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ACT Budget presented on 6 June 2006 by the Treasurer.

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ACT Budget presented on 6 June 2006 by the Treasurer Mr Jon Stanhope MLA

For the Future

Mr Speaker, every year the Treasurer rises to deliver a budget that deals with the

coming year.

That is the reality of budgets - they usually deal with short-term fiscal


This one does that too, but it does more.

It is a very different Budget. It defines a path for the future - into the next

decade and the one after that.

In education, it looks ahead to 2020 — the year those youngsters just starting

out at preschool will finish Year 12.

In health, it looks to a time when older Canberrans will, for the first time in our

history, outnumber young ones.

It looks at the crippling impost we will leave those who come after us in this

place, on the Government benches of 20 or 30 years’ time, if we continue to rack

up superannuation liabilities at our current rate.


It is a budget that says it is time the ACT had the maturity and the wisdom to

stop living beyond its means, as it has done, year after year, government after

government, since self-government.

This is a budget for this year, and for the future.

Mr Speaker, in many ways this might be the most significant budget to be

handed down in our short history. And it draws heavily on that history. It looks

unflinchingly at what we have done, how we have spent, the expectations we

have nurtured, the excuses we have made.

The truth is not always comfortable. Many of us in this chamber, on both sides

of the room, have been part of governments that have been complicit in this

history. It is right that we feel somewhat discomfited.

The truth is, since self-government ACT Governments have consistently spent

more, across the board, on services, than governments in the rest of the country.

And we have done so even though on the face of it our needs ought to have been


We are more affluent, more highly educated, younger and healthier than the rest

of the nation. Yet our expenditure on state services has been roughly 20 per cent

above the national average.

And how have we funded this expenditure? Not by charging higher taxes, or

sending bigger rates bills. Not by striking oil or discovering gold.


We did it, in the early years of self-government, by relying on transitional

hand-outs from the Commonwealth. More recently, we have done it by selling

off the land under our feet. Sometimes, even these strategies have not been

sufficient, and we have funded our higher levels of expenditure through

wafer-thin surpluses, or deficits.

We have been living beyond our means.

Today, we start a process that will bring down our unit costs in health, without

compromising our great outcomes. We embark on a journey that will

consolidate our schools system and make it the first choice of Canberra families.

We begin to align taxes and fees so that they better reflect the real costs of

delivering services.

Mr Speaker, there is no crisis. Outside this building, the people of Canberra are

going about their business — and their business is booming.

The economy is strong - and growing. We have virtually full employment —

indeed, our businesses tell us that the biggest impediment to even faster, even

greater growth, is that their prospects are outstripping the supply of labour.

State Final Demand is forecast to grow at 3 per cent in 2006-07 and

4.75 per cent over the forward estimates. Employment growth is forecast at 0.75

per cent in the Budget year.

The forecast for the housing market - an important part of our economy - is for

modest growth, with residential property turnover returning to long-run average



There is no crisis on the streets and in the suburbs of Canberra. But there will be

one - next decade, or in the decade after that - if we do not act today.

It will be a crisis that will seriously affect the capacity of future governments to

deliver the sorts of services that Canberrans expect and deserve: the best health

system, the best schools, the safest streets, the best cultural experiences, the best

roads, the purest water, the best amenities.

Mr Speaker, there would be some who would say that if we have gone on in this

manner for the past 17 years, we can go on in the same way for the next 17.

We cannot. New pressures are emerging that make it imperative that we act

decisively, and act now.

Revenue from land sales has fallen, and while it will fluctuate from year to year,

while we might still expect occasional windfalls, over time land will contribute

an ever decreasing proportion of revenue to the Territory.

At the same time serious pressures are making themselves felt. Just like the rest

of the country, we are ageing. In fact, as a community, we are ageing at a rate

unequalled by any other city.

The implications of this shift will be felt most profoundly in our health system.

Across the country, the demand for greater expenditure on health is inexorable.

The ACT is not immune.


The demographic shift is being felt too in our government school system, where

almost 18,000 desks sit empty.

These pressures are already manifest, already growing in urgency. Others — like

our frightening superannuation liability — loom just ahead.

The temptation is not to look — to leave it for another day, another government.

Mr Speaker, this is the day, and this is the government.

Today, I hand down a budget and announce a suite of structural changes that

will put the finances of the Territory on a sustainable path.

Today, I announce expenditure measures that will bring greater efficiency to

government service delivery, ensuring that the resources we have at our disposal

are directed at the areas of greatest priority, and to those in greatest need.

I also announce revenue measures that will enable us to continue to deliver the

excellent services that the community expects, but that reflect more accurately

the true cost to government of providing those services.

