A surge in land sales has helped deliver a $300 million improvement to the ACT's coronavirus-ravaged budget bottom line, Chief Minister Andrew Barr has revealed.
Mr Barr will hand down the long-delayed 2020-21 ACT budget on Tuesday, which is expected to show the territory's financial position has recovered quicker and stronger than expected from the pandemic-induced economic crisis.
On the back of the clearest sign yet that the ACT economy is bouncing back, Mr Barr has strongly indicated that the government's various coronavirus support measures - including tax waivers and deferrals - will end at the conclusion of 2021.
He also confirmed the next phase of the ACT government's tax reform will start as scheduled, meaning Canberra households and businesses can expect rates hikes after July 1.
Tuesday's budget will provide the first major update of the ACT's financial position since Mr Barr's economic statement in August, which forecast the territory would fall $909 million into deficit this financial year.
Debt was projected to grow to $4.7 billion in 2020-21, before swelling to $7.7 billion in 2023-34
In an interview with The Canberra Times ahead of his ninth budget as Treasurer, Mr Barr said Tuesday's fiscal update would show improvements on both fronts.
Mr Barr said the ACT budget was now projected to be about $603 million in deficit this financial year, a $300 million improvement on the August prediction.
The budget would be about $500 million better off over the forward estimates compared to the figures forecast six months ago, he said.
Net debt has been revised down slightly to $4.6 billion this year, and $7.65 billion in 2023-24.
Mr Barr said the ACT's "good pandemic management" had restored confidence in the local economy, which had seen revenue return to the government's coffers.
He said a surge in activity in Canberra's property market, which he attributed to the government's stamp duty concessions and Commonwealth HomeBuilder scheme, and extra GST revenue had helped to boost the ACT's budget bottom line.
While some sectors have bounced back to, and are even exceeding, pre-pandemic levels, industries such as tourism and the international student market remained in a "depressed state", Mr Barr said.
He again advocated for targeted federal assistance for industries still subject to restrictions after JobKeeper ends next month, while arguing it would be "untenable" for JobSeeker to return to the old Newstart rate on April 1.
However, he noted the ACT had the nation's lowest number of recipients in both programs, meaning it was less exposed to the looming changes than other jurisdictions.
About 5000 Canberra businesses are receiving the JobKeeper wage subsidy, according to figures provided by the chief minister's office, compared to about 12,500 between April and September.
The improved economic conditions will prompt debate over whether the ACT government should rein in spending and start paying off the debt accrued through 2020.
The Canberra Times in December revealed Treasury officials had told Mr Barr after the ACT election that he needed to devise a detailed plan to balance the books in the wake of the economic crisis.
On Monday, Mr Barr said neither this budget nor the next one in August was the time to consider extra measures to increase government revenue or pay off borrowings.
He said increased economic activity would itself help to improve the budget bottom line, as it had done in the second half of 2020-21.
Mr Barr said the government's budget position would also improve once it stopped temporary support measures for households and businesses, including tax waivers and deferrals. The programs, many of which have been extended until June 30, will probably end this year, he said.
"I think there will be a point at which .... there wouldn't be a need for COVID support measures in 2022, once the vaccination program is complete," he said.
"I haven't made that decision yet but that is the presumption that I will go into the August budget with."
Mr Barr also confirmed that the next stage of the government's 20-year tax reform program would start next financial year, which will see households and businesses hit with rate rises of 3.75 per cent annually.
Most property owners were given a reprieve in 2020-21, although more than 60,000 households did pay extra.
More information on rates settings for 2021-22 will be announced before the end of June.