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Legislative Assembly for the ACT: 1998 Week 4 Hansard (24 June) . . Page.. 875 ..


Economic Growth

MR STANHOPE: Mr Speaker, the ACT budget forecasts a gross state product rise of 3.2 per cent in 1998-99 and an average annual growth of 3.6 per cent over the following three years.

Mr Humphries: Whom is the question to?

MR STANHOPE: To the Chief Minister. Given that the Federal budget forecasts a national growth rate of 3 per cent - a figure Westpac economists believe is more likely to come in at around 2.25 per cent - that the OECD predicts an average 2.5 per cent growth, that the United States and Germany forecast that theirs will be 2.75 per cent and that the forecast for the world is 3 per cent, does the Chief Minister agree that the budget forecast that the ACT will outperform Australia, the OECD, the United States, Germany and the world is heroic?

MS CARNELL: No; because it is the reality. In the six months to March this year, in terms of private sector growth, guess what. The ACT outperformed Australia, at 6.2 per cent growth in the private sector. The basis of the growth figure is that the ACT is coming off a very low base. The ACT has had significantly lower growth than has been the case in Australia, in the national budget, and certainly in other States over the last couple of years. As we come off a lower base, then the projection, I believe, for 3.2 per cent growth over the next 12 months and in the future is very realistic.

I think it is very important to remember - and obviously those opposite would not have a clue - that the ACT's economy is basically a service-based economy that will not be so affected by things like the Asian crisis as the other States and the Federal budget will. That is their view as well as ours. Economies that are not so commodity based but more service based will not be so affected. Again, we are coming off a lower base. Our private sector growth is significantly outstripping national private sector growth or private sector growth in other States. Commonwealth cutbacks have significantly slowed. Take all of those things together and the projection of 3.2 per cent for the ACT's growth is quite achievable.

Budget Expenditure

MR HIRD: There must be two Mr Quinlans in this place. I say that because I heard on radio a couple of weeks ago Mr Quinlan urging the Chief Minister to use the budget to stimulate economic activity in the ACT, but yesterday I understand that this same Mr Quinlan, or Quinlan 2, was suggesting that you should cut another $100m out of spending. Can the Chief Minister inform the parliament what the impact of such a savage cut would be on the ACT?

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