Mr BONSON - 2003-10-16
Can the Treasurer please advise the House of the progress on the government’s deficit reduction strategy and the final outcome of the 2002-03 budget? My constituents of Millner, Coconut Grove, RAAF Base and Ludmilla would like to hear your answer.
ANSWER
Mr Acting Speaker, I thank the member for Millner for his question, because there is interest in the community about how this government is handling its finances and deficit reduction strategy that we had to put in place in November 2001. These were put in place because, on election to government, we were told by the then Under Treasurer that the budget position was ‘unsustainable’ – in big black letters. He may as well have tattooed it across our foreheads, because that is what drove us to the November 2001 mini-budget, to then put in place a deficit reduction strategy that is standing this Territory and all Territorians in good stead as we move through.
We recognise that, for economic development and growth to occur, you have to have the engine in good shape and you have to have the finances in order; and that simply was not the case when we were elected. The 2002-03 Treasurer’s Annual Financial Report will be tabled later on today, in detail …
Mr Baldwin: Get it out now!
Mr STIRLING: … when we get to Tabled Papers. There is a structure to these sittings and Tabled Papers come later.
Members interjecting.
Mr ACTING SPEAKER: Order, order!
Mr STIRLING: They want to know why I want to get up here now and why we went to the media on this at lunch time. It is because we had a story to tell. I will tell you why the CLP Treasurer never went out the door for a press conference and went to the media on the back of their Treasurer’s Annual Financial Report. I will give you an example.
In 2000-01, the last Treasurer’s Annual Financial Report that they would have reported on before the election, they had forecast a surplus of $1m for the outcome of that year. The outcome was $212m deficit. That is why they never went out to the media …
Members interjecting.
Mr STIRLING: … and you snuck in here at 11 o’clock at night and dropped it quietly on the table, and hoped it was a long time to the next sittings. That is what they used to do. Well, we want to share this information. We want to tell the truth. We told the truth in August 2001, and we are going to go on telling the truth …
Mr Baldwin: Well table it in here.
Mr ACTING SPEAKER: Member for Daly!
Mr Baldwin: Table it.
Mr ACTING SPEAKER: Member for Daly!
Mr STIRLING: … unlike you were. In 2002-03, you told us it was a $12m deficit. I hope the Leader of the Opposition is listening, because he was responsible, the buck stops with him. He was Chief Minister of the day. You told us it was a $12m deficit we were headed for in 2001-02 and, when we had a look at it with Professor Percy Allan and Treasury, it was closer to $130m. They are the facts, and that is what drove us to a mini-budget and a deficit reduction strategy.
In 2002-03, the Treasurer’s Annual Financial Report will record a cash surplus of $9m, but we changed that underlying deficit of $31m. The cash surplus – modest thought it is – is a positive sign that the deficit reduction strategy is on track. It is achieved largely because of the transfer of payments out of 2002-03 into the 2003-04 budget.
The outcome is also assisted by some increases in Territory revenue, but largely one-off ...
Members interjecting.
Mr ACTING SPEAKER: Order!
Mr STIRLING: … largely one-off transactions and large commercial transactions, pastoral properties, commercial building transfers that increased stamp duty on conveyancing.
Mr BALDWIN: A point of order, Mr Acting Speaker! The Treasurer is referring to a document which is called TAFR and it should be tabled in this House. He is referring to it without it being tabled for consideration by members of the opposition.
Mr Stirling: It will be.
Mr HENDERSON: Speaking to the point of order, Mr Acting Speaker. This question and answer does not contravene standing orders. The Treasurer is updating the House on the actual outcome for the 2002-03 financial year. It is of interest to Territorians and it is good news.
Members interjecting.
Mr ACTING SPEAKER: I will seek advice. There is no point of order.
Mr STIRLING: Thank you, Mr Acting Speaker. I wonder if they would lay the same claim against the federal treasurer, Mr Peter Costello, who did exactly the same thing. He went out and told the media, before it had gone into parliament, what the outcome was, but still does not know what he is going to do with the surplus.
The transfer of that payment into 2003-04 from 2002-03 occurs because of a number of factors. Primarily, an injection of specific purpose grants from the Commonwealth and some Territory grants which came into the accounts late in the financial year, boosted the cash balances in some of the departments, particularly Education and Health. However, it is money that has to be paid out in programs in 2003-04, including to the non-government sector or to other recipients such as schools, as would have occurred early in 2003-04. Overall, $20m in operational payments transferring to 2003-04.
Also good management by Treasury in relation to interest payments: $9m less than projected in the budget papers, a saving to Territory taxpayers, and superannuation benefits lowered to the extent of $10m than projected in the budget papers. Interestingly, the reason for that, is less people retiring out of the public service and going on to super than was expected to be the case. People are happy in the work force and are not leaving.
The government is satisfied with this result. However, we remain vigilant about the budget because of those underlying factors. We believe we are still on track for the predicted projected deficit of $24m for 2003-04. As additional payments will be made in some key government areas, such as the police, as a result of the investment we have made coming out of the O’Sullivan Report, the deficit reduction strategy is on target. That is the bottom line. We are slowly but steadily reducing the problem we inherited in August 2001.
I will not be, and I was not out there at lunch time shouting this from the rooftops, because the fact is we are carrying $40m into that 2003-04 year, and that has brought about this unexpected, modest surplus. It is not a genuine surplus, it reflects a $31m underlying deficit which was projected at the time we brought down the 2003-04 budget in May. I commend the Under Treasurer, Jennifer Prince, and the Treasury officers for getting so close in the latter part of the 2002-03 financial year to the actual outcome. If you carry $40m forward, you have a $9m cash surplus, the underlying deficit is $31m, which was projected in May.
