ACT Chief Minister and Treasurer Andrew Barr has once more struck a note of cautious optimism as he revealed the 2022–23 Budget. That was the theme of his mid-year 2021–22 Budget Review in March, and of his press conference today.
The ACT was “in a better position than the other states and territories, and the nation as a whole, to contain inflation, and to see a lower spike and lower increases in the cost of living over the coming 12 months,” he stated.
- ACT Budget Review: ‘Cautious optimism’ for next year (24 March)
- Barr: Economic recovery an ACT Government priority for 2022 (8 February)
- ‘Full throttle’: Turbo-charged Budget will get Canberra’s economy moving again (6 October 2021)
Federal Treasurer Jim Chalmers warned last month of tough economic times for families as inflation rose and the cost of living rose. The lifting of the cash rate by the Reserve Bank also affected business and consumer confidence.
- Rising profits not wage increases behind inflation: report (18 July)
- All big four banks pass on full rate rise (6 July)
- Reserve Bank of Australia lifts cash rate to 0.35 per cent (3 May)
“The ACT will not be immune from all of those challenges,” Mr Barr said. “[But] the policies that we have put in place will work to protect Canberrans against the increases in the cost of living experienced in other jurisdictions, whether it is energy prices, water prices, or fees and charges.”
Inflation may have already peaked, Mr Barr thought; at any rate, it would be lower than the rest of the country. Electricity prices, water prices, and housing prices would all fall. Increases in fees and charges were well below inflation, and more in line with the price index (the rate at which people’s wages grow).
The ACT Government would help lower-income earners meet increased costs of living. For instance, the 31,000 households that received a Utilities Concession would get $800 to pay their energy bills.
The Budget also showed a fiscal improvement of $800 million over the forward estimates from the 2021–22 Budget in October. In fact, the ACT economy had bounced back as public health social measures had eased, today’s Budget states.
The ACT’s economy had grown for 31 consecutive years, the best record of any Australian jurisdiction. Real Gross State Product growth was expected to be 3 per cent in 2021–22. The economy would grow at 3 per cent over coming years.
The deficit in 2021–22 is estimated to be $580.4 million, $371.1 million lower than forecast at the time of the 2021–22 Budget. In coming years, the deficit will be lower than previously estimated, and will reduce to $229.4 million in 2025–26.
The ACT was close to full employment, with an unemployment rate of 3.1 per cent (compared to 6.6 per cent at the height of last year’s lockdown); job vacancies were at record highs, and underemployment at record lows.
The ACT has the fastest-growing population of any jurisdiction in Australia, and today’s Budget invests in its future, Mr Barr said.
Over the last decade, the ACT’s population grew from 370,000 to 455,000.
“The fact that our population has grown by nearly 90,000 people demonstrates that people want to live in Canberra, and that explains why we have seen such strong demand for housing, such strong enrolments in our schools, and pressure on our health system,” he said.
It also showed that the ACT was entitled to a bigger share of GST revenue, by around $470 million.
Now the economy is improving, as Mr Barr explained yesterday, and the “quite extraordinary period of economic uncertainty” caused by the pandemic was past, the government would move away from emergency levels of recurrent and infrastructure spending to normalise the budgetary settings for the ACT.
“Through this Budget, we endeavour to set the city up for more years of population growth and economic growth,” he said.
“As we enter into our 32nd year of consecutive economic growth, the Territory is well placed to meet the challenges that are apparent in the national and international economy.”
What’s in the Budget
The major focus of the Budget is to invest in infrastructure and services to meet Canberra’s growing community needs, Mr Barr said:
Health
The peak of this COVID-19 wave may have passed, Mr Barr believes. Nevertheless: “We’re still dealing with the third year of the pandemic, and it still puts pressure on our community through increased presentations in our hospitals, more illness over this winter, more staff absenteeism across all areas of the economy.”
The government has announced $390 million in new funding for health and community wellbeing.
- ACT Budget promises multi-million-dollar investment in health (27 July)
- Maternity services to receive $12m boost in upcoming ACT Budget (24 June)
First, $59 million to continue its COVID-19 health response, including supporting the Health Emergency Control Centre, compliance activities, and hospital and testing services; ventilation in public schools; and continuing the Office of the Coordinator-General COVID-19 non-Health.
Second, $100 million over four years to strengthen and expand critical hospital services, including $16.4 million for more allied health staff at Canberra Hospital (Aboriginal liaison, audiology, nutrition and dietetics, exercise physiology, occupational therapy, physiotherapy, psychology, social work and speech pathology workers); $29.8 million for more elective surgeries (60,000 this term of government); $27.5 million to increase services at Calvary Public Hospital Bruce; and to boost outpatient services through a new Neurodevelopmental and Behavioural Assessment and Treatment service.
