THE ACT Budget for 2011-12 is predicted to be $181.3million in deficit, up from the original forecast deficit of $36.9million, Treasurer Andrew Barr reveals in today’s Territory Budget review.

Despite a mighty downswing in revenue, Barr is maintaining the Government’s pledge to return the Territory to surplus by 2013-14.

The Treasurer says Government lost $62million in GST revenue grants, $12 million of it this year.
Other weights on the Budget include, superannuation expenses up more than $22 million due to bond rate variations, property market revues forecast to decline with land release revenues down more than $39 million due to restricted supply and conveyancing revenue down more than $20 million due to lower than average prices in the residential sector and reduced activity in commercial sectors.

There has also been an expected $33million reduction in dividends and income tax equivalent returns from ACTEW, mainly due to reduced water usage.

And recent enterprise bargaining outcomes for ACT public servants and a decline in investments has also played a part.

“The ACT’s balance sheet remains very strong, with low debt and a strong asset base,” he said.

“The ACT has robust economic growth, with state final demand growing at 3.3 per cent year-on-year to the September 2011 quarter. Unemployment is below the national average, at 3.8 per cent.”

Mr Barr said the Government will “continue to act responsibly and prudently to return the Budget to balance”.

“The ACT Labor Government will not be engaging in any knee-jerk reactions, such as slashing jobs or slashing services,” he said.

“This is particularly important given the Commonwealth is contracting spending, and the ACT faces the prospect of a federal Liberal Government slashing thousands of public service jobs.

“In returning to a balanced budget our primary objectives will remain sustaining quality services to the community and supporting confidence in the economy. Doing otherwise will cause harm – to the economy, and to the community’s wellbeing.”

[box]The Government’s plan to consolidate the ACT’s Budget position:
• Moving $246 million of capital works in 2011-12 to later years.
• Continuing to protect jobs. The Government is committed to maintaining the current level of employment in the ACT public service.
• Releasing 18,500 blocks over the next four years for new housing, and continuing to look at infill opportunities. This will add to the stock of affordable housing in the ACT, and also boost revenue from land sales and conveyancing.
• Making the ACT’s tax settings more progressive, further improving economic efficiency and fairness.
• Continuing to make responsible savings. Savings initiatives for the current year alone amount to $33 million. [/box]