Chief Minister Andrew Barr's forecast surplus for 2021-22 is in doubt, with deficits expected over the next two financial years, while market volatility could take a toll on Treasury's coffers, an audit shows.
The ACT Audit Office on Thursday released its annual analysis of the territory's finances, showing that despite a $247 million surplus reached last fiscal year, deficits are on the cards for the next two financial years.
Despite the budget also estimating a potential surplus in 2021-22, the audit shows any such surplus is reliant on continued revenue growth, constraining spending growth to forecasts and generating sufficient investment gains to offset expected deficits.
"The territory has incurred net operating deficits since 2011-12 and forecasts deficits in future years as the costs of delivering public services is estimated to continue to exceed revenue," the audit reads.
"As investment markets are volatile, the territory’s exposure to more or larger operating deficits in future years remains high."
The audit follows budget analysis in June this year, by former ACT Treasury executive director of policy Khalid Ahmed and analyst Adrian Makeham-Kirchner, which also questioned the government's real underlying operating balance - a figure used at the federal level to calculate the budget balance, but one not included in the ACT's budget papers.
The key problem identified in the audit, as in previous audits of the budget, is that expenses continue to outpace the government's revenue, despite significant increases in rates, taxes, fees and charges and increases in Commonwealth grants due largely to population growth.
"Deficits are estimated by the ACT government to continue over the forward years from 2018-19 to 2021-22 ranging from $131 million to $257 million [net operating balance], as the costs of delivering public services is estimated to exceed revenue," the audit reads.
"These past and estimated future deficits cover an eleven-year period."
But a spokeswoman for Mr Barr said the audit office's figures did not include the government's superannuation return, which the government has included in budget balance calculations since 2006-07.
Mr Barr's spokeswoman said when that measure was included, it showed the territory's budget was "in balance across the forward estimates", and the government believed including that measure was a more accurate representation of the territory's fiscal position.
Clarification: This article has been edited, as a reference to a $34 million surplus was not in the audit office report, rather that figure was from the territory budget, the figure in the report was $247 million.