Katy Gallagher sets up economic advisory group

By Kirsten Lawson
Updated April 23 2018 - 9:32pm, first published May 15 2014 - 10:55pm

ACT Chief Minister Katy Gallagher is setting up a high-level advisory group for advice on how to weather the economic storm expected as a result of the federal budget, which ripped more than $100 million out of the territory's budget over four years.
Ms Gallagher will attend the meeting of state and territory leaders on Sunday, has sought a meeting with Prime Minister Tony Abbott, and has set aside two days next week to go through the Canberra budget line by line, looking for savings and revenue measures to plug the gap.
Ms Gallagher, who is yet to name the members of her advisory group, said she would also host four roundtables next week covering young people, “knowledge-based Canberra”, construction and property, and community services to get a picture of the impact of the federal budget cuts. The roundtables would help her present a united case to the Commonwealth for assistance to help the territory through the coming months and years.
Ms Gallagher said she would look closely at territory revenues and spending and use whatever economic levers she could to maintain confidence and economic activity, but she said, as just 9 per cent of the Canberra economy, the territory budget could not maintain the economy single-handedly. She would not back away from a promise to maintain staff numbers in the ACT public service.
“We need to revisit all the decisions we’ve made to date in relation to the budget and reconsider them in light of the dramatic cuts that our budget will now experience . . . so we will have a lot of work to do on Monday and Tuesday.”
Ms Gallagher said while she could not rule out increased fees and charges in the territory budget, those decisions would be made in light of the tolerance and capacity of the community to cope with increased costs.
It looks from her comments and from comments from ACT Treasurer Andrew Barr that borrowing, capital works and other investment in the territory are at the core of her government’s plans to stimulate the local economy.
“We also need to be mindful that no one else is investing in our economy at this point in time,” Ms Gallagher said. “The Commonwealth’s contracting. I imagine there’ll probably be some issues around household confidence in terms of household consumption. So, if no one else is investing there is a role for us.”
The states and territories say they are losing $80 billion over a decade with the Commonwealth backing away from funding commitments. The ACT's share of that was $1.3 billion, Ms Gallagher said.
Cuts to health programs would cost $25 million in the coming year. A federal promise to increase school funding by 4.7 per cent plus enrolments growth was gone.
Ms Gallagher said the outlook was bleak for the city, with extensive cuts to the federal public service and deep cuts to funding for health ($25 million of cuts to health programs in the coming year) and education. The federal government had singled out Canberra for worse treatment than anywhere else, and the hit would amount to “many hundreds of millions of dollars” in lost economic output.
“For many Canberra households, the Commonwealth's budget will translate into a struggle to meet mortgage payments, heating bills, school excursions and petrol costs, which are set to rise as a result of the reintroduction of fuel excise. These costs will compound in households across the ACT as they are expected to cope with the combined effect of new taxes, costs to services and a dark cloud hanging over their jobs.”
The 2000 public service jobs to be cut in 2014-15 came on top of 2000 jobs cuts in 2012-13 and 1500 in the six months to December 2013.

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