Legislative Assembly for the ACT: 2003 Week 5 Hansard (6 May) . . Page.. 1578 ..
MR QUINLAN (continuing):
outperformed the national economy. Recently, our stronger performance has been due to our relative insulation from the adverse impacts of slowing global economic growth and the drought.
As and when global growth picks up and the drought ends it can, however, be expected that the national economy will recover at a rate more quickly than the ACT.
Mr Speaker, the territory has benefited from the low interest rate environment and recent expansion in Commonwealth government outlays. The low interest rates have stimulated both the housing industry and household consumption. This has supported jobs growth in labour intensive industries.
It is the case that, both in the ACT and nationally, households have increased their indebtedness and increased wealth accumulation through increasing home equity. This, of course, cannot continue indefinitely and we are already seeing signs of a slowdown in household consumption as household debt reaches record levels. It is important that we accept the expectation of normalised growth in both construction and household consumption against which this budget has been framed. Combined with the expectation of only moderate growth in federal government outlays, the ACT economy is forecast to grow more steadily over the budget period. Gross state product is forecast to moderate from 3.9 per cent in 2001-02 to 3.4 per cent this year and 3.1 per cent in 2003-04.
Mr Speaker, consistent with this forecast, employment is expected to moderate from its exceptionally strong growth this year of better than 2 per cent to 1.4 per cent in 2003-04 and similar levels in future years. These rates of growth are in excess of the forecast population growth of approximately 0.9 per cent annually, reflecting in part an increase in the working age population as a proportion of the total population.
Commonwealth-state financial relations
Mr Speaker, let me now turn to the territory's financial relations with the Commonwealth.
The territory stands in good stead with respect to Commonwealth-state finances and continues to receive an above equal per capita share of the GST revenue pool, which is fully deserved given the special circumstances faced in managing the territory.
Mr Speaker, 2003-04 will, however, see the ACT suffer a setback, with the territory's per capita relativities down on 2002-03 levels. Consequently, the territory's general revenue assistance is estimated to increase by just $6.9 million or 1 per cent in the coming year. This is a smaller than expected increase, and one that places some additional pressure on the territory's budgetary position.
The decrease in the relativities is, however, reflective of the strong economic trends the territory has experienced over the past 12 months. The Commonwealth Grants Commission has concluded that the ACT's capacity to raise revenue has increased, citing payroll and gaming taxes as well as stamp duty and conveyancing as areas where the territory could generate further revenue.