I am pleased to say that, significant as these measures are, important as they are,

they do not require the Government to relinquish the social and economic

principles we have articulated in our vision for this city — The Canberra Plan.

To be sure, some of the goals we set ourselves in that Plan may not be reached

quite as swiftly as we would have liked. Some ambitions have had to be cooled.

But the philosophy is intact. Our determination to build a community that allows


every one of its members to reach their potential and engage fully, is


If anything, it is heightened. If anything, over time, our goals will be more

achievable, because we will be able to do more with what we have.

And there is some exciting social policy work lying just ahead. The first steps

have been taken towards the establishment of an elected Indigenous body to fill

the gap created by the Federal Government’s abolition of ATSIC.

Our Child and Family Centres are bringing a truly cross-sectoral approach to

supporting and nurturing young families.

And as part of this budget we embark on a fantastic whole-of-government

intervention program that will support and case-manage Indigenous youngsters

at risk.

Our Labor philosophy, our Labor focus, is intact.

This is a budget that values the neighbourhood, that understands that people feel

strongly about their open spaces, their footpaths, the good condition of their


It is a budget that will invest $20 million over four years on road and

infrastructure repairs and $500,000 restoring more than 40 hectares of

drought-affected sportsgrounds to operational condition.


Mr Speaker, while the full benefits of the reforms I announce today won’t be felt

this year, or even in this budget cycle, there will be some immediate impact on

our finances. That is absolutely essential.

Mr Speaker, today, I not only have had the pleasure of announcing Labor’s fifth

consecutive surplus — an estimated surplus of $120.5 million for 2005-06 — I

today announce a financial future very different to the one anticipated in the

Mid-year Review.

Under Australian Accounting Standards, this Budget forecasts a deficit of $16.4

million in 2006-07 and $11.7 million in 2007—08. These rise to strong

surpluses of $73.2 million and $147.4 million in 2008-09 and 2009-10

respectively. Over the four year period of the budget, this will be an aggregate

surplus of $192.5 million.

But while these figures are comforting, Mr Speaker, we all know that they do

not tell the complete story.

The ACT is now alone in using the AAS as its headline Budget measure.

Today, I announce that the Government intends to adopt Government Finance

Statistics (GFS) as its headline budget measure, starting now.

Under GFS, the Budget forecasts a deficit of $80.3 million in 2006-07 and

$40.7 million in 2007-08, rising to surpluses of $18.3 million in 2008-09 and

$67.7 million in 2009-10 respectively.


The new headline budget measure will provide a clear indication of the impact

of the Government’s policy decisions on the Territory’s financial performance.

Under this system of accounting, land sales and unexpected stock market gains

(or losses) on superannuation investments will be excluded from operating

revenues. The vagaries and volatilities of the stock market and asset sales

therefore will have no impact on the Territory’s headline measure.

Consistent with the accounting standards under which budgets are required to be

prepared, Territory Governments have in the past included these as revenues and

made recurrent spending decisions on that basis.

No longer, Mr Speaker.

It goes without saying that in the short term, under the GFS measure, the

Territory budget will record considerable deficits.

It would have been easy — indeed it was very tempting — for the Government

not to adopt the GFS standard at this time — to leave that, along with all the

other tough decisions, for another day.

After all we are forecasting substantial surpluses very shortly, under the current

accounting standard - the basis under which all previous Territory

Governments, of all political persuasions, have prepared their budgets.

But my Government believes that this too is a decision that could not wait.


The adoption of GFS is consistent with my Government’s strategy of reducing

reliance on land sales and unexpected stock market windfalls. Once the switch

has been made, no government can be tempted to ignore the underlying reality

of the Territory’s fiscal situation.

Having grasped the nettle, I am pleased to announce that the Budget forecasts

GFS net operating cash surpluses across each of the forward years.

Mr Speaker, those results are no accident. They are not down to luck or a stock-market gamble. They are down to a Labor Government determined to put this

Territory on a stable financial footing.

The reforms announced today, in this Budget put the Territory on a path to

achieving eventual GFS surpluses.

Mr Speaker, while we have adopted a new standard, money from future land

sales will continue to be recorded on the balance sheet - or capital account - and

will of course remain available to the government of the day, to acquire new or

replacement assets.

Similarly, any gains on our superannuation investments will be posted on our

balance sheet and will be available to meet liabilities looming into the future.

Our Economic Future

Mr Speaker, governments do not exist for their own sakes, but to serve their

communities and support them.


One important role of government is to create an environment that is welcoming

to business, an environment in which red tape is kept to a minimum, in which

taxes do not act as a disincentive, in which excellence and innovation are

rewarded, in which opportunities are created for those willing and able to take


Canberra may have begun its life as a public service town, but six out of every

10 of our jobs are now in the private sector. The balance has shifted. It will shift

more in the future.

