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ACT Budget 2016-17 at a glance

By Charlotte Harper - 7 June 2016 20

ACT Budget

• A forecast return to balanced budgets in 2017-18 and 2018-19 with surpluses from 2019-20 onwards

• Budget position improved by $250 million in 2015-16

• Debt consistent with retaining a AAA credit rating

• Residential rates to rise by 4.5 per cent in 2016-17 and 7 per cent per year on average for the following five years

• Unit rates to rise by on average $150 in 2016-17 and a further $115 in 2017-18 as part of a one-off restructure of the way unit rates are calculated

• Commercial rates to rise by 7 per cent, and thereafter around 6 per cent per year

• New annual $30 Safer Families Levy for all ACT property owners to fund major family violence prevention program

• Increase of around $10 to the Victims Services Levy in 2016-17 with a further rise of around $10 the following financial year

• Increase of around $10 to the Fire and Emergency Services Levy

• Increase of $5 for individuals and $10 for families of the Ambulance Levy from January 1, 2017

• Discount for early payment of rates in full reduced from 3 per cent to 2 per cent

• Drivers licence fees to rise by 5 per cent in 2016-17, with the safe driver discount increased from 20 per cent to 25 per cent

• Duty on insurance premiums abolished (previously 10 per cent of all general insurance premiums and 5 per cent of life insurance premiums).

• Payroll tax threshold increased from $1.85 million to $2 million

• Conveyancing duty rates cut further

The Government made several announcements about major funding commitments in health ($1.6 billion), education ($1.16 billion), sporting facilities ($40 million), tourism ($7.3 million), roads ($100 million+), transport ($70 million), policing ($3.1 million towards improved security measures) and municipal services (including the green bins pilot) in the lead-up to the Budget.

It has also made commitments today for Aboriginal and Torres Strait Islander people ($2.3 million), disability services ($120 million), in emergency services ($9.3 million in new funding), for road safety ($7.1 million), in correctional services ($13 million) and for the environment ($18 million).

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20 Responses to
ACT Budget 2016-17 at a glance
JC 6:59 pm 08 Jun 16

Mysteryman said :

Brad Harris said :

What tram debt? The government is NOT the one (directly) carrying the cost of the light rail and hence debt, it is the PPP partner. The cost to government and hence the budget, which is your concern…….

You know what wildturkeycanoe is talking about – its the payments each year for the next 20 years to the tram consortia for the tram & 12 Ks of track. Saying that those payments to the tram consortia are not a “debt”, is just obfuscation of the the issue.

It’s a liability – which is to be met by the ACT Gov’t/Ratepayers under the contract and will be shown as such in the ACT Govt’s Annual Financial Statement. So, a debt by another name. But same thing.

Yeah, but the debt is not carried by the budget. It makes all the difference. What looks like a massive headline figure of almost $1b, looks reasonable when presented on the budget papers, which is the way it is paid for is it not?

As a percentage of the total budget the $64m averaged repayments represent about 1% of all expenditure. And of course as the years go as a percentage of budget that figure will improve..

rommeldog56 2:55 pm 08 Jun 16

Brad Harris said :

What tram debt? The government is NOT the one (directly) carrying the cost of the light rail and hence debt, it is the PPP partner. The cost to government and hence the budget, which is your concern…….

You know what wildturkeycanoe is talking about – its the payments each year for the next 20 years to the tram consortia for the tram & 12 Ks of track. Saying that those payments to the tram consortia are not a “debt”, is just obfuscation of the the issue.

It’s a liability – which is to be met by the ACT Gov’t/Ratepayers under the contract and will be shown as such in the ACT Govt’s Annual Financial Statement. So, a debt by another name. But same thing.

I am a Rabbit™ 1:28 pm 08 Jun 16

rommeldog56 said :

But the ACT Labor/Greens Gov’t WILL be voted back later this year. So it’s not of concern to the majority of ACT Ratepayers/Voters – apparently.

The increase of rates and/or introduction of new levies is obviously important to people in the ACT… Thankfully most people aren’t single-issue voters, and won’t do a protest vote based on rates/levies alone. I don’t think anyone can deny that the current government is doing an awful job, but the potential of damage that a liberal-led state government could do is massive. You need not look further than NSW, WA and VIC to realise how much damage they could do in a single term.

PS: The liberals don’t cut spending at a state-level. They transfer as many public assets into private pockets (at a pittance) as they can get their hands on, and then use the profits to make the books look viable. You have to be an economic illiterate to vote liberal at a state level.

dungfungus 11:57 am 08 Jun 16

MonarchRepublic said :

dungfungus said :

A quote from an ACT Treasury Dept. report:
The defined benefit superannuation liability is estimated to grow to approximately
$6.147 billion by 30 June 2017.”
No mention of this in the budget papers?

Hi @dungfungus, this is what our guest economist Cherelle Murphy wrote about that in her main piece (http://the-riotact.com/economy-prudent-management-boost-act-budget/178433) yesterday:

In 2016-17, the deficit projection of $181 million represents a $59.3 million deterioration compared to the last Budget estimate because the government has pre-empted an upcoming $87.7 million hit from lower interest rates (when government bond yields fall, as they are now, the Government’s superannuation liability rises). Without this provision, the headline net operating deficit would have been a much better $94.4 million. It also conveniently allows the Government to avoid that liability showing up, for the first time, in the pre-election fiscal outlook document: never a good look during an election campaign. Broadly balanced budgets are expected for 2017-18 and 2018-19 and a $66 million surplus is projected in 2019-20.

