Budget Speech

2024-25 ACT Budget

Introduction

Madam Speaker

The 2024-25 Territory Budget focuses on the community priorities of health, housing and cost of living.

It is a practical plan to deliver:

The ACT has experienced significant economic and social challenges caused by the COVID-19 pandemic, climate change and geopolitical tensions.

These external factors have dictated the economic environment, and we have responded to protect public health, protect local businesses and jobs and support the most vulnerable members of our community.

Our economic strategy is working. The ACT economy has performed well. Business growth has been the strongest in the nation. The Government has continued to support jobs, provide employment security, implement taxation reforms to reduce inefficient taxes and provide high-quality and targeted services.

Economic overview and strategy

While our economy is on track for a thirty fourth year of consecutive growth, the rate of growth will be slower this year and we know parts of our community are experiencing cost of living pressures. Some local businesses are reporting reduced turnover.

This is why in this Budget we are delivering $143 million of concessions to provide targeted cost of living support.

It is also why we will be encouraging Canberrans who can, to spend their July 1 tax cuts locally, in Canberra businesses.

Economic Growth and Employment

Over the decade to 2022-23, the ACT has led the country in economic growth, with real Gross State Product growing at 3.5 per cent per annum, compared to 2.4 per cent nationally.

The most recent data shows the ACT experienced very strong GSP growth of 4.3 per cent in 2022-23 - the highest among all states and territories.

In fact, since the June quarter of 2015, the ACT is the only jurisdiction where annual State Final Demand has shown continuous growth on a per capita basis.

And since 2013 the number of businesses operating in the ACT has grown from 25,000 to 35,000 – an increase of 40 per cent.

The ACT is where you want to be when the nation’s economy is struggling and when it is booming.

Nonetheless, like every jurisdiction, we face economic challenges, particularly in the short-term, with a softening of the national economic outlook as business and consumer confidence is impacted by persistent inflation and the Reserve Bank of Australia’s monetary policy settings.

However, our strong labour market, public demand, wages growth and population growth will continue to underpin our economic activity, albeit at a slower pace for the next few years.

While household consumption growth is lower, households remain supported by employment growth that exceeds population growth as well as an increase in real incomes.

We are optimistic that future household consumption increases will be spent in Canberra businesses.

Wage Price and Consumer Price Index

Inflation in Canberra grew by 3.3 per cent through the year to the March quarter 2024, well below its peak of 7.1 per cent in December 2022.

Nonetheless, the rising costs of living continue to impact many households, families and individuals in our community which is why we have delivered a carefully calibrated package of cost-of-living support.

Real wage growth is expected to continue over the coming years as inflation moderates. This will further support household consumption.

This is the benefit of investing to support our labour market, driving up real wages, and supporting improved living standards.

Fiscal strategy

Despite rising costs of service delivery and infrastructure, as well as downgrades to some revenue estimates, the Territory’s financial position remains strong.

Our plan allows us to chart a sensible and sustainable pathway for a balanced Budget, one that will not expose Canberrans to the hardships of cuts to public investment and consumption for purely ideological reasons.

The Budget’s Headline Net Operating Balance position is forecast to improve each year and will return to balance over the forward estimates, while the operating cash balance also continues to improve.

Our fiscal strategy is calm and measured.

We will continue to seek balance in public finances as the community and economy recovers from the impacts of COVID-19 and persistent inflation.

We will seek to stabilise, then reduce debt, over the medium term through a combination of operating cash surpluses, land sales, and fully funding our superannuation liability.

We will do this while investing in the services and infrastructure that improves wellbeing and supports economic growth and jobs.

As we continue to deliver our nation-leading tax reform program, the ACT will also remain a relatively low-taxing jurisdiction with our own- source tax revenue as a share of Gross State Product the equal third lowest across all Australian states and territories – at 5.1 per cent.

Investing in the wellbeing of Canberrans

Madam Speaker, the Wellbeing Framework, now in its fifth year, assists Government in making investment decisions that contribute most strongly to the quality of life for people across Canberra.

More Health Services

The Government knows that effective health services have a significant impact on wellbeing outcomes across the Territory.