Since coming to office, and in particular since the release of the Economic White

Paper, Labor has provided real and meaningful assistance and support for

business, helping to attract and encourage entrepreneurs to our community, and

helping them develop and flourish once they are here.

It has worked. Since Labor came to office the number of small businesses in

town has grown steadily. We now have the highest concentration of knowledge-based industries in the country and boast more than 1000 ICT firms. In 2004-05

home-grown exports hit an all-time high of $763 million.

The feeling of energy and optimism in the business community is greater now

than it has been for years.

We are enjoying a commercial construction boom unequalled in the period of


We have secured NICTA for the Territory.


The Government is delivering a refreshed and reinvigorated convention centre.

We have listened to business in this town. We are still listening, and what we are

hearing is that strong business growth has meant that needs have moved on.

Again and again, business is now telling us that the biggest challenge

confronting them now is not getting off the ground, but finding the world-class,

skilled workers that will let them reach their growth potential.

They are telling us what they want from government is sound economic

management, strong fiscal policy, a responsive and efficient public service, an

easing of regulatory complexity, and a more streamlined planning system.

In this Budget, that’s what we deliver.

Today, the Government sharpens its focus, taking the emphasis off grants-based

support for individual businesses, and putting it squarely on creating the kind of

environment that will help the businesses that are already committed to this

town, grow to their full potential.

We are doing that by introducing sweeping reforms to our education system,

reforms that will create clear pathways for students, preparing them for the jobs

of the future, right here in the Territory.

We are doing it by actively selling Canberra’s virtues as a place to work, with

promising results from a pilot “Live in Canberra” campaign.


We are creating simpler, clearer and more efficient organisational structures,

scaled to the reality of a small city-state, and ready to support business.

We are simplifying the regulatory framework, and its administration too.

We are providing an extra $585,000 to continue reform of the planning system,

to render it even simpler, faster and more effective. In this respect, supply

reforms are just as crucial as demand reforms. Cabinet will be shortly

considering the possibility of guaranteeing a set percentage of each year’s land

release in the Territory to the market.

Our expenditure on economic development will be brought into line with

national averages, and the investments we make will be better targeted, to give

greater dividends to the business and broader community.

The Government will not make further investments in locally-focused venture

capital arrangements. We believe the market is now well-served with our

contributions to ANU Connect, the Canberra Business Development Fund and

Epicorp. And we are pleased to see the Capital Angels Network — a private-sector-run investment network — now gathering momentum.

Marketing activities will be rationalised, to minimise duplication with

Commonwealth activity.

We will give business the things business tells us it needs: good information,

good mentoring, good support. This budget provides an additional $1 million a


year to extend and develop these services and functions, along the lines of the

CanBAS model.

Mr Speaker, good governments help their communities build on their

competitive advantages. Good governments make sure that they really know

their communities inside out, so that those advantages are clear.

Today, I announce a strategic review of Canberra’s innovation systems and

assets. This review will look at all the elements of the system and how they

interact — enterprises, institutions, talent pools, the regulatory and support

environments — and how we might better capitalise on these assets in new

ways, led by the business community itself.

We will also develop an investment attraction strategy that will result in a suite

of ‘prospectus-style’ marketing material, including online material, to help

individual businesses in their own investment attraction activity.

And we will redouble our efforts to ensure that Canberra businesses have access

to the best workers, with the best skills, with a strategy that focuses on human

capital development and long-term workforce issues.

This will involve some significant refinements to our business advisory


Mr Speaker, while this budget remains faithful to the vision and the principles of

the Economic White Paper, it also responds to emerging priorities, and business

has been strident in letting us know that their priority right now is skills.


Today, I announce the establishment of the ACT Skills Commission.

The commission will replace the existing Canberra Partnership Board and the

Small and Micro Business Advisory Council.

The ACT Skills Commission will provide leadership and ensure coordination of

effort. It will ensure that tackling skill shortages is at the forefront of our

decision-making and our policy-making.


Mr Speaker, Canberra is not just a city of 330,000 proud residents. It is the

nation’s capital, home to national attractions and monuments which belong to all


There is always a balance to be struck when we consider how to best promote

our city to ourselves, and to those from outside our borders.

There is no doubt that the national face of Canberra is already well promoted

beyond the city limits by Commonwealth agencies such as the National Capital

Authority — and, of course, by the national attractions themselves: the War

Memorial, the National Museum, the National Gallery — each has a significant

promotions budget.


