15 August 2006

The ACT's record budget surplus

| johnboy
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With the Government announcing tough medicine for all those it doesn’t consider priorities (as opposed to bus-ways saving 2 minutes off a 14 minute trip), the Canberra Times has a story on the budget bottom line:

The ACT Government reaped a surplus of $176.2 million last financial year, the largest ever recorded.

Tough medicine is still needed however to build a “rock-solid foundation for the future”.

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Caf, according to the ACT Govt’s budget papers, we’re the last.

DT, I thought we were one of the first jurisdictions to abandon AAS?

Markus, I had read the hard copy article. You’d have to admit the headline, and the “shock result” angle is misleading. Plus, although you allude to the reality behind the numbers in the 7th par, you don’t explain it properly until the 11th. And even then you don’t point out the significance of the different accounting systems.

In reality, there is no story – it’s simply that according to one inadequate accounting system you get a large surplus, but according to a more realistic one you get a deficit. Not as sexy as “schools closing, rates up – but record surplus!”

That makes about a $266M turnaround by my estimates, being as they originally projected a $90M debt.

I would like to get a hold of Standope’s accountant next year for my tax return.

What a sham

Shouldn’t profits on superannuation be ploughed back into making the ACTGOV super liability sustainable in the long term ??

You’re back just in time, Kerces, Markus is visiting … time to get nude!

DT, the article that appeared on the web site was cropped. The issues you raised were reported in the newspaper.

barking toad2:50 pm 15 Aug 06

Probably old tricks like capitalising current expenditure and treating capital receipts as current income to produce a surplus on paper.

Just wish he’d piss off and join the BBC or the UN where he could bleat about his social issues to like minded bleeding hearts instead of using the mayoral platform whilst fucking up the local economy.

DT is right about the accounting systems. The old one also counts the one-off lump sums such as from land sales (which obviously can’t be earned again in future years) in the surplus. I feel certain there was a press release with the budget pack explaining about this and that we came in with a big surplus this year under the old system but either only just deficit or only just surplus under the new one.

(Hi I’m back…)

Why on earth would they have ever included things like super gains as profit for budgeting purposes ? Who thought of that one way back when…

I’m no economist, but this surplus is calculated on the basis of the old Australian Accounting Standards, which the ACT Government is no longer using after this budget. The problem with AAS is that it includes such things as stock market gains on superannuation investments in calculating operating revenues.

So if super does well, even though you can’t access it, it records a surplus. Under the new standards, used everywhere else in Australia (Government Financial Statistics), you get a much clearer view of what the financial situation really is.

A complicated issue which is hard to explain in a news article, but bad reporting from Mannheim.

minor point – Hiroshima and Nagasaki weren’t ‘scorched earth’ policies.

The Russian retreat against the Germans in WW2 was though

“to build a “rock-solid foundation for the future””.

Yep, a scorched earth policy usually leaves a rock solid foundation to rebuild on for the future: it certainly worked for Hiroshima and Nagasaki!

Yay, thank you Mr Stanhope!

Just remember that this is the same government that has stated that they don’t have any money.

What a load of shit.

Perhaps now they can get rid of paid parking at the hospitals, bitching about the teachers EBA, rate rises and stop trying to shaft communities by closing schools.

I guess the emabssies really won’t pay now, since the gov can’t whine they have no money and need it.

Of coure now there is a surplus, I can expect next years rates to decrease.

the answer to those questions is obvious Thumper. its all so we can report a record surplus

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