Page 892 - Week 03 - Tuesday, 24 February 2009
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when the economic situation deteriorated, as inevitably it would—I hope the minister understands this; she certainly talks about economic cycles—and there was going to be a downturn, we were not prepared for it.
What should we have done? We should have strengthened and diversified our economy. We should have spent more wisely. We should have cut the waste. We should have realised that the good times would end. We should have invested more in essential infrastructure. We should have made investing in Canberra more attractive to business. We should have inoculated ourselves for the bad times. We should have instilled confidence in our economy and not talked it down. That is what we should have done, but what is the case now?
The reality is that the government now have some hard decisions to make, and they have got to be up-front with the community. They cannot go through the sham of giving their word about services that just did not eventuate. They have got to start telling the truth to the community. They have got to tell us what the true state of the budget is. They have got to tell us now what programs they are either going to delay or cut. They have got to tell us how much debt they are going to burden our economy with, and they have got to tell us how and when they are going to get us out of that debt.
MS GALLAGHER (Molonglo—Treasurer, Minister for Health, Minister for Community Services and Minister for Women) (4.11): I welcome the opportunity to talk about the state of the ACT budget today. There is no doubt that the world economic outlook is bleak. The global financial crisis is expected to take a significant toll on growth and employment in both advanced and developing economies throughout the world and we are seeing just the beginning of this in news reports every day. The International Monetary Fund is forecasting advanced economies’ output to shrink by two per cent in 2009. The full effect of the global financial crisis is yet to hit the Australian economy and it is in this context that governments must formulate responses in 2009.
The ACT economy will meet the most challenging world economic environment in generations from a position of relative strength. The ACT has performed strongly over recent years. Our unemployment rate is at an all time low of 2.6 per cent and we recorded economic growth of 2½ per cent in 2007-08 in real terms. This is a strong growth rate given that it came on the back of record high levels of activity in the years before that.
The global financial crisis that started as a result of difficulties in the US subprime mortgage market has led to a significant economic slowdown across the globe. The pace of the slowdown may prove to be unprecedented. Problems in financial markets have been transferred into the real economy. The magnitude of the world slowdown means that both the Australian and ACT economies will not escape from the fallout.
While we are very fortunate that our unemployment rate is at 2.6 per cent, it is nonetheless very likely to rise in 2009. However, we do expect that the rate will remain below the national average and that employment and economic growth will remain positive. In this situation there is little the territory government can do to
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