ACT Budget: Where has all the money gone?

IF you were earning double the pay you received just over 10 years ago, you would probably have a bigger house, a good car, kids doing well in education – perhaps some nice artwork.

You would not expect to see increased borrowings and not much to show for the increased earnings. This is where the ACT Government finds itself at Budget time in 2012.

The first Budget the Labor Government produced after it came to power was in 2002. In that year, the revenue was predicted at just over $2 billion. This year, the Budget predicts revenues approaching $4 billion.

Despite this, there is a considerable increase in borrowing of almost a half a billion dollars. This borrowing is not for short-term bills, but for capital infrastructure – similar to taking a mortgage out on the family home.

This explains, despite the borrowings, why Standard and Poor’s Rating Service will continue to rate the ACT at the highest level of AAA.

There have been pressures – not so different from a growing family.

For example, there are more people in the ACT than there were a dozen years ago and more babies being born. There are more people in jail, more police on the street and more streets for them to cover.

A growing family has bigger medical bills. As people age, the costs of treatment invariably increases.

Like the rest of Australia, the ACT faces an increase in preventable chronic disease associated with tobacco, inappropriate use of alcohol and poor eating habits.

The household that smokes, drinks too much and eats poorly will face similar problems.

The ACT health investment this Budget – largely driven by Commonwealth reforms – is principally about fixing people when they are sick, with a minimal focus on prevention – although there is about $800,000 for a healthy weight action plan and the Heart Foundation’s Active Living along with increased efforts in sport and recreation.

Education is important to most families. Investment in education now will mean better ability to earn money in the future.

Governments need to build more schools for the growing population and make sure the quality of education meets the expectation of the community. Priorities for the Education Directorate are broadly based on curriculum, literacy and numeracy, but also focus on those most in need including Aboriginal and Torres Strait Islanders, disability education and “strengthening student engagement”. The real question is about how much better for the increased investment over 2002.

Families like to feel safe and do spend accordingly. For the ACT Government this is reflected in police, prisons and justice.

There will be a new fire and ambulance service based in Charnwood to improve access for people in this growing area. The court system will receive a boost at the same time as the Legal Aid Commission in an attempt to make the justice system “fairer and more efficient”. There was no jail in 2002 and it certainly was not a cheap structure.

No new car for this ACT family – not even a good second-hand one. The community equivalent is light rail or faster more efficient dedicated busways. Instead we are seeing an investment in the sort of mobile apps that exist in other cities in Australia to assist people to use existing bus systems. And over the period, the Labor Government has bought public artwork that some consider quite nice.

Governments, like families, have to watch outside influences to understand what might impact on their constituents.

The Federal Budget, with its savage commitment to a surplus, is likely to have significant impact on employment in the ACT.

Treasurer Andrew Barr warned about the impact of a change of government for the ACT: “We cannot save this city from the Federal Liberal Party – the party of recession for the ACT – and particularly the cuts of Joe Hockey … Zed Seselja is tied to Tony Abbott and Joe Hockey and there is nothing he can do to untie himself.”

With about half of the ACT revenue coming from the Commonwealth, the out years of this Budget reflect the Government’s concern with a prediction of a flattening income over the next few years before the ACT revenue begins to fire up again.

The truth is that this is the first time any ACT Government has seriously shifted revenue priorities in reforming the tax system to make the system fairer and more equitable.



Michael Moore was an independent member of the ACT Legislative Assembly (1989 to 2001) and was minister for health.


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Michael Moore
Michael Moore is a former member of the ACT Legislative Assembly and an independent minister for health in the Carnell government. He has been a political columnist with "CityNews" since 2006.

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