ACT budget 2022-23 squirrels GST revenue boost away despite Canberra's growing pains

The growing population comes with some benefits: the bottom line of the ACT budget is in a stronger position than the government forecast last year thanks to a bigger share of the goods and service tax revenue.

Chief Minister Andrew Barr said this increased revenue - some $1 billion over three years - will cover more of the costs from services already delivered. The increased population did not appear overnight after the census figures were released. Those people have been here and the government can keep tabs on what services are under pressure and need support.

But given the deficit is smaller than forecast, the government could have spent more to boost the services needed for a growing Canberra. The pitch would have been simple, arguing expanding the services of the territory's perpetually strained health system was more expedient than immediately reducing the deficit, which remains a theoretical number for most people anyway.

Instead, the 2022-23 ACT budget comes in the middle of the Legislative Assembly's term. The COVID-19 pandemic, which continues to have a significant impact on the community, has settled into a pattern of waves and troughs - now almost a normal feature of the government's economic planning.

There's a feeling this year's budget might be squirrelling away some cash to better tackle the age-old government problem: getting re-elected. Halfway between elections, the ACT government has taken a path of mostly painless budget repair, avoiding slashing cuts and leaving just hypothetical opportunity costs. It's a good springboard from which to launch promises in two years' time.

Economic growth in the territory points upwards over the forward estimates. Mr Barr has emerged from last year's COVID-induced downturn with a positive story to tell, but ensuring the quality of services Canberrans expect keeps up with a bigger population will be an emerging challenge.

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While Canberrans may avoid the harshest sting of rising inflation, the generally well-off city will not be spared entirely from growing cost-of-living pressures. A strong government budget and stretched services would be cold comfort to residents finding it harder and harder to make ends meet.

Mr Barr was clear at his pre-budget press conference on Tuesday that government budgets were not like household budgets, despite the frequent comparison. The deficit was sustainable, he said, because the territory's economy would continue to grow.

"Government never retires, government's income and wealth grows every year, particularly when there's strong economic growth. I think even in the deepest of recessions government revenues have been able to return very, very quickly following an economic rebound," he said.

When Mr Barr released last year's budget, he was hoping for a fast economic recovery. He got one. Now he will need to manage a city that has stepped, blinking, back into the light. There is perhaps a stronger demand for government to deliver - it was able to to get the community through COVID, so why can't it continue?

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