WHY wait when you can have your tramline to Gungahlin and your epic lakeside gentrification project so much sooner on a finance plan?
As expected, the 2014-15 ACT Budget is all about increased borrowing to keep the government’s massive $2.5 billion, four-year infrastructure program going full steam ahead with $735 million this financial year towards projects to “transform” the city and keep the construction industry ticking over.
This year’s Budget represents the peak of spending on that infrastructure program, as well as the lowest point in the Territory’s finances for the foreseeable future, according to the outlook presented today by Treasurer Andrew Barr.
“We are not choosing the austerity path taken by conservative governments around Australia, who cut services and harm their community,” Barr said in his budget speech. “We will not add to the pain caused by the Commonwealth. We will not sacrifice essential services for the sake of the budget bottom line.”
Following what the Treasurer called “a fairly significant rewriting” of the Territory’s financial plans in light of the federal budget, the ACT’s deficit is now forecast at $332.8 million for 2014-15, almost tripling from the $109.5m deficit forecast in February’s Budget Review.
An optimistic looking graph now shows the ACT’s net budget position leaping back up to a $117m deficit in 2015-16 and more or less breaking even in 2016-17, a year later than Barr was forecasting back in February, prior to the federal budget, which he blames for a $375 million revenue write down this year.
Growth in terms of Gross State Product will continue but is expected to drop to 1.75 per cent, dipping below the national average, which the Treasurer attributes to slower growth in the public sector and household spending.
“We only borrow for infrastructure,” Mr Barr stressed to the media, explaining that the Government runs operating surpluses for its recurrent, or “day-to-day” expenditure this year and into the forward estimates.
Some of the big ticket infrastructure items in this year’s budget are the expansion of the Alexander Maconochie Centre ($54.1m), building Coombs Primary School ($47.3m), a new secure mental health unit at Symonston ($43.5m), health infrastructure including the new sub-acute hospital at the University of Canberra ($27.7m), the Canberra Hospital redevelopment ($24.3m), a multi-storey car park for Calvary Hospital ($19m), new fire and ambulance station at Aranda ($18.9m) and infrastructure in the new suburb of Molonglo ($17m).
Gungahlin gets some love with $20m for “Civic to Gungahlin corridor improvements” and $17.3m on fitting out a new ACT Government office building.
Health spending is $1.4 billion, including $34m on more elective surgery operations and about $40m to cover a reduced contribution from the Commonwealth, while education gets $961m, a rise of 6 per cent from last year.
With the new Commonwealth Government’s lack of support for the Territory, including its refusal to provide any assistance package to soften the blow to the local economy from massive cuts to the public service, Mr Barr said the ACT would have to rely on growing its export economy, pointing out that Canberra now accounts for 2.5 per cent of Australia’s service exports.
“The bottom line is we’re on our own and we’re going to have to make our own luck in coming years,” he said.