The danger is that we will find ourselves duplicating the Commonwealth effort,

or making an investment in the promotion of local sights that cannot be justified

by the dividend.

This budget reduces funding for tourism, though it will still be above the

national average. Some of the savings will come from the consolidation of

tourism functions within the public service. While the ACT Tourism

Corporation will no longer exist, the Government will want to keep speaking to

Members of the board and drawing upon their ideas and expertise in a less

formal capacity.

Structural Reform

Mr Speaker, one of the greatest gifts any government can give to the community

is a public sector that delivers the best possible services, at the lowest possible

cost. Ask an average Canberran whether they would prefer their rates and fees to

be swallowed up in agency overheads or to end up back in the community, in the

form of services, and his or her answer will be clear.

Today, the Government embarks upon a major reform of the public sector and

its structures, a reform that will see fewer of our resources swallowed up by



The public-sector reforms in this budget seek to consolidate transactions, bring

functions and agencies together where it is logical that they be situated together,

and improve policy advice to Ministers.

As I announced in April, we will establish a Shared Services Centre that will

bring together human resource management, finance, information technology

and communications, procurement and records management.

Economies of scale will flow from better job design and greater specialisation,

the adoption of common processes, a reduction in duplication, and the greater

operational flexibility that comes with a critical mass.

Importantly, there will be benefits for staff, through greater opportunities for

learning, peer support and career progression.

Other measures will deliver additional efficiencies.

Six-cylinder vehicles in the Government’s fleet will be progressively replaced

with four-cylinder cars, and the overall size of the fleet will be reduced; bringing

not just economic, but environmental benefits.

Office accommodation of public-sector employees will be rationalised, as leases


Mr Speaker, the new Administrative Arrangement Orders coming into effect on

1 July will bring other significant changes.


Given the central importance of economic development, and its

inter-dependence with other whole-of-government policies, the economic

strategy and business development functions of the Department of Economic

Development will be transferred to the Chief Minister’s Department.

A new Department of Territory and Municipal Services will be established,

bringing together a host of territorial services and functions.

Sport and recreation functions will be absorbed into this department, better

integrating the management of facilities such as sportsgrounds and pools with

the sport programs delivered in those facilities.

Environment ACT will also become a part of the department, integrating all

urban and non-urban land management functions in one place and creating

greater opportunities to ensure that the land policies we pursue will be

sustainable, with a clear sense of our responsibility to reduce greenhouse gas


Transport functions will be combined in a new Office of Transport within the

Department of Territory and Municipal Services. ACTION will be transferred

to this office.

Emergency services will be brought under the umbrella of the Department of

Justice and Community Safety, but the statutory powers and responsibilities of

the Chief Officers of each operational service will be preserved.


A host of regulatory functions across various government agencies will be

merged into a single office, within the Justice and Community Safety Portfolio.

The full year effect of these structural reforms is a decrease in the cost of public

services in the order of $55 million — or 1.7 per cent of the total budget.

Mr Speaker, the issues with which a modern public sector is asked to deal are

frequently complex, and often require prompt action. It is more crucial than

ever that the structures are responsive and adaptable to new challenges.

The changes I announce today will create a new capacity in the service to

respond to emerging problems and issues, to deliver on policy priorities, and to

respond promptly to changes in those priorities. The coordination and guidance

role of central agencies will be considerably strengthened. That means advice to

government will be better advice. And that means government will be better able

to deliver on its own policy priorities.

Collectively, the measures announced today will result in a reduction in the size

of the ACT public service in 2006-07 of about 500. This is similar to the

decrease we achieved in 2005-06, and will once again be achieved through

natural attrition and voluntary departures.

Mr Speaker, a further essential public-sector reform I announce today relates to


From 1 July this year, all new entrants to the public service will be eligible for

an employer superannuation contribution of 9 per cent. This will increase to

10 per cent if the employee makes a contribution of at least 3 per cent. Every


public servant will also have access to salary-sacrifice provisions if they wish to

take advantage of these to increase their super.

Similar reductions in entitlement will apply to new members of the Legislative


The superannuation entitlements of all existing workers will be unaffected.

Mr Speaker, make no mistake: this was not an easy decision for a Labor

Government to take. The anguish involved was almost as acute as the anxiety of

looking 10, 20 years into the future and imagining the ramifications of not

making the decision.

The facts are plain. While there will be some very modest benefits flowing from

this reform across the forward estimates, the real budgetary impact won’t be felt

for decades.

If my Government had not taken this tough decision today, if I had left it for

another budget, another Treasurer, in 20 years’ time the annual superannuation

bill for the Government of the day would have reached $350 million in today’s


That’s almost half the health budget.

