Deficit slashed, helping to bankroll big-spending election ACT budget

Come back to canberratimes.com.au at 3pm today to find out how the 2016 ACT Budget affects you

As a result, the budget is expected to be a big-spender looking to the coming election, although Mr Barr signalled some "tightening" of eligibility for government concessions.

"We foreshadowed tightening our concession eligibility criteria and focusing it on those who need it most," he said. "You're certainly going to see some measures in tomorrow's budget that redistribute concessions towards lower income earners. But you'll also see a significant investment in our concessions program."

The budget deficit for 2015-16 was forecast at $408 million in June last year and had worsened to $479 million by the mid-year review.

But on Tuesday, Mr Barr will announce an expected result of a $232.5 million deficit, on the back of higher revenue. He said more money was flowing from the Land Development Agency after changes to the land sales program.

Icon Water was paying a bigger divided after higher-than-expected water use and lower-than-expected interest rates.

Tax revenue was higher - mainly due to more stamp duty on land sales than expected, with increases in land values, mainly in the commercial sector, and government borrowings were costing less.

With better management of claims against the ACT government, less money has been needed in the ACT Insurance Authority.

The stronger economic position has helped bankroll a pre-election splurge on schools, health, and transport.

Mr Barr will also announce a new five-year tax plan, expected to scale back on the hefty rates rises of recent years. And despite the tens of millions in new spending commitments, he expects to continue the path to a surplus by 2018-19.

Many of the big-ticket items in health, transport and education have already been revealed in a string of pre-budget announcements in recent weeks.

That included $29 million over four years for new emergency department staff, to help turn around problematic waiting times, and $20 million for Gungahlin schools, which have been placed under pressure by population growth and rising school enrolments.

An extra $17 million will be spent on public transport, including a free city loop bus service. New money will pay for the duplication of the Cotter Road, Aikman Drive in Belconnen and Ashley Drive in Tuggeranong.

Opposition Leader Jeremy Hanson described the announcements as "poll-driven", and an "incoherent mish-mash" of initiatives, many of which appeared to "copy what the Liberals have previously announced".

"I think that Andrew Barr is sensitive to the fact that people are very concerned about their rates going up, they're very concerned about the expenditure on light rail," he said on Monday.

"We'll have to wait and see what rolls out in the budget tomorrow, but my belief is what you'll see is more debt, more deficit, because we've seen that in Andrew Barr's budgets previously."

At least two major reforms will be announced in Tuesday's budget, Mr Barr's fifth as Treasurer and second as Chief Minister.

The first is a comprehensive family violence package, coming in the wake of three critical reports last month, which the government has promised will be the single biggest spend it has made on the issue.

The second is an overhaul of the concessions system, already raising concerns among veterans, disability groups, ageing advocates and students.

That system gives discounts to groups such as seniors, pensioners, and veterans on expenses such as rates, water, sewerage and electricity bills, car registration and bus fares.

Mr Barr indicated in February a shift away from concessions for high income earners, to rein in spiralling costs, which this year hit $51.3 million.

A discussion paper has suggested ending a long-standing 50 per cent rates discount for 3000 pensioner and veterans households, instead capping the discount at $700. It canvassed revisiting the no-rates policy for the city's 328 schools, universities, churches, sports groups, childcare providers and retirement villages.

And it considered scrapping the water and sewerage discounts for some home owners and using the money to instead boost electricity discounts, which would give about $200 a year more money to renters, with home owners losing about the same amount.

When the government invited submissions on concessions changes, the Chief Minister's Veteran's Advisory Council warned that change would cause "enormous angst" to veterans, and ageing groups warned reductions would conflict with Canberra being an "age-friendly city".