The ACT faces a massive hit to its revenue and bottom line due to the COVID-19-induced economic downturn, Chief Minister Andrew Barr has told a Legislative Assembly committee.
Mr Barr said the government was expecting revenue from ACT sources such as payroll tax, rates and land sales to fall by at least 10 per cent. In total, own-source revenue is around $2 billion a year for the ACT Government.
However, Mr Barr said that the cumulative cost of all tax waivers and concessions related to coronavirus would be in the hundreds of millions of dollars.
By the end of February, own-source revenue had fallen 5 per cent but the March figures would not be available until late April or early May, Mr Barr said.
GST revenue from the Commonwealth had already been declining and Mr Barr said the coronavirus fallout would exacerbate this because of a collapse in national consumption across the Australian economy.
“It is anticipated [the GST] impact will be large and as that is the Territory’s single largest revenue source, that impact will be very significant on our Budget,” he said.
The only silver lining was the ACT’s strong public sector employment base.
But the private sector had been hit particularly hard, with a third of the ACT’s 30,000 businesses registering interest in the Commonwealth’s JobKeeper program.
”Not all will be eligible though, but that should give the committee a sense of the scale of the impact on the ACT,” he said.
Mr Barr flagged a local jobs program to be announced soon to plug the gaps in the Commonwealth’s response, including for some overseas visa holders left stranded by the crisis.
”It will endeavour to provide some casual, temporary and part-time employment opportunities for those who are not eligible for the range of Commonwealth support,” he said.
”Because we are the second-largest employer in the city with a diverse range of jobs, we think the opportunities that we have within the government, particularly in relation to short-term, temporary and part-time arrangements, will assist those groups.”
ACT Government support would depend on the type of visa and how much work the Commonwealth would allow them to do, ”but we do have some capacity to provide some work to those people”.
Mr Barr said the Federal Treasury had told National Cabinet to expect unemployment to double to 10 per cent, and that the downturn will be much greater than that experienced during the global financial crisis of 2008.
He said the International Monetary Fund was forecasting a 3 per cent global contraction in economic activity, compared with only 0.1 per cent during the GFC.
According to Treasury, without the JobKeeper wage subsidy program, unemployment would be 15 per cent. Around 860,000 businesses had already registered for it.
Treasury said 6.2 million Australians received the $750 emergency payments, and 840,000 had requested early access to their superannuation.
There were no ACT figures available yet.