Page 1919 - Week 07 - Tuesday, 14 May 2013
Madam Speaker, on an Australian accounting standards basis, the general government sector recorded a deficit of $95.9 million compared to a year-to-date budgeted deficit of $270.7 million. The reason for this improved performance is mainly due to higher returns on the territory’s superannuation investments as a result of the strong performance of global equity markets.
A key balance sheet measure is net debt, which takes into account gross debt liabilities as well as financial assets such as cash reserves and investments. Net debt is calculated as the sum of deposits held, advances received and borrowings, less the sum of cash and deposits, advances paid, investments, loans and placements. Superannuation investments are excluded in determining net debt.
The net debt of the general government sector, excluding superannuation investments, as at 31 March 2013 was $120 million, a decrease of $593.2 million from the 30 June 2012 result of minus $473.2 million. The variance is mainly due to additional borrowings undertaken, as budgeted, to support the territory’s infrastructure program. By supporting the territory’s infrastructure program through prudent levels of debt, we are supporting economic activity and the provision of important facilities and infrastructure.
In particular, the territory’s infrastructure program responds to the needs of a growing city and of our growing population, and provides the necessary high-quality infrastructure required to support the increasing level of essential services the Canberra community deserves and expects. It is prudent for the government, which has a strong balance sheet, to borrow to finance high-quality assets which increase the productive capacity of the economy, thereby providing benefits to the community over a long period of time.
The March quarterly report demonstrates that the ACT’s fiscal position continues to be in strong shape, though, Madam Speaker, we do face challenges such as continuing global economic uncertainty, the need to return to surplus and the threat of significant public service job cuts should there be a change of federal government later this year. The March quarterly report demonstrates, though, that the ACT can face these challenges with confidence. It does demonstrate that there are short-term challenges, especially confidence suffering due to the threat of an Abbott government. The impacts on revenues are likely to continue in the short term and certainly will impact on the 2013-14 budget position. Madam Speaker, I commend the March quarterly report to the Assembly. I move:
That the Assembly takes note of the paper.
MR SMYTH (Brindabella) (10.52): I thank the Treasurer for the opportunity to comment on the consolidated financial report for the March quarter of 2013. Of course, the draft program last week indicated that today we were going to talk about the December quarter, but that dropped off the agenda. Indeed, one would have expected the March quarter tomorrow but it has come a day early. One can only assume that it has been dropped a day early so that it gets lost under the cover of the debacle that will be the federal budget tonight. When you look at the report, what we