Business investment and consumer spending are driving economic and fiscal recovery, said Chief Minister Andrew Barr, and the ACT’s economic recovery continues to show signs of progress, highlighted by an improved ACT Budget position released this week.
The December Quarter Headline Net Operating Balance (HNOB) for the ACT General Government Sector (GGS) was a deficit of only $218.8 million – significantly lower than the forecast year-to-date budget deficit of $464.3 million, Mr Barr said.
Mr Barr said the improvement of almost $250 million on the government’s initial forecast was driven by an increase in consumption revenue lines, linked with economic activity.
Total revenues were more than $230 million better than forecast. This includes an increase of $134 million in the projected GST revenue for the ACT.
Additionally, Mr Barr said, the government’s Territory taxation revenue improved by $86.2 million on the back of an improving labour market and increased commercial property market activity, reflecting strong business confidence to invest in the Territory.
Recent strong retail trade figures, strong credit card spending data, and an increase in the household savings rate, which will support greater private consumption, give reason to be cautiously optimistic about the year ahead, Mr Barr said.
The ACT Government will provide targeted economic support when and where it is needed, Mr Barr promised.
“We aren’t afraid to invest public finances to avoid the harsh realities recessionary environments can have on the economic prospects of young people and women,” Mr Barr said.
“By investing today to support the economy, we are avoiding an even bigger loss of economic output and jobs that would damage our economy and community for years to come, which would put a larger ongoing strain on our budget.”
Mr Barr said that included the ACT Government’s ongoing investment in what he termed the job-creating infrastructure projects that would make Canberra even better.
“The ACT’s $6.4 billion plan will deliver infrastructure that is built for Canberra, and built to support the city Canberrans want,” Mr Barr said.
“While the Canberra Liberals flip between regurgitating their reflex conservative political lines against public spending and debt on some days whilst calling for more Government intervention and assistance on others, we’re getting on with building solid economic foundations for the Territory to reach our target of 250,000 jobs by 2025, and continue the strong and sustainable economic diversification of our economy.
“It is the role of every government in Australia to create the environments to drive up aggregate demand. It requires us to be bold and take on more risk. Locally, that will mean that we will continue to create and shape markets to encourage job creation in emerging industries.
“Risks remain on the horizon, but the signs are positive for 2022.”