What would I — long-since retired, sitting in my rocking chair, watching the

bankrupt Treasurer of 2020 deliver a morsel here and a morsel there to a

clamouring community — what would I have told my grandchildren about why

their property rates had just gone up by 300 per cent?


Mr Speaker, instead of leaving the decision on superannuation to a future

Government, on another day, this Government has chosen to do the right thing

for the Canberrans of the future.

In fact, by acting now, and by aggressively ensuring that we make provision for

future superannuation liabilities as well as for current ones, I am able to

announce that we have been able to bring back the expected date by which our

superannuation liability will be fully funded to 2030.

Even if the public servants of 2006 do not thank this Government, their children

and grandchildren will.


Mr Speaker, there is no question that health is the single most important service

area for any government — the most costly, and the one that has the most

devastating consequences if it is neglected.

At the same time, it is an area of the budget that must be managed. This is

perhaps the only area of government expenditure where demand could be truly

said to be insatiable.

We must allow for growth in our health spending, but we must also contain that

growth. Put simply, the growth rates of recent years — over 10 per cent a year

— cannot be sustained. Unchecked, they would see health expenditure consume


more than 50 per cent of the total General Government expenditure by the end

of the next decade.

This budget provides significant additional funding for health — $41.7 million

in 2006-07, $51.7 million in 2007-08, $69.7 million in 2008-09 and

$114.2 million in 2009-10.

But this new investment must be directed well and carefully. It must go to where

it is most needed. Mr Speaker, our attitude to health, like our attitudes to many

other areas of government expenditure, must change.

The cost of our hospitals has been well above the national benchmark since self-government. This budget sets efficiency targets that will see the cost per

separation being brought to within 10 per cent of the benchmark over the next

five years.

Funding to some areas of significant demand pressure will continue to grow at

high rates.

Cancer services will grow at 8 per cent a year, mental health will grow at 6 per

cent a year and the Health and Community Care program, which provides

support to older Canberrans in their homes, will grow at a rate of 9 per cent a


A good health system focuses on improving health outcomes. It focuses on

prevention. It avoids unnecessary hospital admissions. It provides care in the

appropriate setting. Above all, it engages people in their own health, pricking

them into self-awareness, encouraging them into self-management.


Reforms being introduced in this budget will streamline and differentiate the

services offered by The Canberra Hospital and Calvary Hospital.

This represents a major reconfiguration of service delivery.

The Canberra Hospital will be clearly identified as the major tertiary referral

hospital and Calvary as a provider of general hospital services. Both will

continue to offer emergency services.

The outcomes of this reconfiguration will be greater specialisation, a better

containment of demand growth, and a real reduction in unit costs.

Negotiations will commence with Little Company of Mary Health Care to

clarify ownership and control arrangements to ensure that the Government is

able to get better value for money from the services it purchases from the

hospital. A planned sub-acute facility will proceed, boosting post-acute care and

rehabilitation and reducing pressure on the acute hospital system.

Community health will be reformed. Unnecessary admissions to the hospital

system will be reduced, with support systems targeting those Canberrans at risk

of multiple hospital admissions and those just discharged from hospital.

The ACT’s higher-than-average expenditure on community health is in part due

to universal, free access to programs that are means tested or that attract a fee in

other jurisdictions. In line with other States and Territories, people on higher


incomes will in future be asked to make a contribution towards the cost of the

community health services they access. Safety nets will maintain free access for

people on low incomes, including holders of Health Care Cards.

Mr Speaker, growth in health expenditure across the forward estimates is higher

than the growth in revenue. Health will continue to acquire an increasing share

of the budget. It is right and inevitable that it does so.

The challenge is to contain the growth to sustainable levels. This budget does

that, but it also represents a significant investment in areas of great priority.

$18.7 million will be spent not just replacing the second linear accelerator at The

Canberra Hospital, but buying a third, to meet a growing demand for oncology

services, and creating the infrastructure to accommodate a fourth by 2012.

$12 million will be spent to boost acute bed capacity and almost $5 million to

boost critical care bed capacity.

There will be a four-year, $10 million assault on waiting lists, and almost

$5 million will be spent boosting the numbers of mental health specialists in our

health workforce.


Mr Speaker, if health is the biggest budget item confronting governments,

education is the next biggest.


Government schools and preschools have delivered education of high quality to

Canberrans from the earliest days of this city’s existence, helping generations of

young Canberrans reach their intellectual and social potential.

There is no doubt that the sheer quality of that experience makes most long-term

Canberrans fiercely protective of the system, and nostalgically attached to the

neighbourhood school concept.

But as we progress into the 21st century, our government school system is

labouring under considerable pressure from changing circumstances and

changing community expectations.

