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Legislative Assembly for the ACT: 2003 Week 10 Hansard (23 September) . . Page.. 3553 ..

MR SMYTH (continuing):

with references to economic cycles, not once, but in each of the 2002-03 and 2003-04 budgets.

I assumed that he would correct the error in his latest budget, but no. Then, in estimates hearings this year, the Treasurer admitted that he had used the term "economic cycle"loosely. It was quite evident from his tortured explanation that he had never thought about how his poor use of words had emphasised his complete lack of economic knowledge.

Mr Deputy Speaker, a matter that is related to economic cycles concerns budget deficits. In his speech in June 2001, the then shadow Treasurer castigated the then Liberal government for spending surpluses. He said that the 2001-02 budget included no buffer against unforeseen claims or demands, and he made a number of similar comments. Unfortunately, the Treasurer, with his 2003-04 budget, has now revealed his hypocrisy on budget policy. When asked during the 2003 estimates hearings why the ACT was budgeting for a deficit at a time when the economy was performing so well, Mr Quinlan replied, "The reason why we're going into deficit is that we're spending abnormal amounts of money."

How amazing! What perspicacity! As our Treasurer might say, a statement of the bleeding obvious. Here we have a Treasurer who criticises the former government for not husbanding its resources for prospective times of need and who then commits supposedly the same error and who explains a deficit by saying that it is because of abnormal spending. Amazing!

The pity of this outcome is that it is extraordinarily difficult to untangle the Treasurer's approach to budget policy because it is lost in a mangled maze of Quinlanspeak. Let me give an example. As an attempt to justify the 2003-04, the Treasurer said, "To set a budget, to still have a surplus, when you are spending abnormal amounts of money would be really to send the budget out of sync with reality."Try to get your mind around that one.

Mr Deputy Speaker, as far as I am concerned as shadow Treasurer, I believe a more appropriate response to the current position in which the ACT finds itself would have been to budget for a surplus in 2003-04, recognising that it is more than likely that both the Australian and ACT economies will experience some slowdown from the current levels of activity, especially as the ACT has experienced quite a boom in land and housing-related tax revenues over the last year.

Remember, Mr Deputy Speaker, this is the Treasurer who announced in May this year a government sector budget deficit of $8 million when, even at that time, revenue was continuing to pour into the government's coffers, and has continued to do so. Who needs reminding of the bonus of $42 million following Mr Corbell's botched Gungahlin land sale, which I suspect was not accounted for in Treasury and possibly now makes it a surplus of $34 million that we may expect.

The Treasurer has also commented that the best way to absorb the extra amounts of money that we are spending is to allow a small deficit. Isn't that a statement of the obvious? According to my understanding of budgetary policy, running a deficit means that more resources are being put into the economy. This is the classic Keynesian

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