Third, $70 million for mental health and community health care support, given 8 per cent of Canberrans experienced high levels of psychological distress late last year. The measures include mental health and wellbeing for children, youths, and young adults; more alcohol and drug treatment; making abortions more affordable; and suicide prevention programs. Palliative Care ACT will receive $2.6 million over four years to operate the Leo’s Place respite hub, while a residential program at the Ngunnawal Bush Healing Farm will also be funded ($2.1 million).
Fourth, $160 million for facilities and systems to support the health system. Expanding Canberra Hospital is the biggest healthcare infrastructure project any ACT Government has undertaken; the Budget includes $52.4 million for the first phase, and $37.4 million for new clinical equipment. Other measures include implementing the Digital Health Record ($50.8 million); a southside hydrotherapy pool at the Tuggeranong Lakeside Leisure Centre ($8.5 million); redeveloping the Watson Health Precinct; modernising the ACT Government Analytical Laboratory; and planning a 12-bed acute integrated palliative care ward at the Canberra Hospital.
The government will also mandate minimum nurse / midwife to patient ratios. The government has committed to employ 400 more health care workers ahead of schedule.
Education
The Budget will invest $240 million in new funding over four years for education and skills.
$35 million will ensure public education is high quality and safe. This includes cleaning schools ($17.3 million); laptops for all teachers and admin staff ($6.9 million); free public preschool education ($6.6 million); and setting up a Safe@Schools Taskforce.
The government will spend $165 million more over five years for new and expanded schools, bringing investment on this measure to more than $700 million to 2026–27. There will be a new primary school in Whitlam, Molonglo ($84.4 million); Majura Primary School, Watson, will be modernised ($40.5 million); Margaret Hendry School will be expanded, and a new high school built in Taylor ($33.1 million); and three new modular learning centres will be installed, and eight more reused ($8.5 million).
- New and bigger schools announced for Canberra (20 July)
- New schools for Gungahlin announced (18 July)
$310 million ($35 million more) will be spent on skills and training, including $31.2 million more for the new Woden CIT facility, and $4.2 million so Study Canberra can help tertiary education institutions recover.
Infrastructure and business
The ACT Infrastructure Investment Program (more than $7 billion over the five years to 2026-27) will expand the Canberra Hospital and the Canberra Theatre, and extend light rail to Woden.
To transition Canberra to net-zero emissions by 2045, it also funds electric buses and vehicles, and government assets and vulnerable households transitioning away from gas.
Other projects include schools, more public housing, and community and safety infrastructure.
“These are assets that will be enjoyed by generations of Canberrans,” Mr Barr said.
More than $35 billion will support businesses and implement CBR Switched On: ACT’s Economic Development Priorities 2022–2025, the Territory’s economic recovery strategy. This includes $22.4 million to create new businesses and jobs, and $5.5 million to establish an Office of Industrial Relations and Workforce Strategy.
A further $16.4 million will set up a modern digital planning system.
Housing and home
The government has announced $140 million of new funding for social and affordable housing.
The Budget provides more than $95 more million over four years for social housing and homelessness. This will be used to repair and maintain public housing ($57.3 million); build 140 more public housing dwellings ($29.8 million); continue specialist homeless programs that began during the pandemic ($7.3 million); upgrade insulation and electrics.
To make housing more affordable for low-to-medium income households, the government will invest more than $45 million. The lowest conveyance duty tax threshold for residential owner-occupiers will be raised from $200,000 to $260,000; the Home Buyer Concession Scheme income eligibility threshold will be increased from $160,000 to $170,000; and the Deferred Duty and Disability Duty Concession Schemes price eligibility thresholds will be increased from $750,000 to $1 million. Community housing providers, eligible landlords, and low-income homeowners will be able to replace gas with electric appliances; and a block of land in Turner will be released for a Build-to-Rent pilot.
The government will provide more than $20 million over four years to improve housing choice and quality. This includes more than $10 million to support land release; $9.5 million to remove asbestos; and $2.2 million to improve the building regulator.
The government is planning for an increase of 30,000 dwellings in the ACT over the next five years, which will increase Canberra’s housing supply from 180,000 to 210,000 dwellings. In 2022–23, more than 700 public housing dwellings will be being constructed (193 completed).
Community support, social inclusion, and safety
New initiatives to improve community support, social inclusion, and safety will receive $230 million. This brings funding for community support and social inclusion to almost $500 million in 2022–23; for justice to more than $315 million; and for emergency services to $440 million.