That is why we are continuing to invest in our public health system to ensure Canberrans can access the right care, at the right place and at the right time.

The Budget builds on the substantial investment in our health system, with $920 million of new healthcare initiatives funded over the next four years.

This includes the next phase of minimum nurse and midwife-to-patient ratios, the expansion of paediatric care, ongoing support for digital health services, permanently funding the second PACER team, doubling the size of the Acute Medical Unit and increasing emergency and elective surgeries.

The Government is increasing resources across our health system so that our doctors, nurses, midwives and allied health care workers can deliver the high quality free public health care Canberrans need.

Soon we will open the Critical Services Building at Canberra Hospital which will support the delivery of our growing health services.

The Government is also delivering community-based health centres across the Territory, to alleviate the pressures on hospital emergency departments and provide local communities more direct access to health services.

The first of these new Health Centres opened in Molonglo in 2022. Construction is expected to begin in the second half of this year on a new Health Centre in Tuggeranong, and in this Budget we are investing to construct two new health centres, one in North Gungahlin and one in the Inner South and to undertake design work for the West Belconnen centre.

These health centres, along with our nurse led Walk-In centres and hospitals ensure all Canberrans can access free public healthcare close to home.

Increasing Housing Access, Choice and Affordability

Madam Speaker, housing affordability is a national issue requiring a collaborative policy response.

The Government will continue to work with the Commonwealth to deliver our commitments under the National Housing Accord.

Considerable investment has already been made to increase housing supply, access to housing and housing choice in Canberra – however there is more to be done and increased housing construction and improved affordability continue to be a priority.

The Budget includes more than $285 million in funding for housing initiatives, including;

These investments, combined with our program of land release and the right regulatory settings through our planning system, will help ensure we have the right mix of housing options to suit a range of household incomes and meet the housing needs of our growing city.

The Government is continuing to support new housing by making more land available including for community and affordable housing.

This Budget also continues to support the Growing and Renewing Public Housing program, with an ambitious but achievable total capital works program for Housing ACT, of over half a billion dollars over the next four years.

We have maintained housing supply growth at a higher rate than population growth over the past decade and at a significantly faster rate than the national average.

This increase in supply, combined with initiatives included in this Budget supporting stamp duty relief for owner occupiers – particularly first home buyers – will continue to target rental and housing affordability.

Targeted cost of living relief

Canberra has lower levels of income inequality than other Australian cities. However, there are Canberrans who do not share equally in our high living standards.

Low income and low-wealth households are particularly vulnerable to higher prices for non-discretionary items such as food, fuel and energy.

The Budget includes a range of measures to assist with cost of living challenges.

To help with energy costs, we have complemented the $300 per household provided by the Commonwealth in two key ways – firstly by returning $61.3 million in surplus revenue from the Large-scale Feed-in Tariff scheme to households.

This has reduced overall growth in regulated electricity prices by around 5 percentage points – meaning Canberrans will see another real reduction in their energy bills this financial year.

And secondly by providing an Electricity, Gas and Water Rebate of $800 to almost 44,000 eligible recipients in 2024-25.

Households can save even more on their energy bills by engaging with their retailer on different plans or choose to compare between retailers. The Government has undertaken regulatory reforms that makes this process easier for consumers.

Additionally, the Government is providing a one-off payment of $250 to apprentices and trainees, who tend to earn just above the threshold to qualify for Commonwealth financial assistance but are still lower income earners relative to others in Canberra, and often with a lower level of assets or savings.

In this Budget we are also providing funding support for emergency material, financial aid programs and food relief services and increasing assistance through the Taxi Subsidy Scheme.

The Government has also increased the Future of Education Equity Fund in 2024 for families with financial hardship to ensure all young Canberrans can equally access and engage in their education.

Stronger Foundations - lifelong learning

The Budget also includes increased investment in education, laying a strong foundation for lifelong opportunities and ensuring all children are supported to thrive in their early years by breaking down barriers to accessing early childhood education and care.

We know that investing in education provides life-long benefits. That is why the Budget includes new initiatives worth over $100 million to support education and skills.

