower national wage case provision in reviewal of revised estimates from the Industrial Relations Branch".
In other words, this statement indicates, Mr Speaker, that the original 6.5 per cent wage growth assumption has been revised downwards to an unstated, lesser percentage. Meanwhile, as I say, the Federal Treasurer has used a budget assumption of 7 per cent for wage growth - clearly, a greatly different figure.
The validity of the figure used by the Chief Minister in her initial budget statement must be questioned, and the gross effect on the total local budget, of a billion dollars plus, must surely have to be taken into account. The other two basic assumptions about CPI and employment changes must be questioned also. They raise serious doubts, in my view, about the validity of the entire draft budget. Some major revisions would now appear to be mandatory, but the Chief Minister says it does not require any change in her budget at all.
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