ANSWER
Mr Acting Speaker, I thank the member for Millner for his question, because there is interest in the community about how this government is handling its finances and deficit reduction strategy that we had to put in place in November 2001. These were put in place because, on election to government, we were told by the then Under Treasurer that the budget position was ‘unsustainable’ – in big black letters. He may as well have tattooed it across our foreheads, because that is what drove us to the November 2001 mini-budget, to then put in place a deficit reduction strategy that is standing this Territory and all Territorians in good stead as we move through.
We recognise that, for economic development and growth to occur, you have to have the engine in good shape and you have to have the finances in order; and that simply was not the case when we were elected. The 2002-03 Treasurer’s Annual Financial Report will be tabled later on today, in detail …
Mr Baldwin: Get it out now!
Mr STIRLING: … when we get to Tabled Papers. There is a structure to these sittings and Tabled Papers come later.
Members interjecting.
Mr ACTING SPEAKER: Order, order!
Mr STIRLING: They want to know why I want to get up here now and why we went to the media on this at lunch time. It is because we had a story to tell. I will tell you why the CLP Treasurer never went out the door for a press conference and went to the media on the back of their Treasurer’s Annual Financial Report. I will give you an example.
In 2000-01, the last Treasurer’s Annual Financial Report that they would have reported on before the election, they had forecast a surplus of $1m for the outcome of that year. The outcome was $212m deficit. That is why they never went out to the media …
Members interjecting.
Mr STIRLING: … and you snuck in here at 11 o’clock at night and dropped it quietly on the table, and hoped it was a long time to the next sittings. That is what they used to do. Well, we want to share this information. We want to tell the truth. We told the truth in August 2001, and we are going to go on telling the truth …
Mr Baldwin: Well table it in here.
Mr ACTING SPEAKER: Member for Daly!
Mr Baldwin: Table it.
Mr ACTING SPEAKER: Member for Daly!
Mr STIRLING: … unlike you were. In 2002-03, you told us it was a $12m deficit. I hope the Leader of the Opposition is listening, because he was responsible, the buck stops with him. He was Chief Minister of the day. You told us it was a $12m deficit we were headed for in 2001-02 and, when we had a look at it with Professor Percy Allan and Treasury, it was closer to $130m. They are the facts, and that is what drove us to a mini-budget and a deficit reduction strategy.
In 2002-03, the Treasurer’s Annual Financial Report will record a cash surplus of $9m, but we changed that underlying deficit of $31m. The cash surplus – modest thought it is – is a positive sign that the deficit reduction strategy is on track. It is achieved largely because of the transfer of payments out of 2002-03 into the 2003-04 budget.
The outcome is also assisted by some increases in Territory revenue, but largely one-off ...
Members interjecting.
Mr ACTING SPEAKER: Order!
Mr STIRLING: … largely one-off transactions and large commercial transactions, pastoral properties, commercial building transfers that increased stamp duty on conveyancing.
Mr BALDWIN: A point of order, Mr Acting Speaker! The Treasurer is referring to a document which is called TAFR and it should be tabled in this House. He is referring to it without it being tabled for consideration by members of the opposition.
Mr Stirling: It will be.
Mr HENDERSON: Speaking to the point of order, Mr Acting Speaker. This question and answer does not contravene standing orders. The Treasurer is updating the House on the actual outcome for the 2002-03 financial year. It is of interest to Territorians and it is good news.
Members interjecting.
Mr ACTING SPEAKER: I will seek advice. There is no point of order.
Mr STIRLING: Thank you, Mr Acting Speaker. I wonder if they would lay the same claim against the federal treasurer, Mr Peter Costello, who did exactly the same thing. He went out and told the media, before it had gone into parliament, what the outcome was, but still does not know what he is going to do with the surplus.
The transfer of that payment into 2003-04 from 2002-03 occurs because of a number of factors. Primarily, an injection of specific purpose grants from the Commonwealth and some Territory grants which came into the accounts late in the financial year, boosted the cash balances in some of the departments, particularly Education and Health. However, it is money that has to be paid out in programs in 2003-04, including to the non-government sector or to other recipients such as schools, as would have occurred early in 2003-04. Overall, $20m in operational payments transferring to 2003-04.
Also good management by Treasury in relation to interest payments: $9m less than projected in the budget papers, a saving to Territory taxpayers, and superannuation benefits lowered to the extent of $10m than projected in the budget papers. Interestingly, the reason for that, is less people retiring out of the public service and going on to super than was expected to be the case. People are happy in the work force and are not leaving.
The government is satisfied with this result. However, we remain vigilant about the budget because of those underlying factors. We believe we are still on track for the predicted projected deficit of $24m for 2003-04. As additional payments will be made in some key government areas, such as the police, as a result of the investment we have made coming out of the O’Sullivan Report, the deficit reduction strategy is on target. That is the bottom line. We are slowly but steadily reducing the problem we inherited in August 2001.
I will not be, and I was not out there at lunch time shouting this from the rooftops, because the fact is we are carrying $40m into that 2003-04 year, and that has brought about this unexpected, modest surplus. It is not a genuine surplus, it reflects a $31m underlying deficit which was projected at the time we brought down the 2003-04 budget in May. I commend the Under Treasurer, Jennifer Prince, and the Treasury officers for getting so close in the latter part of the 2002-03 financial year to the actual outcome. If you carry $40m forward, you have a $9m cash surplus, the underlying deficit is $31m, which was projected in May.
Last updated: 09 Aug 2016