ACT 2010-11 Budget Overview

4th May 2010

On 4 May 2010, the Australian Capital Territory (ACT) Treasurer, the Hon. Katy Gallagher, delivered the Territory’s 2010-11 Budget.  The Budget is cautionary, with limited spending and substantial savings measures.  The Budget was delivered in the context of the ongoing effects of the global financial crisis and cuts to the ACT’s share of GST revenue.

The 2009-10 Budget is on track to deliver a $54.3 million surplus, and this is due to the Commonwealth Government’s stimulus spending. 
The Budget will remain in deficit over the forward estimates.  The Government intends to return the Budget to surplus in 2013-14, two years earlier ahead of previous projections.

 
2010-11
$’m
2011-12
$’m
2012-13
$’m
2013-14
$’m
Net Operating Balance
-83.9
-135.8
-95.5
-50.3
Less: Impact of Stimulus Activities
-88.8
-16.2
-2.0
0.0
Underlying Net Operating Balance
-172.7
-152.0
-97.5
-50.3

Note: This table may not add due to rounding.
Although the Australian economy has recovered well from the global recession, the ACT economy is not expected to return to normal levels of growth over the forward estimates. Gross State Product is forecast at 2 per cent in 2010-11, and 3 ¼ per cent in 2011-12 and 2012-13.
Unemployment has remained at 3.8 per cent over the last eighteen months, among the lowest in the country.
There has been an overall increase in the national GST pool of $47.7 billion, or 7.3 per cent, however, the ACT’s share has decreased from 2.04 per cent to 1.85 per cent of the total GST pool ( a decrease of $85 million) as a result of assessments by the Commonwealth Grants Commission .
Savings
 
The Government intends to achieve $140 million in savings over four years. These savings will be achieved through:
                    applying an efficiency dividend across government;
                    wages restraint;
                    a reduction of the provision for unforseen expenditure (Treasurer’s Advance); and
                    deferral of the street tree planting program.

Measures in the 2010-11 Budget
2010-11
$’m
2011-12
$’m
2012-13
$’m
2013-14
$’m
Wages Policy
17
25
35
35
Efficiency Dividend
18
18
19
20
Other Savings Measures
13
26
31
34
Total Measures in the 2010-11 Budget
48
70
86
89

Spending
The key areas of focus in the 2010-11 Budget are:
·         Infrastructure
·         Health
·         Transport
·         Education
·         Land release
·         Municipal and Community Services
·         Tourism
Infrastructure
The 2010-11 Budget provides for an Infrastructure Investment Program of $394 million over four years. This includes new capital works ($317.3 million), plant and equipment ($6.9 million) information and communications technology measures ($24.3 million) and capital upgrades ($45.2 million). 
Significant infrastructure investment commitments in the 2010-11 Budget include:
Borrowings of up to $450 million are included in the Budget to partially fund the infrastructure program.
Health
ACT Health’s operating Budget will grow to over $1 billion for the first time in 2010-11, a seven per cent increase in total health expenditure. An additional $41.5 million will be invested in health measures to meet the increasing demands on the Territory’s health care system. 
Transport
The Government will invest $97 million in transport.
Land Release Program
The 2010-11 Budget invests $13.9 million over four years to support the Accelerated Release of Land across the Territory. Over the next four years, the Land Release Program will deliver:
The Government will spend $70 million on a range of planning and infrastructure studies and new infrastructure works to support the Land Release Program.  
Education
An additional $59.5 million will be spent on education.
Climate change and sustainability
Capital works
Housing
Community services and safety
Tourism, culture and sport
Other areas
 Revenue Measures
Links
The ACT 2010-11 Budget is available online at www.treasury.act.gov.au/budget/budget_2010/index.htm
The ACT Treasurer’s Budget Speech is available at www.treasury.act.gov.au/budget/budget_2010/files/paper1/bpaper1.pdf.

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