When he delivered his maiden budget speech in June 2012, the country was still reeling from the aftershocks of the GFC. Canberra was already beginning to experience the effects of the public service cuts initiated by the Rudd-Gillard-Rudd government and accelerated by Tony Abbott.

"We are facing contracting Commonwealth expenditure, a moderating economy, softening revenues and increasing cost pressures," he said at the time.

"As a consequence there has been a deterioration in the budget bottom line. However we will not respond in a knee-jerk manner by slash and burn budgeting."

That first budget, which also launched the ACT's ambitious taxation reform plan, prioritised the need to support "the economy, employment and frontline services for the community" over balancing the books. That would have to be left until 2015/16 according to the forward estimates.

The message a year later was much the same, with Mr Barr noting "the government recognises that in the current constrained economic climate balancing the budget (in 2015/2016) will take concerted action".

While that goal wasn't actually achieved until 2018/2019, the important thing is Mr Barr and his government did eventually get there.

The purpose of this brief history lesson is to remind Canberrans that while the fiscal outlook outlined in this year's budget is unpalatable to an unprecedented degree, the ACT government has faced similar challenges in the past, albeit on a smaller scale, and overcome them.

One piece of good news is that the ACT government is now receiving its fair share of GST revenue following the publication of accurate population figures by the ABS in the wake of the last census. This is expected to deliver a windfall of up to $1 billion, which Mr Barr has said will be used to pay down the deficit.

"We have already committed that level of expenditure that reflected service demand and population increase; we just weren't getting the [GST] revenue that reflected that [previously]," Mr Barr said on Tuesday.

Another bright spot is that the ACT's economic outlook is strong, with anticipated growth of three per cent a year. Partly as a result of this, deficits are predicted to decline from this year's $580 million, itself well short of the original forecast of $951.5 million, to $221 million over the forward estimates. That compares very favourably with the $318.3 million predicted deficit in Mr Barr's first budget a decade ago.

And, for the purposes of comparison, the latest ACT economic growth rate forecast of three per cent is double that predicted in the 2015/2016 budget Mr Barr handed down seven years ago.

So, while these are tough times - and Tuesday's 50 basis point interest rate rise will flow through to the cost of government borrowing as well as community lending - the latest budget appears to be a measured and appropriate response to them.

The ACT government's ongoing commitment to major infrastructure projects such as the Canberra Hospital, the CIT Woden campus and the expanded theatre centre, to maintaining high levels of funding for education, health and city services and to retiring debt when the opportunity presents itself is far more sensible than slashing spending, at the expense of services and growth.

Mr Barr has, once again, resiled from the temptation to indulge in "slash and burn" budgeting. The ACT will reap the rewards of that decision.