Page 873 - Week 03 - Wednesday, 27 February 2013
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(iv) further driving efficiency in the ACT Public Service; and
(b) detail the impact of these measures on the community.
On page 10 of the 2011-12 financial audits, the Auditor-General makes some grim predictions about the future. If people have not read them, they should. The auditor says:
The long-term financial position of the Territory is much weaker than the budgeted and prior year’s positions due mainly to a substantial unexpected increase in the unfunded superannuation liability. The use of borrowings to fund the Infrastructure Investment Program has also contributed to the significant weakening of the long-term financial position since the previous year.
According to the 2012-13 Pre-Election Budget update, the Territory’s long-term financial position is expected to strengthen significantly from the position that existed at 30 June 2012. However, this depends largely on a substantial reduction in the unfunded superannuation liability in 2012-13.
The unfunded superannuation liability doubled from $2 627 million at 30 June 2011 to $5 242 million at 30 June 2012. If this liability were to remain at similar levels over the forward years to that which existed at 30 June 2012, then the Territory’s financial position would be much weaker than the position indicated by the 2012-13 Pre-Election Budget update.
Sombre words, Mr Assistant Speaker. When we get the budget update, I think we all need to be very cautious of the financial management of this government. As the motion says, this government has tabled on 5 June last year a deficit of $318 million. We see that that has blown out from the original budget by $44.6 million to $362 million. The budget deficit in the current year is almost 10 per cent of the budget. Over the forward estimates, the total deficit, according to the updates, increased by more than $100 million.
The budget is predicted to be in surplus by 2015-16 by a much slimmer margin of $29.3 million, less than one per cent of the budget—about 0.6 of one per cent. For this to be the case, we are relying on long-term capital gains in superannuation of $89.4 million in the 2015-16 year as the actual operating deficit is still $60 million. It is not something that inspires a lot of confidence.
To put this into perspective, in 2012 the expected long-term capital gain on superannuation investment was budgeted at $78 million with an actual gain of only $1.1 million. Clearly, the government cannot rely on superannuation investment gains to be in surplus. I think their predictions will be proven to be far from correct.
If we look at the revenue, it is forecast to increase by at least five per cent per annum over the forward estimates. Total revenue increased by $91 million over the forward estimates from the time of the budget to the budget review. Mr Barr has stated in his press release that revenue has softened across the forward estimates. Although the projected taxation revenue has decreased by $36 million over the forward estimates from the original budget, total revenue has increased and taxation revenue is still projected to increase by 17 per cent over the forward estimates.
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