It is losing students to the non-government sector, and it is losing out to an

ageing of the population that is robbing our classrooms of boys and girls,

leaving almost 18,000 empty desks across the system.

Our schools are under capacity by more than 30 per cent across the board. Our

infrastructure is ageing. Some of it is tired-looking.

Mr Speaker, if current trends persist, our government schools will cater for

fewer than half of our school-age population within a decade.

This is another of the fast-looming crises which cannot be put off to another day

or another government.

And nor would we want to.


Labor is deeply and philosophically committed to government schools. We

don’t believe the answer is simply to close schools with dwindling populations

and to keep on closing them until there is just a ghost of a system left to remind

us of what was.

We want to again make government schools the schools of first choice in this

town. And we will do it, starting today.

This Budget involves a historic investment in government schools and


It sets out a vision for public education that will take a child just starting out in

preschool today, and give that child a clear and coordinated path through

until 2020.

Mr Speaker, Towards 2020: Renewing our Schools will involve a major school

rationalisation program, which will start immediately and continue across the

forward years. A significant number of neighbourhood schools will close, with

comprehensive consultation on proposed closures starting right away.

Over four years the Government will invest $90 million in significant upgrades

of remaining schools. Funding for school maintenance has been boosted by

$3 million a year from 2007-08 — a full 25 per cent — to ensure that schools

are maintained to higher standards.

As previously announced, $45 million will be invested in a new

preschool-to-Year-10 school on the site of Ginninderra District High School.


Today, I can announce that another $21 million will be spent on a new primary

school and preschool in East Gungahlin, while another $1 million will be spent

on a feasibility study for a joint secondary college-CIT campus in Gungahlin.

That is a massive investment of $67 million in new schools.

This Budget invests an extra $20 million over four years in information

technology in schools.

Mr Speaker, quality infrastructure is an essential but by no means the only

element of a good school.

Quality teachers, who are supported in their profession, take quality

infrastructure and turn it into a quality school.

Program breadth, which gives students choice, also makes good schools.

Mr Speaker, this budget will allow us to create schools that combine these

essential elements.

The ACT has prided itself on its school-based curriculum. The capacity to tailor

teaching material to the needs of a particular classroom or a particular student, is

part of the essential repertoire of a good teacher.

However, curriculum development can and must make appropriate use of

nationally and internationally available models and materials. Teachers should

not be in the business of reinventing their profession, just refining it. And that


distinction will, over time, not only produce better results for ACT students, but

reduce the considerable costs of our existing curriculum development system.

Mr Speaker, over the next four years, Canberrans will see exciting changes

taking place right across the government school system.

No longer will there be a single, standard template for schooling. Each region

will have a plan tailored to its needs.

Some existing schools may become early-childhood schools.

Some may become middle schools.

The feasibility study into the proposed Gungahlin secondary college will look at

the possibility of co-locating a college and a CIT campus, creating a truly

seamless vocational education facility unlike anything seen in this territory


The Government is excited by Towards 2020: Renewing Our Schools. I know

that the families of Canberra will be excited by it too, once they see the detail

and understand the opportunities. I encourage them to engage fully with the

proposals and concepts that have been suggested for their particular regions.

I am confident that this historic investment, and the ‘2020 vision’ behind it, will

restore confidence in our public schooling system and make it truly the system

of first choice for Canberra families.



Mr Speaker, this Budget involves some significant changes to the operations of

Housing ACT.

As many Canberrans would be aware, the Government has been actively

considering options for reform of our public housing system. This process has

been conducted openly and very publicly and has not been without its passion

and its controversy.

Housing is about much more than a roof, four walls, a bed and a stove. It is

about home. It is about community.

That makes the delivery of public housing a particular challenge, but also an

opportunity for true community building.

I hope that the process the Government sets in train today will see some of those

challenges met, those opportunities fulfilled.

I am pleased to announce a number of initiatives that will take effect

immediately, as well as some options that are being worked through.

Efficiencies of $10 million a year will be achieved in operational and

management costs.

Of these savings, $18 million will be directed over the next three years towards

the capital program. The budget provides an additional $12 million over the

next three years in capital funding. Together, these measures will give the


Government $30 million over three years to reconfigure housing stock to better

reflect the needs of tenants.

As a matter of some priority, the Government will also actively explore the

option of selling 500 public housing dwellings, with the proceeds to be

reinvested in stock that better matches demand and need.

In other words, we are saving, to spend.

We are investing, to save.

Available public housing will in future be better directed to those most in need,

in accordance with the requirements of the Commonwealth State Housing


The eligibility criteria for public housing will be tightened to 60 per cent of

Australian Average Weekly Earnings for singles, and 75 per cent of Australian

Average Weekly Earnings for couples. Of course, discretion will still apply so

that individuals or families in particular need or at particular risk will be

accommodated more swiftly.