The budget includes $35 million of new funding for community support: new accommodation for the Gugan Gulwan Aboriginal Corporation ($4.5 million); another one-off $50 increase in the Utilities Concession for more than 31,000 low-income households ($1.6 million); improved supports and outcomes for Canberra’s carers ($825,000); $750,000 for the Chief Minister’s Charitable Fund; $330,000 for Roundabout Canberra; $180,000 for the Refugee, Asylum Seeker and Humanitarian Discretionary Fund; and $28 million for community sector organisations in recognition of the Fair Work Commission’s recent decision to increase national modern award wages by 4.6 per cent.
New initiatives to support social inclusion will receive more than $75 million, notably more investment in family support services and children who need out of home care ($68.7 million). LGBTIQ+ people ($3.7 million); people with variations in sex characteristics ($2.6 million); and community language schools ($513,000) will also benefit. A post-disaster Social Recovery Framework will also be set up ($400,000).
- ACT Government funds community services (22 July)
New or expanded programs and actions to prevent and respond to sexual assault and family and domestic violence will receive $24 million over four years.
More than $35 million in additional funding over four years will support Aboriginal and Torres Strait Islander people in the ACT. This includes reducing the over-representation of Aboriginal and Torres Strait Islander people in the ACT criminal justice system ($11.5 million); continuing Winnunga Nimmityjah Aboriginal Health and Community Service’s holistic model of health service delivery at the Alexander Maconochie Centre ($9.4 million); establishing an independent Aboriginal and Torres Strait Islander Children’s Commissioner ($3.6 million); an alcohol and other drug residential rehabilitation facility in Watson ($3 million); culturally appropriate responses to domestic and family violence ($1.9 million); consultation to implement all recommendations in the Sexual Assault Prevention and Response Program Report ($935,000): and promoting Ngunnawal culture and language in schools ($600,000).
Emergency services will receive $60 million of additional funding over four years. The major items are a more patient-centric ambulance service ($30.6 million); a new ambulance and fire and rescue station in the Molonglo Valley ($24 million).
To continue and strengthen justice system reforms and human rights, $35 million will be spent on new initiatives, including supporting the ACT’s community-based legal assistance sector, establishing a new Aboriginal and Torres Strait Islander care and protection legal advocacy service, providing more resources to Legal Aid, and continuing Criminal Case Conferencing in the ACT Supreme Court.
Environment, climate, and transport
$100 million of new funding will be spent on the environment and climate.
Transport network improvements will receive more than $25 million over four years. This includes upgrading five intersections ($7.6 million); upgrading key sections of Boboyan Road ($6.7 million); improving road safety and promoting active travel, in partnership with the Commonwealth Government ($6.2 million); and replacing three timber bridges in Umbagong District Park, and continuing active travel programs for children ($4.3 million).
More than $10 million of funding over four years will protect and restore the ACT environment and strengthen Canberrans’ connection to nature. The biggest item is setting up an Office of Water ($4.2 million), but $3 million will be spent to improve ecological connectivity and nature-based wellbeing; $2.3 million to reduce bushfire risk; $1.1 million to build a new visitor centre at Tidbinbilla Nature Reserve; and the Invasive Species Rapid Response Biosecurity Team will receive $250,000.
Jobs, sports, arts, culture, and entertainment
More than $130 million will be spent on new initiatives for community infrastructure, venues, and arts and culture. This brings funding for community infrastructure to more than $420 million in 2022–23, and for tourism, sport, events, and the arts to more than $165 million.
More than $55 million will be provided over four years for community infrastructure. This includes a water retardation basin at Narrabundah playing fields ($11.8 million); public pools ($11.1 million); a new 10-court tennis facility in Amaroo ($9.9 million); upgrading libraries, community centres, and other ACT Government buildings ($8 million); and a destination play space in the inner north ($2.6 million).
Arts and culture will receive $75 million of additional funding, to plan the expansion and redevelopment of Canberra Theatre Centre ($62 million); heritage restorations and critical building upgrades at Gorman House Arts Centre ($8 million); more funding for the ACT Arts Fund and the Belconnen, Ainslie, and Gorman Arts Centres ($3.1 million); and for the 25th Anniversary National Multicultural Festival ($2.7 million).
Response to Liberals audit
Yesterday, the Canberra Liberals called for an independent audit of the ACT’s finances, professing horror at the city’s spiralling debt.
Mr Bar explained that the ACT debt finances much of its infrastructure, while land sales provide the rest.
“It is appropriate to borrow in order to build those assets; the users of those assets over the decades, and sometimes centuries ahead, will make a contribution to that cost over time.”
