Page 3419 - Week 08 - Tuesday, 17 August 2010

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Mr Smyth: A technical recession?

MS GALLAGHER: That is what it was called.

Mr Smyth: It was a recession. There was nothing technical about it.

MS GALLAGHER: That is what it was called, Mr Smyth.

Mr Smyth: You had two negative quarters of growth.

MS GALLAGHER: When you look at what the cause of that was, you see that, despite the reduction in private consumption expenditure, it was the commonwealth winding back on some of their spending. Indeed, what they outlined in their budget and what they actually did were different, and that had an impact on the ACT economy. The fact is that cuts in the commonwealth government proposed by the coalition and supported by those opposite pose significant risks to the ACT economy, given the structure of it.

Our budget identified that the ACT will continue to face a challenging economic environment. We see the commonwealth’s expenditure, or not, as a key driver as to how significant those challenges are for the ACT budget. We have been watching this for a couple of years now as we understand the government’s need to restore their budget position to a surplus position. The difference is the approach by the two parties.

Federal Labor has outlined savings, but these savings are measured and they are staged. I agree that all governments need to make sure that their public expenditure is done in the most efficient way; we do that here every year through our budget process.

The cuts that the coalition plans to make—the size of them and the speed of them—are what will significantly damage the ACT. The coalition plans to cut $24 billion in the four years to 2013-14. That is the most significant issue for the territory—not necessarily that there are cuts, but the size and the speed of the cuts. Indeed, 12,000 public service jobs in two years are being cut. We estimate—I note the Greens’ analysis—that this potentially is 4,000 jobs here in the ACT, which would represent a decline of around two per cent in the current employment level.

However, it would not just affect public employment levels. The constraint on commonwealth government expenditure here, combined with those public service staffing cuts, is something that will have significant flow-on effects in the private sector and therefore the territory’s budget.

We saw what happened in 1997 here. I have lived here all my life; I was born here. I remember wandering around this town in 1997 and seeing not just the fact that the economy was in recession but the sense of hurt amongst the Canberra community at the savage nature of the cuts and what that did to our community. I do not think that will ever be forgotten.

When you look at some of the commentary in this debate, all you need to say is, “Remember 1996-97,” and any long-term Canberran will nod their head and say,

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