Budget Strategy and Overview
The Government’s 1999-2000 budget strategy has been developed in light of the current economic and financial climate to:
- eliminate the operating loss by the 2004-05 Budget;
- provide for the unfunded superannuation liability by the 2001-02 Budget;
- use proceeds of any major asset sales to fund the shortfall in accruing superannuation or to retire debt; and
- maintain the Territory’s AAA credit rating.
The first two of the above points are also reflected in the Government’s Key Result Areas.
Table 1.1.1
Summary of the General Government Sector - 1999-2000 Budget and Forward Estimates
| 1998-99 | 1998-99 | 1999-2000 | 2000-01 | 2001-02 | 2002-03 | ||
|---|---|---|---|---|---|---|---|
| Budget | Est. Outcome | Budget | Var | Estimate | Estimate | Estimate | |
| $m | $m | $m | % | $m | $m | $m | |
| $1,568 | Revenue | 1,582 | 1,723 | 9 | 1,776 | 1,852 | 1,882 |
| $1,707 | Expenses | 1,732 | 1,787 | 3 | 1,774 | 1,801 | 1,815 |
| -139 | Operating Result | -150 | -64 | 57 | 2 | 51 | 67 |
(a) Tables may not add due to rounding
(b) The 1998-99 estimated outcome includes abnormal items of $20m
Highlights of the 1999-2000 Budget
- The 1999-2000 Budget projects that the general government sector will be in surplus from 2000-01. This is four years earlier than the targeted budget strategy. The Total Territory will also be in surplus from 2000-01.
- The forward estimates demonstrate a significant movement towards a sustainable operating surplus.
- A sustainable operating surplus is required to ensure sufficient cash is available for capital investment without the need to borrow or sell major assets. A sustainable operating surplus would be roughly equal to the cost of the capital works program.
- The forecast General Government Sector operating loss for 1998-99 is $150m, compared with the original budgeted operating loss of $139m. The deterioration is mainly due to the write down or write off of assets, which were not originally budgeted and therefore result in an abnormal expense.
- The 1999-2000 budgeted operating loss of $64m is an improvement of $26m against the estimated operating loss of $90m for the 1999-2000 year, published in the 1998-99 Budget.
- The operating loss improves across the Budget period by a further $131m, with a surplus being achieved from 2000-01 across the forward estimates.
- An injection of $300m is to be provided to the Superannuation and Insurance Provision Unit in 1999-2000 to partially offset outstanding superannuation liabilities. This is made possible from a capital distribution from ACTEW. The $300m injection replaces the planned investment of $200m over four years, announced in the 1998-99 budget.
- The AAA credit rating, the highest possible, was confirmed by Standard and Poors credit rating agency on 23 April 1999.
- There are no new general government borrowings projected during the 1999-2000 financial year. It is anticipated that there will be a need to undertake new borrowings through the Central Financing Unit (CFU) on behalf of the ACT Electricity and Water Corporation (ACTEW) for approximately $300m.