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ACT economy ‘back in the black’ but challenges loom

By Tim Benson 6 June 2018 18
Where our money goes (ACT Government graphic).

Where our money went in 2017-18. ACT Government graphic.

First things first: It’s time to abolish the archaic practice of the budget lock up. This is the antiquated practice of confining journalists to a space for hours, with thousands of pages of budget-related material to digest prior to it being presented to the Assembly by the Chief Minister, Andrew Barr.

Draft guidelines for the ‘lockup’ included: no wifi and no broadcasting etc. But hey, folks, we all had our mobile phones, cellular watches, laptops etc. and were even encouraged to visit government websites to access documents …

So please, spare us this nonsense next year and do away with the ‘ACT Budget lockup’. Just give us the documents and enforce an embargo till 3 pm.

Although the sandwiches and coffee were pretty good – and the access to senior public servants was excellent – and the time spent mulling over how our ACT $5 billion economy is being run, was well spent.

For me, the highlight of the 2018-19 Budget was that Chief Minister Andrew Barr kept his tinder dry leading up to the budget. As opposed to the entire rest of the budget being announced by his Ministers in a veritable tsunami of announcements.

So, let’s start with the biggie:

Abolition of stamp duty for first home buyers

  • Announced in the 2018-19 Budget but not coming into effect until 1 July 2019 ie the 2019–20 is the abolition of stamp duty for first home buyers.

Now this is a biggie, but don’t get too excited, it will be capped to first home buyers with a maximum household income of $160,0000 and the un-means tested $7,000 First Home buyers Grant will be abolished at the same time.

Cynically, I thought this might be a saving, but there is an actual cost to the budget of around $1.3 million dollars.

The Chief Minister said in his budget speech that “by 2021-22, someone buying a $500,000 house would be paying off half the amount of stamp duty they would have been up for when we started this reform – a saving of $10,500.”

But digging further, the median house price is actually $530,000 and the estimated stamp duty saving would be $12,696 … but of course, the average house price is around $650,000.

We are currently seven years into the ACT Government’s 20-year plan to abolish stamp duty for all and modernize our revenue base.

No other state or territory is following the ACT Government’s brave lead in this regard. Of course, that is because rates and stamp duty are split between state and local governments and it’s all a bit hard to sort out – but no problem here in the ACT.

Where our money comes from (ACT Government graphic).

Where our money came from in 2017/18. ACT Government graphic.

Other highlights in 2017-18 included:

  • $5.4 billion economy returned to surplus – $31.9 or 0.59%;
  • Surplus after 5 years of deficit;
  • ACT Economy grew at 4.6%;
  • ACT maintains a AAA credit rating (only one of three states and territories to do so);
  • Tertiary education exports grew by over 24.4% to $750 million;
  • Construction of private dwellings grew by 25%;
  • Employment growth was 2.7% or 6,000 jobs;
  • Unemployment sits at 3.7%;
  • 3,200 jobs created (80% full-time);
  • Fastest growing economy of any state or territory; and
  • Larger economy than Tasmania and the Northern Territory and forecast to be larger than South Australia.

For each Canberra household, on average the Government spends... (ACT Government graphic).

Most of the other initiatives in the ACT Budget 2018–19 were already announced prior to the ACT Budget and include:

Health:

  • $443 million in new investments
  • Building on $1.6 billion spent each year

Schools:

  • $210 million new money in local schools
  • Building on $1.2 billion spent each year

Mowing, weeding and cleaning up graffiti:

  • $8 million landscaping, infrastructure and traffic improvements to the Tuggeranong, Kambah and Gungahlin centres

Community and Public Housing:

  • Continue $608 million public housing renewal program
  • 72 more properties in 2017-2018
  • $1 million to strengthen and expand homelessness services
  • $10.1 million to strengthen frontline teams within the Child and Youth Protection Service
  • $33.7 million to support children and young people who cannot live in their family homes

Further facts, figures, media releases, budget papers and facts can be found at the ACT Government Chief Minister, Treasury and Economic Development website.

What does this year’s ACT Budget mean from a business, investment and property perspective?

What does this year’s ACT Budget mean from a business, investment and property perspective? The RiotACT came to you LIVE from the National Press Club of Australia to bring you reaction and analysis from three Canberra experts. Robyn Hendry of Canberra Business Chamber, Archie Tsirimokos from Meyer Vandenberg Lawyers and Andrew Sykes from RSM Australia shared their responses to the key Budget issues and what the new measures mean for business in the ACT.

Posted by The RiotACT on Tuesday, 5 June 2018

Prelude:

I have to say that the Barr Government is a smooth machine that rolled out the pre-budget like seasoned professionals.

There are of course serious issues that are facing the ACT in coming years and these all relate to ‘growth’.

My colleague and I debated the word of this year in the ACT Budget. He said the word was ‘balance’. I said it was ‘growth’.

