The ACT Government’s debt is spiralling out of control, the Canberra Liberals say, and they want an independent budget audit of the Territory’s finances by the end of this year.
Party leader Elizabeth Lee MLA will move in today’s Legislative Assembly for a “warts-and-all look” at the long-term viability of the ACT’s finances, and a recommendation of how to fix the debt and return to surplus.
Ever since Chief Minister Andrew Barr had been Treasurer, Ms Lee claimed, the budget had gone backwards. Net debt grew from negative $736 million to $5.36 billion in 2022, and was forecast to be more than $9 billion by 2024-25, she said. The budget had been in deficit every year since 2012–13, Ms Lee said, despite Mr Barr repeatedly promising to return the budget to surplus.
“This is not a sustainable financial position for the Territory,” she said.
In 2020, Ms Lee noted, ACT Treasury advised Mr Barr that if there was no long-term plan to bring the budget back into the black, the ACT’s credit rating would suffer. (The ACT is the only subnational jurisdiction in the Asia Pacific region with an AAA credit rating.)
“The Treasurer’s mismanagement of the Territory’s finances will impose enormous costs on future generations of Canberrans,” Ms Lee said.
In its 20 years of power, the Labor-Greens government had mismanaged health, education, and public housing, she said.
“What that means on the ground … has been that many Canberrans are getting a raw deal…
“What do we get for it? Less frontline staff in our police, in our hospitals, in our schools.”
She accused the ACT Government of “spin”, of announcements but no delivery, and of producing “opaque” budgets.
“Each budget, they change the outlook classes, they change the measures so that they’re pulling the wool over the eyes of the public on actually getting an insight into what’s promised and what’s delivered.”
For instance, the ACT Government allocated $699 million to public housing renewal across three budget periods from 2015–18, but only $80.87 million was appropriated through to 2020, the Liberals said last week.
In last year’s budget, Mr Barr announced a $5 billion pipeline would be the largest infrastructure program in the ACT’s history. By the Liberals’ reckoning, it was only a 4 per cent increase on what was promised the year before; the Infrastructure Investment Program encompassed $914 million in 2020–21 and $4.3 billion over the four years to 2023–24. The government, Ms Lee said, had spread the numbers across five years, and added an extra year to make it look “bigger and better” on a four-year basis. Meanwhile, there was a $250 million underspend in infrastructure.
- ACT Budget: Canberra Liberals (7 October 2021)
- ‘Full throttle’: Turbo-charged Budget will get Canberra’s economy moving again (6 October 2021)
The Canberra Hospital expansion was first promised a decade ago. (In 2016, the completion date was this year; now, the government expects it will be completed by 2024.)
“Since then, what we have seen is an announcement all glitzy and glamorous as they always do, and then it gets rescoped, it gets delayed… Every single budget, there is some promise.”
Other states and territories had commissioned audits (Queensland in 2011, NSW in 2012), independent reviews of state finances (Victoria in 2011), and budget repair plans (the Northern Territory in 2019), Ms Lee noted.
Mr Barr dismissed Ms Lee’s proposed audit as “sheer folly”. It was, he said, “an exercise in identifying ways to cut the public sector and to gut the public sector”, as had happened in Queensland, NSW, and Victoria.
“At least the Canberra Liberals are being honest in their fiscal approach that they favour reducing public expenditure, not building infrastructure, and sacking public servants. That’s what commissions of audit are used for – and we’ve seen it time and time again,” he said.
Without debt, Mr Barr said, the ACT would not be able to build infrastructure projects like the proposed Canberra Hospital expansion.
“So what Elizabeth Lee is arguing is that we shouldn’t be investing in Canberra’s health infrastructure, we shouldn’t be building new schools in growth areas, we shouldn’t be investing in our health workforce, because that is the outcome of her preferred policy.
“What they are arguing is that, at this point in the pandemic and at this point in the Territory’s history, what’s needed is less investment, fewer public servants, and by virtue of that, fewer services delivered to Canberrans.”
That, Ms Lee retorted, was a typical response from the Chief Minister, because she had called him out for his failures as Treasurer of this Territory over the last decade.
“If he had done his homework properly, he would realise that almost every other jurisdiction has undertaken this step … because it is about prudent financial management…
“If the Chief Minister and Treasurer is actually serious about getting the Territory’s finances back into the black, then he must be open to this step.”
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