Page 5204 - Week 17 - Thursday, 13 December 1990
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FORWARD ESTIMATES 1991-92 TO 1993-94
Ministerial Statement and Paper
MR KAINE (Chief Minister and Treasurer), by leave: I present the Forward Estimates report for 1991-92 through to 1993-94. The report is not a policy statement but a factual one. It details the forecasts of receipts and expenditure based on the existing policies of this Government as set out in the 1990-91 budget. The estimates in the report also reflect the impact of forecast levels of population, employment and urban development as well as the full year impact of initiatives taken in this current year's budget.
The publication of this report is an integral part of the financial management policies adopted by the Government. The report provides the basis upon which the strategy for the 1991-92 budget will be determined and it is the framework for establishing priorities over the longer term.
The economic environment is subdued. We are currently in a recession. A recovery in the national economy is not expected until at least the second half of next year. The monetary and fiscal policies of the Commonwealth will continue to impact more directly on the ACT than they do on the national economy. In addition, the Middle East conflict has resulted in a downturn in other major industrialised economies. This means less growth for Australian exports. Interest rates have dropped in recent months; however, future reductions are expected to be limited by concerns over the balance of payments.
This outlook means that the ACT economy will remain constrained in the short to medium term. The public sector is not growing and there is a slowdown in private sector economic activity. The broadening of the economic base will continue to be important to continued economic growth. In essence, the economic outlook is more serious than that forecast in the budget and it highlights the importance of the strategy that this Government has adopted.
The need to shift from dependence on the Commonwealth Government as our major employment base to a stronger, more diverse, private sector was rightly listed as the first goal in the Alliance Government's budget strategy and remains there. The other components of our strategy also remain unchanged. We will be aiming to produce future balanced recurrent budgets, to minimise borrowings and to better utilise the Territory's capital base.
In each of the last two years the Commonwealth has failed to honour its real terms funding guarantee. Next financial year is the first year of the two-year additional transitional arrangements foreshadowed by the Prime Minister. The Commonwealth Grants Commission is to report at the end of March next year on the extent of overfunding received by the ACT from the Commonwealth. The outcome, of course, is unknown at this stage and therefore key
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