‘Growth’ and ‘growing’ is all over the budget papers, speech and media releases.

Whilst the Chief Minister, Andrew Barr, highlighted ‘balance’ in terms of the economy.

But it is ‘growth’ that is both the engine that is driving our stunning economic figures and leading to many headaches in terms of how we continue to deliver the high levels of services that we have become accustomed to and demand in the ACT.

What mark do you give the ACT Government out of 10 for their managing of the ACT economy and why?


2018-19 ACT Budget

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18 Responses to
ACT economy ‘back in the black’ but challenges loom
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Capital Retro 9:20 am 08 Jun 18

It’s not only the increase in electricity costs that Canberrans on fixed incomes have to contend with, it’s also savage rate increases and increases of motor vehicle registration fees (and all the quirky add-ons to that billing system).

These are costs that cannot be avoided. Bread and dripping is now a meal option.

Roger Mungummary 10:23 pm 07 Jun 18

How do they imagine pensioners whose pensions have not increased for ever are going to manage an extra $300 per year for power? On top of massive rate hikes!

Nylex 7:22 pm 07 Jun 18

You don’t seem to have reported on what’s happening with the ACT government’s annual $15million spend on “communications” staff.
It’s probably gone up 10% to $16.5million I guess….

    Capital Retro 9:57 am 08 Jun 18

    Does anyone know how much has been spent on the Arboretum and the Glassworks which were both pet projects of a past Chief Minister?

Tim Cole 12:39 am 07 Jun 18

Poorly. They continue to spend more than they receive then jack up the rates to cover the shortfall.

Wing Nut 8:59 pm 06 Jun 18

Depends how you define growth. The growth Canberra is experiencing is not actually any sort of orderly growth, it’s a population crush. Services and infrastructure are stretched and the cost of service delivery is rapidly escalating while government, of whatever shade, will always be behind the the curve. For example, there will be an extra $122m for 4000 procedures……over four years. Considering there are 5000 people already on the waiting list then add in an expected population growth of approximately 6000 people per year, that extra money will hardly put a dent in the wait list. The rapid growth Canberra is experiencing is not good regardless of how the Barr Government would like to sell it.

Michael Groenhout 8:52 pm 06 Jun 18
Stan Vizovitis 6:28 pm 06 Jun 18

Poor

John Moulis 2:51 pm 06 Jun 18

Did anybody see that cool $1.9 million for the retrial of David Eastman? Can’t anything be done to stop this massive waste of money? Isn’t there a statute of limitations? Are any of the witnesses still alive?

    bigred 7:08 am 07 Jun 18

    In terms of entertainment value, I expect the re trial will provide us with significant media commentary most days on challenges to the evidence, legal tactics and the current life status of the current players. I also wonder how long it will be before Eastman has one of his infamous brain snaps in the public court room. If I am having a quiet day I might pop into the public gallery to watch justice at work.

    Nylex 7:25 pm 07 Jun 18

    Agreed, it should be entertaining seeing the ACTDPP trying to re-prosecute a case they won on flimsy evidence now that that evidence has almost all been struck out as having been nonsense from the start.

    I’m with you, John, this is an appalling abuse – the people who stitched him up in the first place have faced no consequences for their actions.

    Capital Retro 8:23 pm 07 Jun 18

    It may be hard for the prosecution to explain what a senior member of the judiciary said after the last decision regarding Eastman’s conviction:
    http://www.abc.net.au/news/2014-08-22/decision-on-eastman-murder-conviction/5687440

bj_ACT 12:57 pm 06 Jun 18

I noticed in the Budget in your region info that Tuggeranong only received a few dollars for upgrading paths and grass around Lake Tuggeranong.

Once again all the new funding, new infrastructure and improved amenities were targeted at Mr Barr’s, Ms Berry’s and Minister Fitzharris’ Electorates.

    JC 3:28 am 07 Jun 18

    You mean where the new suburbs and growth area are? Might have something to do with it rather than this conspiracy theory about hard done by tuggeronong who received a disproportionate share when it was the growth area of Canberra. But of course no Andrew Barr to blame back then, and for much of Tuggeranongs intial growth period no self government.

    Capital Retro 7:48 am 07 Jun 18

    Good point and it might wake up a few Tuggeranong voters to the fact while they continue to vote for the hapless Liberals this situation will continue.

    Nylex 7:27 pm 07 Jun 18

    Well, his target demographic doesn’t live in Tuggeranong, and what’s more I think he has something added to the aircon systems in the all the white Commodores down there that makes them keep voting Labor despite the lack of good it does them.

    Capital Retro 8:27 pm 07 Jun 18

    I may start a movement for Tuggeranong to secede from the the ACT. There are only a few roads in and out – it would be ideal.

    We are already about as self-sufficient as a region can be and we certainly don’t need a tram to take us to (ugh!) Gungahlin.

Paul Chubb 12:50 pm 06 Jun 18

Riding the tiger...

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