Page 104 - Week 01 - Wednesday, 14 December 2016

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I also want to focus in particular on the numbers in the operating statement. The first is the UPF net operating balance, which I will call the operating balance. The UPF is the uniform presentation framework. This is the presentation of financial information which has been agreed upon by the commonwealth and all the jurisdictions.

It is important that we actually go by this UPF because this is actually something which can be compared between jurisdictions. The reality is that every jurisdiction does have its own accounting methodology. Whilst there are generic accounting standards there is still a fair bit of discretion as to how each jurisdiction does prepare their finances. So by using the uniform presentation framework we do actually have documents that can be compared.

In 2007-08 when Jon Stanhope was Treasurer the operating balance under the uniform presentation framework was a surplus of $171 million. That shows, of course, that revenue exceeded expenses. Further, revenue from the sale of physical assets, which is primarily land, was greater than expenditure on new physical assets by $87 million. Again, you have sales exceeding expenditure.

The territory was therefore a net lender by $257 million. This is the single number that encapsulates the territory’s finances. In effect, are they a net borrower or are they a net lender? It includes the operating balance and the sale and purchase of non-financial or physical assets. It indicates the financial impact of the ACT government on the ACT economy as a whole. It is, in effect, the bottom line in the operating statement presented on the first two pages of the audited financial statement.

Of course, in 2015-16 the fiscal responsibility—the surplus that we had under Jon Stanhope—is just a distant memory. In 2015-16, in contrast to the ACT being a net lender of $257 million, we had a deficit of $373 million. It is a significantly worse result—a $544 million turnaround, in fact.

The operating balance has been in deficit each year since 2011-12. In that year, when Katy Gallagher was Treasurer, the operating deficit was a relatively small $97 million. However, over the last four financial years, under Treasurer Barr, the operating balance has been in deficit by $309 million through to $646 million each year. The total of these four deficits is $1.8 billion.

Further, in 2015-16, revenue from the sale of physical assets was less than expenditure on new physical assets by $258 million. Again, that is in stark contrast to that under Jon Stanhope in 2007-08 when revenue exceeded expenditure by $87 million. So we have a massive turnaround here.

The territory was therefore in 2015-16 a net borrower of $631 million. It was a net borrower. We have gone from being a net lender under Jon Stanhope of $257 million to now being a net borrower of $631 million in the last financial year alone. That is an $888 million turnaround since 2007-08. That is just in a single financial year that we are talking about in terms of that actual turnaround.


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