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ACT Budget heads $200 million in the hole

By johnboy 6 March 2009 26

It was a weird thing at the last election. In our candidate questionaire (which many candidates lacked the intestinal fortitude to reply to) we asked this question:

    1) What will be your number 1 spending priority, and what are you willing to de-fund in order to pay for it?

I was appalled that most candidates didn’t seem able comprehend the basic concept that when the good times end they’ll have to choose which spending items they can continue, rather than the last decade of the only choice being where extra funding goes.

Today the Canberra Times reports that the ACT Government is now looking at a $200 million deficit.

    “Mr Stanhope told a Legislative Assembly committee that the May budget figures would reflect the toll the global financial crisis was having on the territory’s bottom line.

    ”That reflects reduced GST, reduced stamp duty, reduced conveyancing duty, reduced [Land Development Agency] dividend, reduced returns on superannuation, and combined it represents at this stage an estimate somewhere in the order of $200million,” he said.”

(Note: That number is an extrapolation of current trends not a hard figure.)

At some point, soon, they’re going to have to start cutting instead of racking up debt.

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26 Responses to
ACT Budget heads $200 million in the hole
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vg 9:57 pm 09 Mar 09

Stanhope is only following a long held Labor tradition of spending every budget surplus ever left behind by an outgoing Liberal government, be that State/Territory or National.

Maybe he’ll ‘accidentally’ say ‘sh*tstorm’ on CM’s talkback just to sound like a ‘real bloke’, like good old Kev07. Kevvy, you’re a nerd. We can live with that. Just stop acting like something you ain’t

miz 6:55 pm 09 Mar 09

Last time they thought they were broke, they closed a heap of schools. (Then lo and behold, they were not in deficit and closed them all for nought). This time, what are they gonna do?

ant 9:02 am 07 Mar 09

I cannot make sense of Kods’ “argument” at all. I have worked in the budgets areas of Federal and NSW government. I’m speaking about facts as they exist, not speculating as he/she appears to be doing.

Fact is, the federal government runs a sensible budgetting system across its various entities, it requires its departments to plan and spend in a transparent and responsible manner, and gives its departments the tools to do this.

The NSW State government does none of this. Which is why it is broke. There’s a story in teh SMH today highlighting a result of this. Expect to read many more.

I hope the ACT gov’t runs a system similar to the commonwealth one, or else prepare to get worried.

taco 8:37 pm 06 Mar 09

Caf, I agree in principle that governments should try and avoid slashing and burning their expenditure during recessions, but there is productive spending and non productive spending.

I would go more the route that AG Canberra mentions, but use the money that is freed up to invest in something grand that will provide economic benefits once the good times come around again – like dramatic improvements to public transport (light rail or otherwise), buying transact and doing their network rollout properly like they planned a decade ago before ACTEW bought it and ballsed it up, building goverment owned wind or solar farms – I am sure there are a bunch of projects that people could think of that are better for the community than a million dollars here for mostly pointless arts projects, $400k there for the next pointless “drive N text U B next” signs, millions of dollars on poor quality resurfacing on roads that don’t need it and all the other government spending fat.

Governments that survive recessions by racking up a massive deficit with nothing to show for it leave a legacy of higher taxes that reduce the economy’s effectiveness well into the future, or at least that’s just my non-university educated opinion.

caf 4:43 pm 06 Mar 09

Oh and this thing about the $400k being for a “STUDY” rather than the signs themselves appears to be a line of prize bullsh|t. The budget papers just say its for additional “Road Saftey Message Signage”, nothing about a study. If you believe otherwise, provide a source.

caf 4:39 pm 06 Mar 09

That is exactly the wrong response. Don’t go anywhere near the levers of power, please.

The road safety sign funding was part of a package of measures specifically brought forward to this year – exactly the opposite to what you’re suggesting. The reason why is that if Governments reduce spending in depressed parts of the business cycle and spend up big in the boom times, it makes the cycles worse (bigger booms and crucially, bigger busts).

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