THE ACT continues to “significantly” outspend its income, according to the auditor-general Michael Harris.
In a report on the financial results from the 2019-20 financial audits, Mr Harris says the territory’s net operating balance deficit of $961 million was significantly higher when compared to the budgeted deficit of $418 million. The net operating balance measures the difference between the Territory’s expenses and its revenue.
“While some of this is attributable to the ACT government’s response to the 2019-20 bushfires and COVID-19 pandemic, the cost of delivering services in the territory continues to be significantly higher than the income it generates,” he says.
Mr Harris notes that the ACT’s operating deficit of $967 million was also significantly higher than budgeted ($147 million) largely due to less than expected inflows from gains on investments and revenue from residential land sales.
“The territory estimates the trend of operating deficits to continue over the next four years,” he says.
Mr Harris says the ACT will continue to be challenged in meeting the territory’s unfunded superannuation liability ($7798 million) for members of the Commonwealth Superannuation Scheme and the Public Sector Superannuation Scheme, which accounts for almost half of the Territory’s liabilities.
“The Territory’s borrowings have significantly increased in recent years, approximately doubling from $3441 million in 2018 to $7026 million in 2020,” he says.
“In 2020, the borrowings increased by $2550 million (57 per cent) mainly to support ongoing investment in infrastructure projects as well as additional funding to
support the territory’s COVID-19 pandemic response.
“Total borrowings are projected to increase further from $7026 million in 2020 by $4886 million (70 per cent) to $11,912 million in 2024.”