Human and Community Services

Mr Speaker, a community’s worth can be measured by the value it places on its

most vulnerable, its most marginalised members.


It can be judged by how well it secures their interests against the interests of the

majority, how safe it keeps them from abuse, how well it enables them to live a

full and engaged life.

In any society there are few groups more vulnerable than children. And there are

few more at risk of neglect or invisibility than people with disabilities.

Labor has invested exceptionally heavily over the past few years in child

protection and disability services. We had to, in order to redress neglect so

serious it could not be ignored.

Since coming to Government, we have increased expenditure on disability

services at an average rate of around 16 per cent a year. Operational expenditure

on child protection has increased by an average of around 19 per cent a year.

Over that time we have addressed and accounted for historic under-resourcing of

services to some of the most vulnerable individuals in our community.

Such extraordinary rates of growth in investment obviously could not persist

indefinitely. But investment is still needed, and now we have the opportunity to

put down the broad brush and start on the detail.

The focus in this Budget is on integrated service delivery, particularly for those

with multiple needs.

An intensive services unit will be established to reduce duplication and better

integrate human services delivery. For complex cases, a streamlined case


management system will be established so that a full range of services can be

delivered under a single case management plan.

Mr Speaker, the community sector has always, and will always, play an

important role in delivering vital services to people in need. Theirs is a critical

partnership with government. Without the community sector, the impost on

government of providing the full range of services, to such quality, would be


But just as we expect efficiency from our own agencies, there is scope for

greater efficiency and effectiveness in our dealings with the community sector.

The Government believes that the administrative burden on community sector

organisations can be reduced through the establishment of a single interface area

in the Department of Community Services. This budget provides new funding of

$300,000 for improving management and contractual arrangements with the

sector. A further $100,000 a year is being provided for the establishment and

maintenance of a grants portal, which will also be heavily used by the

community sector.

Community Safety

Mr Speaker, we are fortunate to live in a safe city, with safe streets, safe

suburbs, safe homes.

This Budget continues Labor’s commitment to community safety, providing

funding for an additional 60 police officers. This investment will bring the

number of additional police funded by this Government to 120 by the end of


2008-2009, giving ACT Policing greater flexibility and greater visibility and

allowing them to respond better to calls by Canberra residents.

A number of other safety and security measures will also be funded, including;

• the installation of a number of extra CCTV cameras at critical transport

points and sites of mass congregation; and

• the installation of CCTV cameras in ACTION buses.

Our massive investment in bushfire preparedness continues in this budget, with

more than $5 million to be spent over the next four years reducing the build-up

of fuel levels.

A timely boost of more than $2 million over four years has been given to the

Director of Public Prosecutions for extra staff, and a further $1 million over four

years will increase the capacity of the Government Solicitor and the Magistrates

Court to handle the growing number of child protection cases.

Capital Works

Mr Speaker, I turn now to Capital works.

This budget makes a substantial investment in building the Territory’s assets,

with a new works program totalling $272.2 million bringing benefits to

Canberrans of all ages, and all interests.

There are the big-ticket items — the $45 million West Belconnen School, the

$21 million primary school in East Gungahlin and $20 million for road repairs.


There’s the $17.3 million new Emergency Services headquarters at Fairbairn.

Then there are the smaller projects, the ones that secure our environment, ensure

our safety, improve our amenity.

Significant projects include:

• $800,000 for a neighbourhood oval at Harrison;

• the creation of a predator-free sanctuary at Mulligans Flat reserve;

• an upgrade of the Canberra Theatre, to improve disabled access;

• the upgrading and refurbishment of government office assets;

• a temporary additional car park at The Canberra Hospital;

• $3.9 million for the upgrade of fire trails;

• $1.4 million for a high-rise emergency vehicle; and

• $2.4 million for a new waste disposal cell at Mugga tip.

And, as in past years, we are conscious of the need to maintain existing assets

and preserve the amenity of infrastructure. Funding of $32 million has been set

aside for capital upgrades.


Mr Speaker, living beyond our means implies not just that we have spent too

much, but that we have earned too little.


Yes, our expenditure on tourism has been 111 per cent higher than the national

average. Yes, our expenditure on health is 13 per cent higher than the national

average and our inpatient costs 22 per cent higher.

But our revenue-earning capacity has been correspondingly low.

We are not, it must be said, a high-taxing jurisdiction.

Figures from the ABS in March this year show that combined state and local

taxation in the ACT is 11 per cent lower than the average of all the States and


And over the coming years, my Government will abolish several business taxes.

