ACT 2010-11 Budget Overview

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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:

the Transport for Canberra package ($90 million)
Official Opening 2013 – National Arboretum Canberra ($22.62 million)
Coombs – Water Quality Control Ponds ($17 million)
Narrabundah Ball Park Facility Upgrade ($1.05 million)
Tuggeranong Health Centre – Stage 2 ($14 million)
Integrated Cancer Care Centre – Phase 1 ($27.9 million)
Gungahlin – The Valley Ponds and Stormwater Harvesting Scheme ($6.5 million)
Red Hill Primary School Expansion ($5.3 million)
Flynn Childcare Centre ($4 million)

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.

$9.5 million over four years to support home and community health services.
Additional 800 elective surgery operations to be provided for in 2010-11.
$13 million over four years to speed up patient transfer from emergency.
$27.9 million for an integrated cancer care centre to be constructed and funded by the Commonwealth.
$25.9 million for the Women and Children’s hospital.
$15.9 million on an adult mental health facility.

Transport

The Government will invest $97 million in transport.

$8.2 million for bus priority lanes on Canberra Avenue
14.7 million for a third lane on Parkes Way.
$7.125 million upgrade Cotter Road for Molonglo development.
$4.25 million for bus priority and off road cycle lanes on Northbourne Avenue.
$4.5 million into upgrading paths and street lights for cycling and walking.
$1.35 million for point-to-point road safety cameras.

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:

17,000 residential dwelling sites in total, with 5,000 dwelling sites in 2010-11 and 2011-12, and 3,500 per annum thereafter (an increase of 33 per cent since the last budget);
110,000 square metres of commercial land per annum on average (an increase of 35 per cent since the last budget);
110,000 square metres of industrial land per annum on average (an increase of 8 per cent since the last budget); and
35,000 square metres of community and non-urban land per annum.

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.

$35.1 million into new Gungahlin College due to open in 2011.
$23 million for the new Kambah preschool – Year 10 facility.
$14.5 million over four years for staffing and school management in Territory’s new schools.
$1.6 million over four years for support for students with a disability in government schools.
$2 million for Harrison High School gymnasium.
$5.3 million for expansion of Red Hill Primary.
$5.2 million for design of three new schools in expanding regions of Canberra (Molonglo, Bonner, and Franklin).
$0.3 million for a feasibility study into a CIT learning Centre in Tuggeranong.

Climate change and sustainability

$17 million for water quality control ponds in Coombs.
$4.8 million over four years for implementation of a strategic bushfire management plan.
$2.6 million for emissions audit of ACT Government agencies toward carbon neutral ACT public service.

Capital works

$297.1 million for new construction works.
$18.9 million for feasibility and forward design projects.

Housing

$66 million allocated for infrastructure to support accelerated release of land.
33 per cent increase for land release program between 2010-11 and 2013-14.
$13.9 million over four years to support accelerated release of land, particularly in areas like Molonglo and Gungahlin.

Community services and safety

$14.2 million for a new police station in Belconnen.
$13.7 million to establish new emergency services headquarters.
$5.2 million for a forensic medical centre in Phillip.
$6.3 million over four years for liquor reforms.
$5.7 million for support for children in out of home care.

Tourism, culture and sport

$15.6 million for ACT spor.t
$4.2 million for Lyneham’s Southwell Park redevelopment.
$2.9 million over four years for Gungahlin library .
$1.9 million over four years for Floriade.

Other areas

$5.1 million for 11 new positions in the ACT Ambulance service, nine of which are in the communications centre .
$2.6 million to improve Supreme Court efficiency .
$1 million for a trial of bulky household waste collection for pensioners and concession card holders.

Revenue Measures

Change of Use fee increase – $68 million over four years in revenue as the Government will receive a return from the grant of additional development rights to leaseholders, through requiring a site-by-site valuation to determine Change of Use Charge.
Parking fee increase – $30.8 million over four years in revenue from 1 July 2010.
Firearms fees increase – $$0.42 million over four years.

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.