Thanks for that Charlotte – I missed it entirely, probably because I was looking for the billions rather than the millions.

JC 11:13 am 08 Jun 16

gooterz said :

“A forecast return to balanced budgets in 2017-18 and 2018-19 with surpluses from 2019-20 onwards”
Where are they getting the dollars to pay off the tram debt? I don’t think these rates and levies are going to cover it.
I guess the $150 per year rate increase will go part of the way, unless people start moving out because of the high cost of living in Canberra.

What tram debt? The government is NOT the one (directly) carrying the cost of the light rail and hence debt, it is the PPP partner. The cost to government and hence the budget, which is your concern is the one off payment on completion of the line and the $48m p/a, which when indexed and then averaged over 20 years is closer to $64m in 2016 terms.

rommeldog56 10:46 am 08 Jun 16

rommeldog56 said :

It is interesting that in a climate of low inflation, it is not the private sector driving up living costs, it is our government. You look at the constant large increases the act government are inflicting on us and it certainly ahead of inflation. Where does the government think we are getting the money to just keep increasing our living costs? Wage rises – not likely

But the ACT Labor/Greens Gov’t WILL be voted back later this year. So it’s not of concern to the majority of ACT Ratepayers/Voters – apparently.

Charlotte Harper 10:40 am 08 Jun 16

dungfungus said :

A quote from an ACT Treasury Dept. report:
The defined benefit superannuation liability is estimated to grow to approximately
$6.147 billion by 30 June 2017.”
No mention of this in the budget papers?

Hi @dungfungus, this is what our guest economist Cherelle Murphy wrote about that in her main piece (http://the-riotact.com/economy-prudent-management-boost-act-budget/178433) yesterday:

In 2016-17, the deficit projection of $181 million represents a $59.3 million deterioration compared to the last Budget estimate because the government has pre-empted an upcoming $87.7 million hit from lower interest rates (when government bond yields fall, as they are now, the Government’s superannuation liability rises). Without this provision, the headline net operating deficit would have been a much better $94.4 million. It also conveniently allows the Government to avoid that liability showing up, for the first time, in the pre-election fiscal outlook document: never a good look during an election campaign. Broadly balanced budgets are expected for 2017-18 and 2018-19 and a $66 million surplus is projected in 2019-20.

Charlotte Harper 10:38 am 08 Jun 16

Affirmative Action Man said :

“Duty on insurance premiums abolished (previously 10 per cent of all general insurance premiums and 5 per cent of life insurance premiums)”

Does this mean I can expect a reduction on my car insurance and contents insurance?

Yes, they should both become 10pc cheaper.

dungfungus 10:04 am 08 Jun 16

A quote from an ACT Treasury Dept. report:
The defined benefit superannuation liability is estimated to grow to approximately
$6.147 billion by 30 June 2017.”
No mention of this in the budget papers?

justonevoice 8:54 am 08 Jun 16

It is interesting that in a climate of low inflation, it is not the private sector driving up living costs, it is our government. You look at the constant large increases the act government are inflicting on us and it certainly ahead of inflation. Where does the government think we are getting the money to just keep increasing our living costs? Wage rises – not likely

wildturkeycanoe 7:26 am 08 Jun 16

“A forecast return to balanced budgets in 2017-18 and 2018-19 with surpluses from 2019-20 onwards”
Where are they getting the dollars to pay off the tram debt? I don’t think these rates and levies are going to cover it.
I guess the $150 per year rate increase will go part of the way, unless people start moving out because of the high cost of living in Canberra.

rommeldog56 11:00 pm 07 Jun 16

Roundhead89 said :

Well, as someone who bought an old unit 2 years ago, I got to pay full stamp duty, didn’t get any homebuyers grant, immediately had my rates increase 7% and looks like about 20% increase in coming years. Good thing I haven’t had a pay rise in 2 years otherwise it would be worrying . . .

Haha…….you gotta laugh I suppose. What else can u do ?

dungfungus 10:27 pm 07 Jun 16

Roundhead89 said :

Well, as someone who bought an old unit 2 years ago, I got to pay full stamp duty, didn’t get any homebuyers grant, immediately had my rates increase 7% and looks like about 20% increase in coming years. Good thing I haven’t had a pay rise in 2 years otherwise it would be worrying . . .

Does the unit leak when it rains?

mr_wowtrousers 10:14 pm 07 Jun 16

Well, as someone who bought an old unit 2 years ago, I got to pay full stamp duty, didn’t get any homebuyers grant, immediately had my rates increase 7% and looks like about 20% increase in coming years. Good thing I haven’t had a pay rise in 2 years otherwise it would be worrying . . .

Mordd 7:37 pm 07 Jun 16

“Duty on insurance premiums abolished (previously 10 per cent of all general insurance premiums and 5 per cent of life insurance premiums)”

Does this mean I can expect a reduction on my car insurance and contents insurance?

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