Already, a number of local taxes have been abolished in fulfilment of the

Inter-Governmental Agreement. In coming years — starting as early as July 1

this year — a number more are to be abolished.

Under a schedule agreed to by the Federal Treasurer, the Territory will eliminate

taxes that will see my Government forgo approximately $21 million across the

budget years — rising to more than $14 million a year, once the final taxes are

abolished in 2010.

From July 1, non-real estate business conveyances will be abolished — the

legislation has already passed this Assembly. Stamp duty on credit

arrangements, instalment purchase agreements and rental arrangements will be

abolished by next July. Stamp duty on leases will go by July 1 2009. Stamp duty

on non-quotable market securities will go by July 2010.


But such reforms as these make it all the more necessary to look afresh at


Mr Speaker, the closing of the fiscal gap between expenditure and revenue starts


This budget introduces a range of revenue measures that will enable

governments now, next year and in to the future, to continue to provide a higher-than-average level of services to the people of Canberra, but to do so without

mortgaging the future.

From now, the fees and levies we impose must more accurately reflect the true

cost of providing services.

From now, Canberrans will be encouraged to understand the connection between

the money they contribute to government, and what they get back.

Labor has made an extraordinary investment in emergency services over recent

years, with an increase in annual expenditure of $29 million since 2001-02. We

had little choice in the matter. Nature, in her most disastrous form, forced our

hand. But the investment — the continuing investment — costs the community


That is why, consistent with every other jurisdiction except the Northern

Territory, a Fire and Emergencies Services Levy will be introduced, to be

imposed through the rating system. This levy will raise $20 million a year.


The existing Ambulance Levy will be increased from 1 January 2007, raising

$3.3 million.

Mr Speaker, at the municipal level, currently there is an imbalance between

revenues and expenditures. General Rates in 2006-07 will increase by 6 per cent

and will be indexed at the Wage Price Index, rather than CPI.

This measure will raise extra revenue of $10.4 million in 2006-07, $5 million a

year of which will be reinvested in increased maintenance. This will be

increased to $10 million per annum in 2007-08.

Utilities receive considerable benefit from the Territory, through the occupation

of government land for infrastructure such as cables and pipes. The Territory

incurs the cost of maintaining these land corridors and easements. To reflect

that cost and to compensate the Territory, a Utility Infrastructure Charge will be

introduced. Net revenue from this measure is estimated at $15 million a year.

Mr Speaker, the Government has set itself the target of reducing per capita

potable water use by 12 per cent by 2013 and 25 per cent by 2025. As a revenue

measure and also a device for moderating demand, a Water Fee of 30 cents per

kilolitre will be incorporated into the Water Abstraction Charge.

As well as providing the Government with a return on a valuable resource, this

initiative will help us manage the demand for water. It will raise revenue of

around $14 million a year.

As always, those eligible for rebates and concessions, such as pensioners,

schools and churches, will continue to receive those rebates.


Budget Reform

Mr Speaker, significant Budget reform always involves implementation

challenges — there will inevitably be unanticipated complications and

difficulties along the way. The Government recognises this, and it is committed

to dealing with these challenges as they arise.

Of course, today, Labor is doing much more than simply changing the way

government is structured. We are also committing ourselves to change the way

the Government conducts its business. We want to bring greater rigor to our

processes, and greater appreciation of the full financial ramifications to all of our


The budget process to date has been effective when it comes to annual resource

allocation. As Members would notice from this Budget, however, the horizons

are being pushed out, to a point well beyond a single electoral cycle.

The budget process will become the central strategic policy-setting mechanism

for the Government.

Wherever practicable, funding commitments for new initiatives and programs

will be for a limited time. Their continuation beyond that time will be subject to

an evaluation and post-implementation review.


The Government will require its agencies to identify options for efficiency or

service offsets for every spending proposal, based on long-term strategies to

contain costs.

Cash management across the government agencies will be reformed to

strengthen transparency and accountability, and to ensure that cash balances are

used more effectively.


Mr Speaker, today Labor has made some tough decisions.

They were all the harder, all the more stressful for my Ministerial colleagues and

for me, because there was no short-term political imperative behind them.

We weren’t driven to this day. We chose it. We planned for it. We prepared for

it. And, I have no doubt, we will now endure the political pain of it.

But we have done the right and courageous thing here.

Good governments, Mr Speaker, look beyond the electoral cycle.

They look ahead, to the world that will be inhabited by their children and their


I am pleased to present this, my first Budget as Treasurer, in the certain

knowledge that this is a Budget for today, but also for the future.


Mr Speaker, I commend the Budget to the Assembly.