The Government is delivering on the key commitment under the Set up for Success strategy - the provision of free, quality early childhood education and care.

The second phase of this commitment is being delivered in 2024 through the provision of 300 hours per year of free, quality early childhood education for all three-year-olds.

In this Budget we are also providing funding to deliver consistent teaching practices, common assessments, resources and support for parents and professional learning for teachers, school leaders and learning assistants across all ACT public schools.

We are also reducing workflow pressures for teachers and addressing recommendations from the Teacher Shortage Taskforce.

Community Safety and Inclusion

Madam Speaker, throughout the ACT and Australia, incidents of domestic violence continue to increase. National Cabinet met in May to discuss the national crisis of gender-based violence.

It is crucial that frontline services are well-equipped to respond. The Budget includes new initiatives worth $12 million to address domestic, family and sexual violence including coercive control.

This new funding, in addition to existing commitments, brings the total Government investment in addressing domestic, family, and sexual violence to $95 million over the next four years.

Madam Speaker, in the coming financial year the Government will spend more than $650 million on community support and social inclusion, including funding to implement the First Action Plan of the ACT Disability Strategy to drive positive change and capacity building across the ACT.

The Government remains committed to growing the Aboriginal and Torres Strait Islander Community Controlled Sector to deliver services and programs, guided by the community’s knowledge, history, lived experience and connection to country.

Climate action

Madam Speaker, the Government is investing in an all-electric, zero emissions future for Canberra with the release of a new Integrated Energy Plan as part of this Budget, containing a range of Government commitments to support Canberrans through the transition to cheaper, cleaner energy.

Swapping from gas to electric appliances and investing in energy efficiency will deliver significant bill savings to Canberrans.

For the 18,700 households that have already taken up loans under the Sustainable Household Scheme, to date they have already saved an estimated $43 million on their energy bills.

The Government is committed to ensuring all Canberrans benefit from the transition to a low emissions future. That is why in this Budget we have committed to electrify all feasible community and public housing by 2030.

Infrastructure

Madam Speaker, the Government is delivering an $8 billion Infrastructure Investment Program over the five years to 2028-29.

Our capital investment priorities continue to be health, education, public transport, public housing, climate action and urban renewal.

We have progressively updated the Infrastructure Plan through the term - adopting a staged approach to planning and delivering our infrastructure needs to achieve optimal timing and funding of investment. This is particularly important in the context of national industry and market capacity constraints and price volatility.

We are planning for a significant uplift in health care infrastructure including a new northside hospital to replace aged facilities at the North Canberra Hospital site in Bruce and the further rollout of health centres across Canberra.

More than $2 billion of our infrastructure investment program will be invested in public transport, roads and active travel.

Integrated transport and land use planning ensures easy access to services and facilities for our community as well as economic opportunities.

By prioritising investment in public transport and active travel, and expanding the use of zero-emissions vehicles, transport policy will contribute materially to meeting the Government’s objective of achieving zero net greenhouse emissions by 2045.

Investing in entertainment, the arts and sports continues to be an important element of the Government’s wellbeing strategy.

Targeted new investments in this Budget will continue to improve Canberra’s liveability and status as a destination of choice for work, study and recreation.

This includes partnering with the Commonwealth Government and other stakeholders to progress development of landmark city-shaping projects such as Light Rail Stage 2A, a new Canberra Convention and Entertainment Centre Precinct, the redevelopment of EPIC and the Bruce Sports, Health and Education Precinct.

Conclusion

The Government remains optimistic about the economic outlook ahead and the fiscal policy settings that we have put in place in this Budget:

This Budget reflect our priorities and aspirations for our growing community – to be the best place in the country to live, to work, to invest, to study and to call home.

Madam Speaker, before I conclude, as this is the last of five Budgets in this term of the Assembly, I would like to take the opportunity to thank the hardworking staff in ACT Treasury. They are consummate professionals and on behalf of the Government I thank them for their advice, their support, and their diligence in all that they do.

I commend the Budget and the Appropriation Bills to the Assembly.