Page 2140 - Week 07 - Thursday, 16 May 2013

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Question resolved in the affirmative.

Bill agreed to in principle.

Leave granted to dispense with the detail stage.

Bill agreed to.

Budget review 2012-2013

Debate resumed from 14 February 2013, on motion by Mr Barr:

That the Assembly takes note of the paper.

MR SMYTH (Brindabella) (12.10): The midyear review is an interesting document. It was released at the same time as the December quarterly and, of course, puts lots of information into the public arena. The midyear budget review showed that the current year deficit deteriorated from the original budget by some $44.6 million, increasing the deficit this year to an enormous $362.9 million, almost nine per cent of the total budget. And, of course, the March consolidated quarter financial reports also confirm the $362 million has not shifted. Over the forward estimates, according to the document, the deficits have now been revised upwards by a total of $100.9 million. The budget is predicted to be in surplus by 2015-16 by a mere $29.3 million, less than one per cent of the budget—0.61 per cent.

For this to be the case, we are clearly relying solely on long-term capital gains on superannuation of $89.4 million in the 2015-16 year. The actual operating deficit in 2015-16 is still $60 million. So to put this into perspective, in 2012 the expected long-term capital gain on superannuation investments was budgeted at $78 million, with an actual gain of only $1.1 million. The government, I think, cannot rely on superannuation investment gains to put government in surplus. Their predictions are far from correct.

You only have to take into account the attacks on the ACT economy and, therefore, the budget by the federal budget last evening. The job losses in the public service, the loss of funding to the higher education sector, the proposed reduction in the amount of space that public servants will have on a square-metre basis are an attack on our property industry, and we see very little in return. The $29 million is a thin margin and I think there should be concern about this government’s ability to achieve that. We have certainly seen from Wayne Swan the total inability to achieve surpluses. It will be interesting to see what happens here.

Revenue is forecast to increase by at least five per cent per annum over the forward estimates. Total revenue has increased by $91 million over the forward estimate from the original budget to the budget review. Mr Barr has stated that on a number of occasions but he said that revenue has softened across the forward estimates. That was in the media release on 14 February. Although the projected taxation revenue has decreased by $38.6 million from the original budget, total revenue has increased and

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