Page 1422 - Week 04 - Wednesday, 28 March 2012
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MR BARR: Indeed, there are significant global challenges that face the world economy that impact on Australia and therefore impact on the ACT. China has recently announced a lower growth target, and the ongoing repercussions of the global financial crisis, including the European sovereign debt crisis, are having effects on national and subnational economies.
Since the GFC there is no doubt that households are managing their balance sheets more conservatively, and that is reflected in a higher domestic savings ratio. This has had impacts on the ACT retail trade sector, although, importantly, these impacts have been offset by two recent RBA interest rate cuts in the latter part of 2011. Weaker household consumption is impacting on the GST pool, reducing the total funding available in the pool, although I do note that our recent Grants Commission assessment has seen the ACT’s relativity in the GST pool increase, something that the shadow treasurer did not believe would happen. He made a whole series of rash statements on that basis.
The higher exchange rate that the country is experiencing at the moment is impacting on a number of sectors important to the ACT economy; namely, education and tourism. There are additional structural changes in the national revenue base which are impacting on the commonwealth government’s taxation receipts, and we understand that there will be further consolidation of commonwealth government expenditure.
However, the greatest long-term risk is the election of a federal Liberal government, with 12,000 jobs being cut from the ACT by Tony Abbott and by Joe Hockey, who goes on every national program to repeat his claim. He beats his chest louder and it gets bigger and bigger every time he talks. He talks about 12,000 as a starting point.
MR SMYTH: Supplementary, Mr Speaker.
MR SPEAKER: Yes, Mr Smyth.
MR SMYTH: Treasurer, if the economy is doing so well, why is the budget doing so poorly? Why has the deficit blown out by 400 per cent?
MR BARR: As I indicated in my response to Ms Porter’s question, there are a number of factors that are impacting on government revenues. You see that in every state and territory in Australia and you see it impacting at a commonwealth level. Mr Smyth probably lives in a world of his own, but we are part of a national economy and a global economy.
Opposition members interjecting—
MR SPEAKER: Thank you, members!
MR BARR: So we are impacted by those trends. As I have indicated, what is happening in the Australian economy is that there has been a shift—
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