None . . Page.. 1560 ..
MRS CARNELL: Thank you very much, Mr Kaine. Mr Speaker, this is an excellent question because it goes to the heart of the principles driving the three-year budget strategy that I put to the people of Canberra yesterday. When the ACT was granted self-government it was essentially debt-free. As Ms Follett would know, that is the basis of the AAA credit rating. It has nothing to do with her management. Unfortunately, there were strings attached. The Commonwealth made it clear that it would be weaning Canberra off the endless supply of Federal money and forcing the city to pay its own way. This meant reducing Commonwealth funding to State-like levels over an eight-year period. Since self-government, Commonwealth general purpose funding to the ACT has, in fact, been cut by 49 per cent. The key task of each ACT government has been adjusting to the ever-reducing funding.
So, what is the record? In 1991 Ms Follett took over from Mr Kaine an economy in fine shape, with a healthy budget and reserves in the Consolidated Fund of $180m. She was handed a budget in surplus, in GFS terms, and has been running it down ever since. In 1991-92 there was a $36m surplus in GFS terms. In 1992-93 there was another surplus, but this time only $30m. It was down $6m. The slide was beginning. In 1993-94 it was still in surplus, but this time only $14m. This time there was a deterioration of $16m. The slide was getting worse. Then, in 1994-95, last year, under this previous Government, there was a $46m turnaround. We went from a $14m surplus for the year to a $32m deficit in GFS terms. What I would like to do now is table, if the Assembly is happy, a graph of the Consolidated Fund running from 1990 through to the present.
MR SPEAKER: You do not need leave, Chief Minister.
MRS CARNELL: In other words, for the first time since self-government, a budget deficit was recorded in GFS terms. In her final budget Ms Follett forecast a deficit of $10m, which ended up blowing out to more than three times that amount. I cannot stress enough how dramatic this financial turnaround was.
In its final year in power the Labor Government squandered a strong financial position and plunged the ACT into debt. In their desperate bid for re-election they literally threw buckets of money at anything they could find to spend it on. For example, three days before the election they did a deal with Canberra's nurses for a 9 per cent pay rise with very little offsetting. To pay for this profligacy, they plundered the bank account. Reserves fell to virtually nothing, as everyone will see from the graph that I have just tabled. Earlier this year the ACT's Consolidated Fund, its main bank account, hit zero for the first time since self-government. Labor took over reserves from Mr Kaine of $180m and squandered the lot. The deficit recorded in 1994-95 is not only an indictment of the previous Government's financial irresponsibility; it also provides the context for my first budget. That is the reason why we are turning around a $44m deficit, a legacy of the previous Government, into a $21m surplus in three years.