Page 882 - Week 03 - Wednesday, 27 February 2013

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Certainly the fact that we are in deficit does not mean that we should do nothing at all. We need to have a fiscal policy to manage the economy, keep Canberrans employed and prosperous, and also continue to spend on necessary infrastructure. We need to invest in sustainable infrastructure. This is something the Greens have said on many occasions. Significant investments now can make both significant savings down the line and significant improvements to the lives of Canberrans. It is a well-recognised concept to borrow money now to make investments that pay back over an amount of time. That is a policy and fiscal position that I am very comfortable with.

There is no reason why we cannot continue to make our city more sustainable as we maintain a balanced budget over the economic cycle. We need to be mindful of the fact that the local economic cycle is not necessarily the same as the national economic cycle. Certainly, many would observe that Canberra tends to be counter-cyclical. At a time when the federal government is in expansionary mode through trying to prop up the national economy, as we saw through the period immediately following the global financial crisis, you could certainly make the observation that Canberra was going very well at that point as the federal government invested heavily in and expanded the size of the public service to roll out those programs. Potentially we are about to see that cycle swing back the other way, particularly if there is a change of government at the federal election in September.

There are a number of significant risks still, both on the international and on the domestic horizon. The outcome of the Italian election in the last few days and the little bit of shifting around that has been done on the international financial scene give us an indication of how rapidly perceptions can change and the impact that can flow through to both our national economy and then, of course, the local economy.

As I have said, the ACT could be in a very difficult position if there is a change of government at the next federal election, with the unemployment rate potentially increasing anywhere between 40 and 200 per cent, depending on which of the predictions you believe—whether it is Mr Seselja’s 4,000 job cuts to the public service, Mr Abbott and Mr Hockey talking about anywhere between 12,000 and 20,000 public servants, or Senator Humphries, if he makes a comeback in the next few weeks, and his figure of 12,000. Any of those figures, irrespective of which of those Liberal members you take the projections of, will have a very significant impact on the ACT economy.

It is not just the public service job cuts; we all know that so much of the private sector around the ACT is built around servicing that government sector, whether it be printers and various suppliers to the commonwealth government through to the hospitality sector. With significant unemployment we will obviously see people not having the level of discretionary spending they have when they are employed. That is a self-evident concept.

In terms of the delayed projects Mr Smyth is asking for information on in his motion, it is important to understand that they are all listed in the back of the budget update, so I understand that information is already available. In terms of the rest of the points he has made, initiatives will have to be put in place to manage the budget, and the

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