Andrew Barr is having a celebratory crow about the performance of the ACT’s economy as recorded by a recent Commsec report.
The report found that:
• The ACT has Australia’s third highest economic growth, at 19.7% above the decade-long average, and behind only WA and NT, which both have large mining and resources sector investment projects.
• The ACT has the second highest population growth, at 1.79% per year, which is 24.7% above the decade-long average, and behind only WA.
• The ACT is the only state and territory to record housing finance commitments above the decade average. In the ACT the number of housing finance commitments is 5.0% above the decade-average and 4.4% higher than a year ago.
• The ACT is in the strongest position for new housing construction. In the March quarter the number of dwellings started was up 12.9% on the decade average.
• The ACT has the lowest jobless rate in the nation, at 3.6%.
• The ACT had the strongest growth in capital city home prices, up 1.3% on a year ago.
• In the ACT wages growth was 3.3%, with consumer prices rising 1.6%.
Which is all jolly good news.
So why is the ACT Government spending money it does not have, which will have to be repaid in a future quite possibly not as economically rosy, in these best of all possible times?
Treasurer Barr in his budget speech said he was stealing from the future to stimulate the economy:
This Budget is stimulatory. It protects activity and confidence, but it will not seek to expand unsustainably or carelessly. It will maintain activity.
One can’t help thinking there will be a grim reckoning after the election.
UPDATE 23/07/12 10:57: Treasurer Barr has tweeted this response back:
CommSec is a rear mirror view of relative economic performance. We have been performing well but the drivers of that growth are slowing.
The ACT Budget settings aim to keep the economy growing in a period of Commonwealth Government contraction.
In the long run, the federal spend will return to more “normal” levels. We were boosted by the stimulus spending and housing construction.
Overall the ACT economy tends to be counter-cyclical to the national economy. This is due to the strong influence of Federal spending.