Giving his first Budget as Chief Minister, the Treasurer said the territory’s operating balance will slump into a record deficit of $597 million in 2014-15 with another budgeted shortfall of $407 million in this year’s Budget.

He said the impact of the Mr Fluffy Asbestos Eradication Scheme would now be seen across two financial years, before reducing its effect on the Territory’s operating balance by 2017-18.

“To address the Mr Fluffy legacy in the ACT, the ACT Government borrowed $1 billion from the Commonwealth Government – around one fifth of our entire Budget,” he said

“The Commonwealth declined to honour an earlier agreement to assist with the cost of the scheme, leaving the ACT facing a $370 million net loss.

“Combined with the cuts to the Territory’s share of the GST of $137 million in 2015-16 and reductions in Commonwealth funding for health, it has left the ACT facing one of the most difficult financial landscapes in our short history.

“Despite these pressures, the ACT Government is supporting growth in the Territory economy, encouraging investment, supporting local businesses, lowering taxes and playing to our economic strengths. “Despite the Commonwealth Government cutbacks, we have kept the economy moving and unemployment low. Importantly, we’re doing this while maintaining the high level of service Canberrans deserve.”

Mr Barr also says Labor is promising a “another record investment” in areas in health and education in this year’s Budget.

He told the Assembly that this year his government would spend $1.5 billion in health, with $161 million in new funding over the next four years.

And in education he is spending more than $160 million of new funding for classrooms and schools, and for more support for students.

“To ensure our suburbs and town centres look great – to ensure they reflect the pride we feel in them – this Budget provides more funding for suburban renewal,” he said.

“This Budget delivers more urban maintenance right across Canberra.

The contentious light-rail project is getting a $375 million capital contribution to fund the project once construction of stage one is complete and operation has commenced.

He has also allocated $2.8 billion over four years to capital works.

“This investment will generate jobs for Canberrans, stimulate the building and construction industry in the ACT, and provide the facilities and infrastructure our residents and businesses need,” he said.

In characterising the unrelenting increases in rates as the government’s “nation-leading tax reforms”, he said: “The Government is continuing to cut duty on insurance premiums and continuing to cut stamp duty – making insurance cover and buying a home more affordable.

“Social inclusion is a cornerstone of this Government’s values and policies – and the ACT Government is committed to ensuring opportunities can be shared by all Canberrans.

“The ACT Budget funds more that $389 million in recurrent funding for people who need a helping hand.

“The 2015-16 Budget also builds on the long-standing and ongoing support to counter domestic violence in our community. New funding in this Budget to increase capacity at key domestic and sexual violence services to handle the spike in demand is coupled with additional funding to prevent domestic violence and educate the community.”