Page 2980 - Week 07 - Wednesday, 30 June 2010
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You have to question the effects of the GFC, the global financial crisis. Many have now said it is really either just a Northern Hemisphere economic crisis or perhaps a NATO economic crisis and perhaps even a North American economic crisis. So you must question the arguments used by the Treasurer to explain the effects of the global financial and economic crisis on the ACT.
We have to note the comments in the economic reports from respected economic commentator CommSec, where CommSec said that the ACT was insulated from the US financial crisis and all the issues that we see in the ACT economy and budgets are, therefore, home grown. If the claim is that the ACT economy is doing well, then you have to ask the question: “If the ACT economy is performing so well, why is the ACT budget in deficit and likely to remain so for a couple more years?” The answer is that we have got a Treasurer who is not able to do the job. There were times when, I think, the Treasurer nominated that making savings would be quite easy. But those savings have not been forthcoming.
Then of course we got to the GST estimates. It is obvious that the ACT Treasurer was completely unprepared for the Commonwealth Grants Commission recommendation to reduce GST payments for the ACT. Blind Freddy could have seen that the weight of evidence and argument had persuaded the Grants Commission to make a dramatic change to the way in which the GST funds are carved up. The draft report was quite clear on that. The sad reality for the ACT—
Ms Gallagher: The final report wasn’t the draft report.
MR SMYTH: The Treasurer interrupts that the draft report is not the final report. That is very observant, Treasurer. That is very astute. The draft report was quite clear on that. The sad reality for the ACT is the failure of the Treasurer and, indeed, the Chief Minister to prosecute the case for the ACT to get a better deal from the determination of the GST relativities. The Treasurer admitted that she did not meet with the Grants Commission, and we have the result of that failure, although—and this is the good news—she has remained well briefed.
Then the Treasurer said that the ACT will lose more than $80 million next financial year. There is a Canberra Times article of 27 February this year that quotes those numbers. What it says is:
ACT Treasurer Katy Gallagher said yesterday the Government had feared it would take up to a $50 million hit, but instead would lose more than $80 million next financial year. That meant a $170 million deficit, and the negative impact of the changed formula would grow by more than about $5 million annually.
We have the Treasurer saying that the ACT will lose more than $80 million next financial year. This outcome was clarified in an answer to a question on notice, where the Treasurer advised that the actual loss in 2010-11, compared to the budget, would be $84.7 million. Unfortunately, this estimate does not appear anywhere in the analysis provided by the Grants Commission. This is simply another instance of the Treasurer guessing about the answer rather than providing accurate information.
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