Page 889 - Week 03 - Tuesday, 24 February 2009

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its word—

that the election promises it makes will be fully funded and will allow the ACT to maintain surpluses in each of the years of the next term of government.

This is a Chief Minister who simply would not admit the deteriorating prospects for the economy, and simply said to the Canberra community, leading up to the election, “We’re going to have surpluses.” It has proved not to be the case.

What happened then? With the ACT election out of the way, we began to see a different picture emerging. On 11 December 2008, a report in the Canberra Times revealed that the ACT was indeed facing the prospect of a budget deficit. On the following day, another report in the Canberra Times revealed that the ACT Treasury had actually warned the Stanhope-Gallagher government that a deficit was possible for 2008-09.

When the Treasurer released the midyear budget review on 23 December, it showed that the budget outcomes for the current financial year and the outyears would actually deteriorate dramatically, from an aggregate surplus of $244 million as at May 2008 to an aggregate deficit of $286 million as at 23 December 2008. The Stanhope-Gallagher government was maintaining the fiction, however, that the outcome for 2008-09 would remain in surplus, and at that stage it was saying there would be a surplus of some $15 million.

The Canberra community now had the extraordinary spectacle where, in September, the Chief Minister, who was then the Treasurer, said, “It’s our word that we’ll have surpluses for the next four years,” yet our budget situation had deteriorated in such a short time frame to the point where we have had a turnaround of half a billion dollars. That is a financial turnaround of $100 million a month. It is almost unbelievable. It is just incredible—the volume of money and how we could turn from having his word in September, before the election, to the situation that we have now.

Turning now to the impact of what is occurring, my question is this: what is the impact of the budget deficits on the government’s ability to deliver its policies and its promises? The Stanhope government said, “It’s our word that you’ll have surpluses.” We now know that that is not the case, so what are the implications? What is going to happen now?

If we are going to have sustained deficits—and it appears that, every time we get a budget update, those deficits grow—what is actually going to occur? I will quote from the editorial in today’s Canberra Times:

The global economic plunge will force Governments to curtail many programs as their budgets go into debt. Doubtless the downturn will be used as a cover by administrations to break promises they never intended to keep.

Ms Gallagher: Are you going to table the document?

MR HANSON: Certainly.

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