Legislative Assembly for the ACT: 2008 Week 01 Hansard (Wednesday, 10 December 2008) . . Page.. 251 ..
the USA and now Canada. While Australia is quite well positioned nationally to withstand the impact of these international developments, we are not immune and we have seen some of the consequences for Australia in terms of the 40 per cent reduction in interest rates and the reduction in many asset values, particularly for equities, commercial properties and residential properties.
But where does the ACT sit in the midst of these developments and, in particular, how did the ACT economy get to the point where it is now, where we are facing, for example, a deficit in our budget for the year 2008-2009? The journey has been a sad and sorry saga. The ACT has come through a period of extraordinary economic activity that has led to a boom in revenue, particularly from GST collection and from property transactions. And this boom has been in the order of $1.6 billion above expectation—$1.6 billion above what was estimated for the period 2002-03 to 2006-07.
At an early point in this period I recognised the significance of this boom. I recognised the importance of the ACT government husbanding this unanticipated revenue and I made many comments over time but in particular in my budget reply to the 2004-05 ACT budget. I started by saying that it was a budget of missed opportunities.
Almost quite identically, the editorial in the Canberra Times after that budget was headed “Budget misses opportunity”. The quote from the Canberra Times is quite instructive. This was in May 2004. The Canberra Times says that the budget is:
… a bit disappointing for anyone hoping for some leadership, inspiration or a public dividend from an economy essentially in good shape.
In the last four years, we have not seen a change.
I spent some time in that budget reply detailing how the Stanhope-Gallagher government had failed to take full advantage of the ACT’s revenue boom, detailing how funds had been frittered away on what I described as “short-term expedient spending”. We should all regret that the Stanhope-Gallagher government did not do more, much more, over the past five or six years to position the ACT much more strongly to withstand external shocks, unlike the case we find ourselves now in, where we will have paper-thin surpluses at this point in the next couple of years, bordering on $10 million, $11 million and $12 million. That is not having the ACT economy or budget in a position to withstand external shocks.
But of course you realise why the Stanhope-Gallagher government was not able to do this. On the one hand, there was little strategy to guide how spending would be undertaken. We just heard in the previous debate how Mr Quinlan revealed that what he could not do was stop the reckless spending of his colleagues. And the reckless spending has continued for seven years. We now find ourselves where we have spent in the good years and we are not well positioned for the down years.
Indeed, we saw how lacking in strategy the Stanhope-Gallagher government has been, with its appalling decisions that were particularly revealed in the 2006 ACT budget—the savage cuts to schools, to business programs, to sports programs, to tourism